Case Study_GVC_International Procurement_STUDENTv2 (2)

Supply Chain Management - Group Case Study#2 Case of Late Deliveries Due Week 9 Worth 10% of your final grade more background information to prepare for the press conference. The team discussed the background for each point and brought up the following facts. Bring Back the Jobs to the U.S. Chez advised that he was speaking to someone at a private dinner function and someone else overheard him say, “The factories in China produce our phones really quickly and on a much larger scale. It just makes sense for us, as not only do we source most of our assembly jobs from China, but most of the parts needed to make the V10 are from China. The jobs won’t be coming back to America any time soon.” This statement was later reported to the media. The decision-making process used a few years ago to outsource the manufacturing and assembling of Tibo’s products to suppliers in China was justified. Tibo saves over USD 20 billion a year in labour costs by going to China. The average daily manufacturing wage in the U.S. is USD 39, whereas in China it is USD 3. Terry purchases high quality products for 10 percent of what he would have to pay for these products in the U.S. There is little to no issue with finding labour in China, as many people are looking for work. Moreover, there is a good and large supply of the raw materials needed to make the V10 already in China. Practically, all the factories that make different components for the phones are located close to each other. Supply Chain Practices The allegations in the media that Tibo has been putting suppliers through rigorous selection methods may be attributed to suppliers needing to be specific and detailed in their price quotes to Tibo. All suppliers must state how the manufacturer came up with the quote. For example, for part suppliers, each manufacturer must specify how much every part costs to assemble, how many workers are needed to make the parts and how much the estimated labour costs are. Tibo’s finance and procurement team then calculates how much Tibo will pay the supplier for each part. Also, Terry only institutes long-term contracts with parts suppliers to reduce costs. He has many suppliers lined up and can switch between them as needed. Supplier Code of Conduct The press reports of labour issues at Wolftan are damaging, but to date the sales of the V10 have not significantly declined. If the allegations are true, Wolftan is going against the established supplier code of conduct, which was developed to ensure compliance with acceptable worker conditions at supplier facilities. Each supplier must agree to meet the standards established in the Supplier Code of Conduct & Responsibility Standards . Audits of suppliers are done continually. Chez has been thinking of ways to manage the complaints, but has not yet developed an acceptable course of action. There has been a lot of tension in the company, as other members of the executive team want to see the factory conditions improved for the workers, but do not want to jeopardize the relationship Tibo has with its suppliers. The Decision After all the background information was discussed, Chez and Terry decided to continue operations with Wolftan for the next few months. To diversify Tibo’s supply chain risk, Terry planned to start new contracts with two other manufacturers to make and assemble several © FITT Page 3 of 8

Supply Chain Management - Group Case Study#2 Case of Late Deliveries Due Week 9 Worth 10% of your final grade GRADING RUBRIC Rubric Score GBC Grade Description 1 0.0 to 59% Does not meet the criterion. Develops and organizes ideas that are not necessarily connected. Inconsistently applies and communicates knowledge of subject matter. Some ideas seem illogical and/or unrelated. <50% Fails to apply and communicate understanding of subject matter. 2 60% to 69% Demonstrates minimum skills in meeting the criterion. Presents ideas in general terms, applies subject matter appropriately, comprehends subject matter. 3 70% to 79% Demonstrates moderate skills in meeting criteria. Evidence of some synthesis of course content presented to demonstrate understanding of topic and relevance to the questions. Shows elements of original and creative thinking, has a strong grasp of subject matter. 4 80% to 100% Demonstrates above average skills in meeting criterion. Ideas are clearly developed, organized logically, and connected to course content and questions. >90% demonstrates mastery of content, uses effective reasoning in presenting ideas, superior grasp of content. Criteria Score Weight of Section i Identifies Sources of Ideas and evidence used in developing arguments or conclusions. Provides: - A Title slide which includes the name of the course, the names of group members, date, and the name of the Professor. - Evidence that course content has been linked to the answers provided. Ideas are supported with balance of evidence. - At least four references formatted in APA style.   4   3    2     1 1% Intro Clarifies the issue to be discussed, provides: - Additional information as to why the issue was selected - Demonstrates strategic thinking by zoning in on the main issue 4   3    2     1 1% Section One Supplier Analysis & Assumptions/Bias. Provides: - Correctly identifies Kraljic buyer/supplier relationship quadrant and provides a rationale with at least 2 reasons - Outlines benefits and costs of adding new suppliers - Outlines advantages and disadvantages of reducing the number of suppliers - Analysis of how Terry/Chez can avoid or mitigate 2 – 3 cognitive bias in decision-making. 4   3    2     1 4% Section Two Ethical Procurement. Provides: - Implications of taking a more active stance on social responsibility - Outlines bias/assumptions underpinning decision   4   3    2     1 2% ii Conclusion and Coherence. Includes: - Start off with a statement that “sells” your recommendation - 4 to 7 Prioritized recommendations in bullet form (start with a verb, like a checklist for the executive team to review and act - Explain the rationale behind your recommendations   4   3    2     1 2% © FITT Page 6 of 8