week 3 Discussion Questions

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Feb 20, 2024

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Uploaded by PresidentMongoose3454

After reading the Introduction, Overview, and Instructor Notes, as well as the assigned chapters in the Monczka, et. al. textbook, how does a buying organization develop a World Class supply base in the context of globalization and world-wide sourcing? A buying organization can develop a World-Class Supply base through constant optimization and rationalization. Chapter 9 mentioned that the first critical steps towards effective management and developing the supply base (Monczka) are supply base rationalization and optimization. By rationalizing their supply base, they must determine how many and which suppliers are the best out of a group and which to select by considering suppliers on a global scale. The suitable suppliers are classified, focusing on top and higher-performing suppliers. Once achieved, they can select the suppliers they want to partner with and develop strong business relationships. By performing this, they can ensure continued growth and improvements in their supply base, optimize it, and get the most out of it. Optimization usually forces organizations to search for better suppliers on a worldwide scale. Having capable suppliers that align with the organization's objective will result in an effective procurement process where quality, cost, and delivery, to name a few, will be immaculate. Optimizing the supply base will also reduce the inherent risk of world sourcing. As part of optimizing the supply base, the buyer determines the relationship they will form with the supplier(s), whether it be a transactional, strategic alliance, or a partnership. If built on trust, a buyer-supplier relationship will increase market share, reduce supply chain costs, and, more importantly, promote continuous growth within the supply base. Discuss whether such a buying organization optimizes its supplier base in the same manner in the public and private sectors. If this optimization is not achieved in like manner in these two sectors, how do they differ? Optimizing the supplier base is slightly different for the public and private sectors. In the public sector, companies' best value is more focused on the cheapest price, whereas private sector companies think of the best deal at the best price. The public sector focuses more on cost savings and cost benefits. Private sectors focus more on revenue. Public sector companies face a challenge that private sectors do not, which is general knowledge of what they pay for goods and services. This is due to having to abide by federal and state laws about being transparent with their procurement. Private sectors have fewer restrictions

than public companies; they have more lead way when searching for suppliers. In the private sector, the procurement process is flexible, open to innovation, and is an integral part of the organization. The public sector has no procurement department; procurement is treated more like a functional service. The buying organization has the option to strategically evaluate and select suppliers that are aligned with the company's objectives. In the private sector, profit and people are driving factors; therefore, private sector organizations will optimize their supply base to capacity to save costs. Briefly explain one topic or issue from this week's material that may benefit you personally or professionally. This week's topic on supply-based management will benefit me and in future positions. In my current role, supplier selection and supplier relations need to be minimal, and in most cases, supplier selection is based on the lowest price technically acceptable. I must learn the rationalization and the optimization steps towards effective management and developing the supply base, which must be a continuous process. I can apply this to my job in contracting as things are constantly changing, especially now that I am retiring and thinking of doing other types of acquisitions.

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