Running Head: BUSINESS AND ECONOMICS

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PURCHASING CASE STUDY 1

Communication forms the most important part as far the supply chain is concerned. It is through well enhanced communication that buyers and sellers can interact well and their separate needs. The most important lesson I derived from the case study is the importance of harmonizing ideas among the working groups. If the flow of ideas between the concerned parties is not proper, it may lead to total failure.

In order for the working procedure to be functional, a supply chain is composed of different elements which are reliant on each other. Each of these parameters needs to be reviewed. The customer initiates the supply chain by making the required order. This is then processed by the supplier and finally the consumer receives the package. Hence, there are several elements entailed in such a transaction. To begin with, inbound logistics is crucial during the supply chain. This is closely followed by the outbound logistics in addition to customer care and operations division. None of these processes can be ignored if the supply chain is to succeed.

There were some missing links as can be noted form the case study. For instance, the quantities of goods shipped were much more than the actual level agreed upon. This affected the inbound logistics. As a result, there was a lot of mess especially when these goods were to go through the outbound logistics. The operations department suffered a lot. Besides, customers who could not get their packages delivered on time got angry hence unsatisfied. It is imperative to consider the available time against the volume of goods to be handled if supply chain is to record any success.

2)

Delayed shipment is one of the main problem which led to the entire mess of the supply chain logistics. Therefore, the supplier carried the blame having agreed so. Besides, the very supplier did not issue the accurate information detailing the quantity of goods to be supplied. Although this appeared to be the key issue at hand, later deliberations revealed that the actual problem was lack of understanding between the supplier and the customer when the initial quotation was being made. These factors hampered the operations in the shipment and delivery of the goods. Although the supplier attempted to communicate with the customer care department regarding challenges in production, no positive feedback was received thereby complicating the entire process.

3)

Opting for a different supplier would be a better alternative for Avion, Inc. However, there were several pending deals with the initial supplier. Such an action would just aggravate the situation. Hence, it would only be necessary to clear the current backlog of supplies before delegating the work to a different supplier. This will also assist in restoring customer confidence. In fact, the process of selecting another supplier would require more than just enough time and it would be better off if Avion, Inc. clear all the current deals first.

4)

The best way to resolve the issue is by getting to the bottom of the problem. It is important for the company to seek the root cause of the problem, who was actually responsible or failed to do their part and the reason why that happen. In fact, blame game cannot help much at this point. Every detail should be keenly filtered in a bid to establish the truth and possible solutions for the same. The reverse method can achieve much in the process of resolving this problem. Although the magnitude of the problem might appear to be small, no single element can be ignored because it may as well as graduate to level difficult to handle.

5)

As a customer, it is imperative to play our parts well and in a manner that will not jeopardize the relationship with the supplier or producer. The bargain end with the supplier should be clear to avoid any possible misunderstanding which may arise due to late deliveries or wrong quantities of deliveries. Additionally, good customer will equally seek an understanding with the supplier whenever some eventualities occur. For instance, delays which may result from transport logistics should not cause a breaking point in the relationship between the supplier and customer. Therefore, it is possible to maintain a cordial relationship between the customer and supplier if the former can resort to understanding of the situation at hand.

6)

When the supply chain is keenly monitored or scrutinized at every important point, it will account to what is referred to as performance measurement. This does not only assist in assessing the progress of the chain but also giving a thorough evaluation of how efficient the process is running. Information obtained from performance can be used to make necessary adjustments whenever weaknesses are noted. Performance measurement will also ensure that extremely weak points within the supply chain are overhauled or completely modifies. Hence, it is a very important form of monitoring and evaluation which will always ensure sustained growth in a company.

7)

The supply chain logistics will definitely experience change from time to time bearing in mind that the market if often very dynamic and which will quite regularly call for changes. Nevertheless, any change effected will depend on a wide array of factors which must also be put into consideration. Every individual change needs to undergo some form of evaluation to see into it that it will not cause any constraint but rather will enhance the supply process. Factors such as the nature and volume of goods to be shipped, time of delivery as well as the location may also bring in several changes on board although by the end of the day, all the aforementioned factors still belong to the supply chain command. When changes in these aspects are carried out with due diligence, the performance index of the supply chain can record significant growth and success.

