You are the Supply Manager for Wonderful Widgets. The
company produces one product, widgets. The company can procure its widget parts
from various suppliers or use its current equipment, facility, layout, and
material to produce the component in-house.
As the Supply Manager you see the operational costs increase
each month. You need to reduce these costs and streamline processes before the
end of the quarter. Corporate will see these costs on the quarterly reports. You
need to be proactive.
As the Supply Manager you are responsible for making all
decisions pertaining to procurement. Wonderful Widgets can produce the parts
needed to assemble widgets or they can outsource the parts to a variety of
suppliers. Remember, Wonderful Widgets
can produce the components internally or buy them from their suppliers. Based
on historical data knowledge of customers, you know:
Value is not attached to the component
Clockspeed is slow
No competitive advantage exists
Procurement Strategies outsourcing
Wonderful Widgets does not need to worry about competitive advantage,
clockspeed, or value places on this component. As such, outsourcing is a viable
option at this time.
As the supply manager, you decide to outsource or procure
the component from one or multiple suppliers. Now, you must think about supply
risk and profit impact. You decide the following:
Supply risk is low
Profit impact is low
Based on what you know the component is considered to be a
functional part/product vs an innovative product. Likewise, this fits with low
supply risk and low profit impact. You also realize that using multiple suppliers
is the best option.
As the Supply manager you decide to outsource or procure the
component from multiple suppliers. Based on what you know at this time minimizing
total landing cost as the best choice.
Minimalizing total landing costs
This would be the most appropriate procurement strategy. The
component is a functional product and the supply risk and profit impact are
low. Therefore, this approach will assist Wonderful Widgets in reducing their overall
operating costs. They have the capability to produce the component internally
but this adds to their operational costs due to fixed and variable costs
associated with producing this particular component. Wonderful Widgets does not
need to worry about competitive advantage, clockspeed, or value placed on this
Start your paper by giving a brief summary
of the scenario. Then identify the problem at hand. Write a couple of
paragraphs that critically evaluate the three possible solutions (describe
advantages and disadvantages of each). Doing this will help you make the best
recommendation. Choose a solution by making a clear and specific recommendation.
Describe how the company can implement your recommendation.
**TIP: Use headings in your paper for the area I have underlined.
Do not forget to read and review the rubric. Write in third
person. Use APA format. You must use at least three sources with
in-text citations for each.
At the end, discuss the questions that are
Answer the following questions:
What did you find challenging in completing the scenario?
How do strategic alliances impact procurement outsourcing strategies ?
Provide your response by uploading a Word document in APA style.
700 words with 3 sources.
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