Question
Case Study: The supplier selection process is a critical activity within the operations of a company. Once the outsourcing decision is taken, a process aimed
Case Study:The supplier selection process is a critical activity within the operations of a company. Once the outsourcing decision is taken, a process aimed at analyzing and choosing the appropriate suppliers begins.
Suppose that you are a Procurement Analyst in a large company. You have been asked to create a proposal to the Chief Procurement Officer identifying the best supplier to outsource, for a 3-year period, a complex part of your company's value chain. Your company operates in a mature market where the qualifying and winning factors are quality and time to customer respectively.
Based on the information included in the table, address the following questions:
- What supplier would you select?
- What is your rationale for your election?
- What supplier would you select if your company's factors changed to price and quality? Would your election change?
Supplier | Price | Quality | Delivery | Others |
A | 90 | 90 | 95 | Overseas supplier (transport lead time 3 weeks) |
B | 105 | 100 | 100 | Supplier facing financial issues |
C | 85 | 85 | 95 | Proximity supplier (transport lead time 3 hours) |
*Figures are expressed in % as follows:
- Price: price quoted by supplier vs. outsourcing company target price
- Quality: parts accepted vs. parts delivered
- Delivery: parts delivered on time vs. parts delivered
Provide proposal, as the Procurement Analyst, that outlines the issues of the case, states your choice of supplier and provides a rationale for your choice.
References must be mentioned, please.
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