The supply chain umbrella is a term used by many companies to clarify the difference between purchasing and supply chain management. Purchasing is one of the functional activities that happen under the supply chain umbrella. The terms purchasing and supply chain management are often used interchangeably by people who do not understand the difference between them.

The purchasing process is a series of stages, each of which has its own objectives and participants. Not everyone is involved in every stage in the same way and some people may not participate at all. For example, the purchasing manager may be involved in several stages of the process, but other members of the supply chain management team might only be involved in certain aspects. Ultimately, the purchasing manager will oversee the entire process to ensure that it is being executed properly.

To make sure the company receives the products and services it needs, it is critical to have strategic supply management (SSM) plan in place that outlines roles, responsibilities, and standards for procurement. The SSM plan should outline how materials are procured, who bids on what items, and who reviews bids to determine if they are acceptable or not. Without an established process in place for when purchases are made and who makes them, there can be confusion about who is responsible for what and why. This can lead to time lost while members of the supply chain management team try to figure out what they need to do next or worse yet, mistakes made by someone who isn\'t authorized to make a purchase decision on their own.

Purchasing policies are established by top-level management to outline the framework in which purchasing decisions are made. These decisions include how to conduct purchasing and what information is needed to make a good decision. In some organizations, these policies are used as a tool to communicate with employees and encourage their compliance with the company\'s standards of proper purchasing behavior. Policies should be clear and concise to avoid confusion when they are implemented.

Formatting:

There are no minimum number of references being prescribed for the successful completion of this assignment; however, should outside sources be used in support the content within thebusiness letter, proper in-text citations and correctly formatted references should be prepared consistent with the American Psychological Association (APA) writing standards.

The business letter should not exceed two (2) pages in length, excluding the list of references (if necessary). While the instructor is at liberty to prescribe the format for this assignment, in the absence of such guidance, you will be expected to use good professional judgment in the drafting of this deliverable. Your memorandum should be prepared as a Microsoft Word document.

Directions:

Lisa Jennings thought that at long last, her company, Assurance Technologies, was about to win a major contract from Sealgood Instruments. Sealgood, a maker of precision measuring instruments, was sourcing a large contract for component subassemblies. The contract that Assurance Technologies was bidding was worth at least $2.5 million annually, a significant amount given Assurances annual sales of $30 million. Her team had spent hundreds of hours preparing the quotation and felt they could meet Sealgoods requirements in quality, cost, delivery, part standardization, and simplification. In fact, Lisa had never been more confident about a quote meeting the demanding requirements of a potential customer.

Troy Smyrna, the buyer at Sealgood Instruments responsible for awarding this contract, called Lisa and asked to meet with her at his office to discuss the specifics of the contract. When she arrived, Lisa soon realized that the conversation was not going exactly as she had expected. Troy informed Lisa that Assurance Technologies had indeed prepared a solid quotation for the contract. However, when he visited Assurances facility earlier on a prequalifying visit, he was disturbed to see a significant amount of a competitors product being used by Assurance. Troy explained his uneasiness with releasing part plans and designs to a company that clearly was involved with a competitor. When Lisa asked, what Assurance could do to minimize his uneasiness, Troy replied that he would be more comfortable if Assurance no longer used the competitors equipment and used Sealgoods equipment instead. Lisa responded that this would mean replacing several hundred thousand dollars worth of equipment. Unfazed, Troy simply asked her whether she wanted the business. Lisa responded that she needed some time to think and that she would get back to Troy in a day or so.

After carefully reading Case Study #1 and performing a thorough review of relevant literature, you will be assuming the persona of Ms. Audrey Williams, a Supply Chain Consultant whose services have been retained by Assurance Technologies. Ms. Lisa Jennings, CEO, Assurance Technologies, has reached out to you and appraised you of the situation. Ms. Jennings would like for you to assess the situation and provide her with your professional opinion on how best to proceed with Sealgood.

You are expected to prepare a business letter directed to the attention of Ms. Jennings. In preparation for drafting your response letter, you may want to consider how you would respond to the following questions:

In preparation for drafting your letter, you may want to consider how you would respond to the following questions:

• What is meant by ethical versus unethical behaviors?
• Is the buyer at Sealgood Instruments, Mr. Troy Smyrna, practicing a certain type of unethical behavior? If so, what is the term for this behavior? Why is it considered unethical?
• Is it right for Ms. Jennings to replace several hundred thousand dollars worth of equipment to win Sealgoods contract? What are the financial implications of this decision on her company?
• What should Ms. Jennings do under the above circumstances?

These questions are not intended to be all-inclusive. Rather, they are intended to get you thinking about relevant topics/concepts that supply chain and logistics professionals would be expected to consider prior to advising members of a leadership team. You ARE NOT to list the above questions, and then answer them in your letter to Ms. Jennings.