Lecture 6 Flashcards
What are the possibilities for the integration of different parties within the supply chain?
- A strategic alliance is a relationship ship attempt to build interdependence to increase market share. Each party maintains autonomy.
- A Joint Venture is a union of two or more parties to contribute a specific venture (Sony & Ellicson)
Kraljic`s supply matrix
Kraljic`s supply matrix is used to analyze the purchasing portfolio of the firm.
Financial impact ( the value of the product and service that are bought )
Supply risk ( availability of products, number of suppliers )
Non-critical items (low-profit impact, low supply risk).( office staff)
- Standardized products
- Easy to buy
- Value of the product is low
Bottleneck items (low-profit impact, high supply risk).( raw materials, packaging material, screws, nuts)
- Overordering when the item is available (lack of reliable availability)
- Ensure supply
Leverage items (high-profit impact, low supply risk). (Automation equipment, IT server)
- Substituting products or suppliers
- Exploit purchasing power and minimize costs
Strategic items (high-profit impact, high supply risk). (engines)
- The critical needs of the buyer (difficult to deliver, hard to find, costly, or impact on the profitability )
- Form partnership
- Accurate demand forecasting
- Only one supplier
Stages of purchasing sophistication:
Purchasing management
- Non-critical items
- Fuxtional efficiency
- short term (12 months)
Sourcing management
- Bottleneck items
- Cost management
Material management
- Leverage items( electric motors)
- cost/ price material flow management
- Short-term (12-24 month)
Supply management
- Strategic items
- long-term availability
Local vs global sourcing:
Local:
- Better communication
- Shorter supply chain
Global:
- Low labor cost
- New markets
Single vs. multisourcing:
Single:
- Risky
- Lower purchase price
Multi:
- Flexible
- Alternative sources
- Competetivness
Advantages and disadvantages of outsourcing manufacturing
Advantages:
- Reduction of overhead cost, labor cost
- Flexibility
- Focus on core competence
Disadvantages:
- Loss of expertise
- Dependence on the supplier
- Loss of control over costs
Supplier selection and development of Siemens
Suppliers are identified according to their technical and economic capabilities
- Purchasing (cost, service)
- Quality (performance, system)
- Supply Chain (strategy, system)
- Technology & innovation (fulfillment of requirements)
Development of supplier:
- Supplier controling
- Foster know-how
- continuous analysis of deficits
integration supplier in the value chain - Web-connection