8)

The duration of time taken when an order is placed by a customer and finally receiving the goods is referred to as the lead time. Reducing the lead time by Avion will imply that the latter will be able to secure more time to continue with production owing to the fact more deliveries to customers will be made within the shortest time possible. More orders will be procured by the company and on the other hand, the level of customer satisfaction will definitely be high due to prompt deliveries. Consequently, Avion will be in a position o make more profit.

9)

It is necessary to consider both the single source contract and the multiple source contracts. In the first case, goods are obtained from one supplier regardless of the circumstances at hand. On the other hand, multiple source contract permits the customer to obtain goods from a variety of suppliers. The main advantage of the multiple source contracts is that it is always possible to make adjustments in the supply needs depending on the market forces such as demand. However, if the single source contract is adopted, it will be imperative for both the customer and the supplier to create some working goal to be adhered to just in case the two parties break from the norm. in order to improve the relationship between the supplier and the customer, it is upon the customer to set some specific targets which will also match the ability and capacity of the supplier so that minimal hitch is encountered in course of the two carrying out transactions. The guidelines to be followed by the supplier and the customer should be clearly understood by the two and by so doing; the supply chain will experience positive growth.

10)

This case has presented a myriad of issues which definitely require to be addressed expeditiously in order to avoid similar challenges arising in future. The supply chain process can be made better if the following proposals are put into action.

Avion should seek to avoid extremely large quantities as far as deliveries are concerned. In addition, they should stick to their time and program of deliveries as agreed upon by Foster technologies. Moreover, the lead time should be borne in mind by Avion so that prompt deliveries are put in place. Quantity of good to be shipped in a given period of time should be well known so that Foster Technologies can fit into the delivery and production schedule. Should there be any changes on the same to be effected, it should be counterchecked and approved beforehand by the manager in charge of production. The increased orders from Avion require a specialist who can offer proper and thorough management. In fact, Avion Inc had at one time pointed out on the size of Foster Technologies and was concerned whether it would be able to effectively handle its production capacity. One of the best monitoring and evaluation systems which should be initiated is that of measurement technique. This will assist in getting the feedback on the progress of the supply chain and any changes effected should there be need to do so. The challenges portrayed in this case study are sometimes inevitable and can best be resolved if the root causes are established right from the start.

PURCHASING

CASE STUDY 2

What do you do in the first 60 days?

I will begin by restructuring all the departments in each of the plants after a careful evaluation of the current state. To be able to achieve this, meetings will be necessary. All the departmental representatives will have to attend regular meetings to report on the pertinent information regarding operations within their areas of concern. Besides, each of the individual plants should have the willingness to experience change. For instance, there would be no need for plant managers to be directly responsible vice president of operations. This will just be creating a very long chain of command and will also slow down the implementation of some decisions. I will personally meet them on a regular basis to expedite operations in addition to improving the cohesiveness of the tea.

Reforming the way outsourcing is carried out will also form an integral part of this new development. Each plant should be allocated adequate working staff and responsibilities so that an alliance can be initiated easily. Besides, it will be possible for each plant to outsource some of the products which can be cheap and also within reach. This will boost the production capacity and in turn improve the performance of each plant. The logistics should also be customized to fit the capacity of each plant. This will require the use of another party.

What relationships will be critical to your success?

The communication between the plant managers and I will be very important because it is only through them that intrinsic issues can reach me before eventually reaching the top authority. Such issues can be sorted out between the two of us before elevating tem to the next level. These will jumpstart our relationship. Moreover, it is through such coordination and good relationship that the essentials of team work will be established within the organisation. Those who are not working inside the organisation also require to be recognized and good relationship built. For example, there will be need to build a warm relationship with customers and suppliers so that the image of the organization can be impressive. If customers are treated kindly, it will assure the organisation lifeline and market sustain ability will be guaranteed.

In the case of suppliers, a long lasting and warm relationship is important especially if it is a case of single source contract. They form an integral part of the organisation bearing in mind that without them, the supply chain will be incomplete.

PURCHASING

Case Study 3

Many outsourcing decisions involve the concept of a core competency. Define what is meant by this term. Discuss if film technology is truly a core competency of Santek

Prahalad and Gary (1990) described core competence as the best initiative which can be taken by a firm and which also meets the three conditions that is the product should prove to be beneficial to the consumer, competitors should not be in a position to produce easy substitutes which are similar to the product and finally it can dominate most markets which implies that the product has a wide leverage power. Finally, Santek Images has a wide global market for its film products. The single competitor may not adequately make Santek Images to lose the grip of the market. Hence, film technology proves to be the core competency of Santek Images.

