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Strategic Sourcing

In: Business and Management

Submitted By adyess2006
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What specific action should the company take in the area of inventory control? Support your proposal with an analysis of its strengths and weaknesses (15 points). The company should implement a plan. As stated in the case, there was no real plan or policy in action that supported this role within the company. This has to be done if the company wants to continue to grow. They are a growing company and have a number of different products. This is strength because they offer their customers a variety of products to choose from. Another strength would be that they have commonality amongst their products. It stated in the case that they have several products that share materials. This is a good thing because strategic sourcing strategies can be implemented here. One of their main weaknesses was the lack of inventory control. This affected their raw materials all the way to their finished goods. They lost orders, had to make smaller quantity orders to meet production needs, and have growing transportation cost. They need to make use of an ERP system like SAP in order to track all of their inventory and finished goods problems they were experiencing. Having a system like this in place will let them know, when they need to re order product, the different salvage dates and cost, and other inventory management problems that they may need to solve.

What is your reaction to the argument of those who oppose tighter controls? (5 points) Tighter controls need to be kept to stop the company from losing money. When there is money being thrown away because too much or not enough material is being ordered, or because transportation cost have increased then something needs to be done. It will cost money to implement a working supply chain system but the company will be better off in the long run because efficiency will be increased.

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