Carrying these primary elements into consideration, it is most obviously profitable for the organization to use the outsourcing strategy since the [DVD] production on the two major companies situated outside the country are both competent in handling high quality production at a reasonable price. Transportation cost payment system may also be negotiated with the chosen supplier to lower the cost of expenses in terms of shipment and transport of the product deliveries.
2. This case provided the data necessary to perform a cursory supplier financial analysis. In reality, cross-functional sourcing teams must often obtain this data during their assessment of potential suppliers. Discuss possible sources of supplier financial information. What may impact a purchaser's ability to obtain supplier financial data
Through having a thorough conversation with the top executive personnel of the business entity being assessed, a carefully presented financial report of the company could be achieved. Through gaining such information, the company could then measure the stability of the company that they are assessing in the business.
The willingness of the suppliers to get the deal done with the purchases of the products in regular terms shall indeed move them to give certain financial results from past annual records of the organization. By doing this, they are setting a connection of loyalty and trust between them and the purchaser. It is through this process that both parties could actually measure the kind of relationship that they could be sharing if they are to pursue with the contract signing to close the deal of supplier-purchaser connection between the two firms.
3. A sourcing decision of the magnitude highlighted in this case requires a serious commitment of resources and time. Do all sourcing decisions require similar commitments of time and effort If not, describe the types of sourcing decisions that justify this effort. Describe the types of sourcing decisions that do not justify or require the level of effort and analysis required in this case.
The kind of decision-making system that needs to be dealt with in this case is much likely concerned in choosing the best supplier from the four others who have already been closely assessed by the administration at an earlier time. Because of the number of choices and the level of concentration that needs to be considered in this phase of decision-making for the company, the process of coming up with the final decision would certainly require more time and effort of analysis.
Unlike other systems of approach in sourcing, this case may appear to be quite difficult to handle since the choices range from both insource and outsource suppliers. In other business cases, the choices are rather much easier to decide upon since they either involve insource suppliers or outsource suppliers. Having to decide upon this matter would be much easier to control since the choices are more closely related compared to that of the case handled by PSC.
4. How important is the issue of supplier capacity in this case How did your group evaluate supplier capacity What level of attention or importance should supplier capacity receive during the sourcing