UH SCM 3301 - Supplies Selection Criteria (4 pages)

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Supplies Selection Criteria

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Supplies Selection Criteria


Lecture number:
Lecture Note
University of Houston
Scm 3301 - Service and Manufacturing Operations

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SCM 3301 1st Edition Outline of Last Lecture CHAPTER 2 PART 2 Lecture 2 Supplier Selection CriteriaSSQDC Safety Internal External Sustainability Green Ethics Quality Consistency Conformance Service Delivery Reliability Speed Capacity Cost Total Cost of Ownership Other Considerations o Product and Process Technologies o Willingness to Share Technologies and Information o Communication Capability Total Cost of Ownership Per Piece Price Unit Price Quantity Requirements or Discounts Payment Terms Cash Location Transportation Costs Location Ordering Costs Cost of Quality Maintenance Costs Delivery Performance How Many Suppliers to UseSupplier Rationalization Single Source a risky proposition Current trends favor fewer sources tension between supply disruption risk and leveraged spend Reasons Favoring a Single Supplier o To establish a Good relationship o Less quality variability o Lower cost o Transportation economies o Proprietary product or process o Volume too small to split Reasons Favoring Multiple Suppliers o Need capacity 1 SCM 3301 1st Edition o o o o Spread risk of supply interruption redundancy Create competition Information Dealing with special kinds of business Sourcing Strategy Demand Aggregation Supplier Rationalization Leveraged Spend Demand Aggregation o Combining the material requirements across the enterprise into a single purchase Supplier Rationalization o Assuring that approved suppliers possess the optimal characteristics Accomplishing both of these gives a company maximum leveraged spend PurchasingCentralized vs Decentralized AdvantagesCentralization o Concentrated volume o Leveraging purchase volume o Avoid duplication o Specialization o Lower transportation costs 2 SCM 3301 1st Edition o No competition within units AdvantagesDecentralization o Closer knowledge of requirements o Local sourcing o Less bureaucracy A center led sourcing organization A hybrid purchasing organization Lecture 6 Current Lecture September 11 2014 Reasons for Global

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