UH SCM 3301 - Reasons For Global Sourcing (3 pages)

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SCM 3301 1st Edition Outline of Previous Lecture Chapter 3 Part 1 Lecture 3 Reasons for Global Sourcing Quality Cost Delivery Performance Potential Challenges Logistics Communication Political Stability Note 50 supply needs sourced globally When you go from a domestic source to an international source you save 20 on the price Benefits of Establishing Supplier Relationships Flexibility in delivery Improved quality Transparency in communication of information Expedited material flow Strategic advantage Best practices sharing Note Stronger supplier partnerships are the key to competitive advantage Keys to Successful Partnerships Building Trust Shared Vision and Objectives Personal Relationships Mutual Benefits and Needs Win Win Commitment and Top Management Support Change Management Information Sharing formal and informal Commitment to Continuous Improvement Performance Metrics You can not manage what you can not measure Supplier Development Programs Designed to Improve a Supplier 1 SCM 3301 1st Edition Local supplier development Moga India Nestle Creating Shared Value Supplier Evaluation Measures Safety Internal External Sustainability Green Ethics Quality Consistency Conformance Service Delivery Reliability Speed Capacity Cost Total Cost of Ownership Business Metrics Measures weighted depending on importance to the organization Weighted Criteria Evaluation System Supplier Overall Rating 0 100 Category Score 0 100 Weights 05 25 o Unacceptable less than 50 Supplier not used o Conditional Between 50 and 70 Supplier performance needed timeframe o Certified Between 70 and 90 Routine supplier audits performed o Preferred Greater than 90 Less frequent supplier audits required Current Lecture Chapter 3 Part 2 Lecture 7 Supplier Certification Process The process for evaluating key suppliers with a goal of eliminating incoming inspections o Percent incoming lot rejections o Percent incoming product defective o Percent on time o Quality performance measures o Supplier process