Scenario Description:
You are the Supply Manager for Wonderful Widgets. Thecompany produces one product, widgets. The company can procure its widget partsfrom various suppliers or use its current equipment, facility, layout, andmaterial to produce the component in-house.
The Problem:
As the Supply Manager you see the operational costs increaseeach month. You need to reduce these costs and streamline processes before theend of the quarter. Corporate will see these costs on the quarterly reports. Youneed to be proactive.
Additional information:
As the Supply Manager you are responsible for making alldecisions pertaining to procurement. Wonderful Widgets can produce the partsneeded to assemble widgets or they can outsource the parts to a variety ofsuppliers. Remember, Wonderful Widgetscan produce the components internally or buy them from their suppliers. Basedon historical data knowledge of customers, you know:
1. Value is not attached to the component
2. Clockspeed is slow
3. No competitive advantage exists
Decision Point:
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 viableoption at this time.
As the supply manager, you decide to outsource or procurethe component from one or multiple suppliers. Now, you must think about supplyrisk and profit impact. You decide the following:
1. Supply risk is low
2. Profit impact is low
Based on what you know the component is considered to be afunctional part/product vs an innovative product. Likewise, this fits with lowsupply risk and low profit impact. You also realize that using multiple suppliersis the best option.
As the Supply manager you decide to outsource or procure thecomponent from multiple suppliers. Based on what you know at this time minimizingtotal landing cost as the best choice.
Minimalizing total landing costs
This would be the most appropriate procurement strategy. Thecomponent is a functional product and the supply risk and profit impact arelow. Therefore, this approach will assist Wonderful Widgets in reducing their overalloperating costs. They have the capability to produce the component internallybut this adds to their operational costs due to fixed and variable costsassociated with producing this particular component. Wonderful Widgets does notneed to worry about competitive advantage, clockspeed, or value placed on thiscomponent.
Start your paper by giving a brief summaryof the scenario. Then identify the problem at hand. Write a couple ofparagraphs that critically evaluate the three possible solutions (describeadvantages and disadvantages of each). Doing this will help you make the bestrecommendation. 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 thirdperson. Use APA format. You must use at least three sources within-text citations for each.
At the end, discuss the questions that arepresented below.
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.