Develop a process that would guide firms through the in-sourcing/outsourcing process. Create a process that is robust enough to use across a variety of product/service applications

This begins with the thorough training of the working staff who may either be in-sourced or outsourced. This is important because the background knowledge of the product being handled is crucial. The marketing of the product is also an important undertaking. A professional endowed with marketing background should be sought in this field. Time zones which affects the working hours of employees is also an important consideration to bear in mind. Hence, shifts for the workers should be well planned to take care of eventualities like accidents at work place. Financial availability of the project should be analyzed by an efficient project manager who should give the right feedback. The manager can either be outsourced or in-sourced. Workers who are outsourced should be well oriented or perhaps the company should have the understanding of the workers located in different parts and plan for their working requirements in the most satisfying manner. Projects which prove to be less volatile and more stable should be given priority. This will make it possible for development to be carried out in the most uniform way. Each project should be well monitored to ensure that completion is effected at the right time. Indeed, large groups can be assigned a particular project to expedite completion time.

A major challenge with an in-sourcing/outsourcing analysis involves gathering reliable data. Discuss the various groups that should be involved when conducting an in-sourcing/outsourcing analysis. What information can each of these groups provide?

One of the most viable groups which can be used when conducting outsourcing/in-sourcing analysis is a team which has the professional background in marketing. This team can equally hold meetings with product suppliers who are well versed in the supply field. Such sources of primary information are often deemed to be the best. Nevertheless, the sources of information may include websites, reports from various fields as well as the internet. These sources may sometimes lack consistency or accuracy and may not be fully relied on. Market players who are well experienced in outsourcing or in-sourcing can be used to obtain information pertaining to market research because they have a wide range of relevant data which can be helpful. The data collected in the above processes is then processed, analyzed and used as guidelines for introducing a new product into the market against any possible challenges which may be experienced.

4) Do you think hardware suppliers are candidates for alliances or partnerships with Santek? Why?

I suppose an alliance system would work well between the two parties bearing in mind that Santek Images primarily deal with matters related to media and should the latter continue to outsource, then an alliance system will eventually be established making it easier for it to acquire all its suppliers with ease. In addition, the operations of Santek images are quite different with that of the hardware supplies and so it getting into a partnership may mismatch their working portfolio. It is more rewarding if an alliance could be established between the two parties.

Partnerships and alliances are special forms of supplier-buyer relationships. First, define the concept of partnerships and alliances. Second, identify when a firm should pursue a partnership or alliance with selected suppliers. Use the portfolio segmentation tool to assist with your answer

A Partnership is a form of business arrangement whereby two or more players enter into a contract to start and run a business enterprise. The capital required to start and run the business is contributed by all the partners in the agreement. On the same note, profits and losses are also shared in the same proportion as the amount of capital contributed. Partners in a business may be of different types, some may actively participate in the running of the business while others may be passive in their roles. On the other hand, a business contract which has been facilitated by two or more businesses as a result of seeking ways of improving performance is referred to as an alliance. Some of the reasons why businesses can resort to alliance system are to reduce production costs and also improve customer experience of the goods and services being offered. Risks and opportunities are taken care of by all the members in the alliance. I strongly believe that partnerships can work well in situations where both businesses have a comparative operating capacity in the market and that none of the partners has an advantage position than the other. An alliance is best applied when there is need to outsource products from another company due to cost advantage among other reasons. Each of the organization in the alliance is independent to run its affairs and none can stamp an authority over the other.

Develop a process that firms can use when identifying and developing supply chain alliances

Firstly, planning forms the fundamental starting point when developing the supply chain alliances. It begins by choosing an organisation which has the capacity to form the best alliance. In addition, the goals and objectives need to be clearly crafted out including the requirements of which services to be offered. The evaluation process should also be established to ensure that performance timelines and deadlines are met. Agreements which are mutually beneficial should be anchored so that no alliance member gets a feeling of unfair deal. This will also usher in the need to harness a good working relationship among the alliance members who are supposed to share any pertinent information regarding the agreement. Furthermore, matters regarding tradeoffs should be discussed in details to allow a profitable venture experience between or among the alliance members. Finally, training should be organized to cater for the capacity building and professionalism of the staff across the organizations. This will definitely improve the standard of the employees and commodities and services being delivered.

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