With the increased globalization, competition and complexity in global supply chains, more companies have realized that supply chain management is critical to the optimal organizations overall operation. It is not longer just the responsibility of the warehouse manager and logistics director. In the past, many organizations didn’t manage their supply chains they left that up to the suppliers. Usually the supply chain planning, marketing, production and inventory management in most organizations operated as separate departments (Stevenson, 2009).
Businesses have recognized the strategic importance and the need for effect and efficient supply chains in operations management (Stevenson, 2009). Assessment As Vice President of Operation my assessment of the battery shortage problem is that SDX are not fulfilling their obligation under the contract. The contract states “the supplier is expected to achieve a 100 percent service rate” (Benton, p. 456). The current supply of batteries is a 20-day supply this is 70 days short the supply when normal should be a 90 day supply. There has not been a shipment in two months this lead me to believe that SDX are not making Butler a priority shipment.
The action taken is to request a meeting with the attorneys to review the contract, because at this point it is a breach in contract. The contract also states that the product prices are fixed for the term of the agreement and a sixty day notice must be given before a price change can occur. SDX did not notify the Butler Operations to alert us of this change. Therefore, this is another breach in contract the SDX company has determine on its own that the contract is null and void. This is not good business practice and creates a problem with Butler’s ability to supply the customer base effectively. Buyer Selection
Purchasing involves buying the raw materials, supplies, and components for the organization. The activities associated with it include selecting and qualifying suppliers, rating supplier performance, negotiating contracts, comparing price, quality and service, sourcing. A key and perhaps the most important process of the purchasing function is the efficient selection of suppliers, because it brings significant savings for the organization. The objective of the supplier selection process is to reduce risk and maximize the total value for the buyer, and it involves considering a series of strategic variables.
Conclusion In conclusion, focusing on selecting only the best suppliers possible will make a major contribution to the competitiveness of the entire organization. This main task requires careful evaluation, selection, and continuous measurement of the suppliers that provide the goods and services that help satisfy the needs of an organization’s final customers. In other words, once a supplier is selected, the focus must shift from supplier evaluation to the continuous measurement of supplier performance. An organization must have the tools to measure, manage, and develop the performance of its supply base.