Derrick should take to solve his problem. Derrick should firstly identify the factors that this organic process would entail. He has to ensure that whatever adjustments in the supply chain strategy he will implement should drive and support the business strategy as a well designed supply chain can provide competitive advantage. In order to continue leveraging the competition and maintain the same path of gaining costs reductions and compete on a cost productivity advantage he can opt to increase sales volumes or utilize an efficient supply chain network.
Efficient apply chain network can increase efficiency and improve productivity as such reduce overall cost per unit. He should research potential suppliers assess the cost of possible outsourcing also identify key tech oenology to assist with this new direction. Establishing and building new relationships through the supply chain will be paramount since the Strategy has now changed.
Investigating the competition, possible merchants and associated costs of other suppliers should be an avenue to pursue as even though the focus was initially on costs the priorities have now shifted as organic and CEO friendly rodents are more expensive than regular products. Getting all aspects of the chain aligned and workable to fit the modified supply chain design should take precedence. Should Derrick ask for the required changes from the current suppliers? If they do not comply, should he solicit new suppliers?
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How might he do this? It is definitely k for Derrick to ask for the required changes from the current supplier. He has maintained and fostered a relationship with them over the years and this can also be viewed as part of building further relationships in the supply chain. If they are not familiar with organic CEO roundly products they could be afforded the first opportunity to continue business provided they are willing to facilitate the request. This can mean new future potential business for them as well.
If they do not comply then he reserves the right to research and seek out other possible vendors. This new direction of organic products that the company has undertaken comes with great responsibility as the company's bottom line is dependent on it. The company with the help of Derrick has in the past successfully competed on cost and has used competitive bidding to select suppliers and award yearlong contracts. He should be able to procure the same with the new specifications and supply chain design. Should Derrick go through a competitive bid in the future?
If so, should he do it for all purchased products or just some products? Based on the high level of competitive environment experienced in today's marketplace garnering a sustainable competitive advantage is definitely a priority for companies. Even though organic products are more expensive he should still try to minimize costs. Utilizing a competitive bid process in the future could be recommended for Derrick as this strategy has worked effectively in the past for the company. This can be used for obtaining the best products at cheaper costs.
Continuing on the same path should assist him to maintain and align all factors such as costing, innovation, distribution, and product quality and customer service as part of the supply chain strategy. What are the differences when looking for suppliers to meet cost standards versus quality standards? The quality of a product is usually lacking if costs is the only thing a company is focused on. Most companies who compete on costs are only focused at offering the lowest price possible. This strategy requires going to the cheapest suppliers rather than focusing on gig quality components.
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