The pacific systems corporation
Develop a process that provides a logical order evaluating the market data and reach a recommendation regarding how to proceed with the supplier selection process.
The pacific systems corporation is among the medium-sized companies that are specialized in technological services. The company is located in the northern part of San Francisco. In the recent past, the company used to manufacture subsystems but developed a product line of assembled personal computers recently (Wieme et al. 2020). The personal computers were assembled at the PSC facilities, but many product components and subassemblies tend to be outsourced. This case seeks to identify the process of selecting a good supplier to outsource the DVD drive. PSC is facilitating the various ways of starting the production of 500000 disk drives in its first year.
After the purchasing team has paid a visit to the suppliers, they narrowed down to about four choices. That is E-Drive systems, Elecom, Park technologies and SureTech. Each of these companies possesses its own advantages and disadvantages. For instance, the Elecom Company located in japan tends to be the largest supplier. The company prides itself on having the lowest quoted price even though the contract is in Yen, making the company’s large size become a turnoff for the PSC team. SureTech, on the other hand, is a small company situated in Colorado (Phillips et al., 2020). The company specializes in disk drives but has managed to be in the industry for only a period of one year. This makes it difficult to have a deeper understanding of what their future holds. The E-Drive system is located a few miles from the PSC. This location is quite good as it allows room for flexible delivery, but they have a problem relating to quality in the recent past. Additionally, park technologies are located in Korea and pride itself for having the most in depth quality testing. The only set back of this company is that PSC tend to be the first larger north American customer. A good analyses needs to be conducted to decide which among the four companies might succeed in the PSC contract.
Perform supplier evaluation and selection analysis using worksheets/template provided. What is your recommendation?
PSC is in dire need of the of the unit price range of between 125-150 dollars. The date currently dates in January of 2003 and the inventory must get available to start the entire production in June as the computers will be available for sale by the first of august when most of the children are preparing to go to school. The appendix has managed to outline the various needs of the PSC (Lin et al. 2020). The responsiveness and quality of supplies is quite critical as PSC is widely known for their selection of quality and every item that fails to be part of them is mostly tends to cost the company $300 and lose of the customer faith. The selected company as well needs to have the enough capacity to provide adequate support to the PSC and be good enough to matters of financial standing.
I therefore recommend that PSC should incorporate the E-Drive subsystems as the main supplier of the DVD disk drives. The company also has its production lines up and running until June which tends to be the major requirement of PSC. Additionally, despite E-Drive being the second largest producer of the DVD drives globally, they still possess that attitude that might lead to a great supplier connection compared to other suppliers. Even though their financials failed to be the best of the companies (Dung et al.2020). There have not been cases of red flags, and they tend to show no signs of future occurrences, they are willing to work with an array of companies such as PSC especially on issues of product development in the future generation. This also tends to give room for PSC to be a long time customers and still manage to keep up with the ever changing technologies in the industry.
What extra cost are associated with Asian suppliers that will have to be incurred by PSC? Are these costs justified in this case?
PSC’s extra cost is associated with the risk taken by the company to purchase E-Drive with quality issues of having the clicking sound when the drive engages the disk. Cost is incurred when the quality manager decided to fix the problem before the PSC Company place other orders. An engineer will be called upon to cross-check on the E-Drive engineers as they work on such issues (Suko, 2020). Furthermore, other costs might be incurred on updating weekly reports concerning fixing the problem and other drives used by PSC as prototypes and test in their respective facilities before engaging themselves in a long-term contract. This exercise will help ensure that the problem is well fixed. Noteworthy, the supplier responsiveness, close proximity to the PSC facility and promise for the future growth gives room for PSC to make E-Drive the most attractive of the above mentioned candidates.
What other obstacles or challenges would PSC face if it selects a supplier from abroad?
One of PSC’s biggest obstacles if they select a supplier from abroad is obtaining the financial data. If a supplier happens to be a public company, financial data is always available on various resources such as Hoover’s database. However, it becomes more substantially difficult if the company happens to be a private one. This is because the company might privately seek some financial data on the suppliers. However, in this case, the supplier usually fails to supply this information, especially when it fails to comply with the company policy, or if the information only makes the company look more attractive (Khillari, 2020). To mitigate this challenge, various purchases might ask other companies that source with the supplying companies, especially when they get well connected in the industry. Furthermore, there exist business to business agencies that have financial reports. In such a case, various resources tend to be used and cross-referenced to get the accurate analysis possible of the cost.
If PSC selects an Asian supplier, what efforts can be exerted to make their global sourcing strategy successful?
The global sourcing strategy can be successful through sourcing decisions. This process requires an ample time and resources because other sourcing decisions may fail. In this case, items are of utmost importance and the suppliers sourcing them need to get analyzed the same way when a partnership is being formed. The relationship and communication that expiate between the sourcing company and the purchaser also needs to be strong. Furthermore, the quality inspection for all parts of the supply is key to the quality product because many items may be sourced by an array of reputable suppliers or even with the blanket purchase order.
Conclusively, having PSC source their DVD drives from the E-Drive systems was conducted due to the supplier visits, supplier responsiveness, financial information, and opportunities for future growth. Based on my opinion, the e-drive system happens to be the best overall choice when considering all these requirements. In order for one to make these decisions process shorter in future, PSC may consider an attempt to get small sample of items that are made during the ramp up time for them to prototype while the supplier is ramping up for mass production of the items. This tend to open doors for those suppliers that were considered but had a longer lead times than E-Drive systems.
References
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Suko, S. K. (2020). U.S. Patent No. 10,637,444. Washington, DC: U.S. Patent and Trademark Office.
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