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Heartland

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Submitted By zlalice
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Paper # 1

Introduction to SCM-honors

Lei Zhang (Alice)

Case # 10: Heartland & Company
1. I think there are at least two advantages of basing a supplier’s overall evaluation on its lowest performance. First of all, it is a simple way to exclude poorly performed suppliers. Since Heartland & Company could have a list of thousands of potential suppliers that need to be evaluated, this method could save a lot of time for managers to pick up a handful of qualified suppliers. Moreover, according to “Liebig’s law of the minimum”, the growth is usually controlled by the scarcest resource, just like the water available in a barrel is determined by the shortest stave. That is, the overall quality of one product can be hit by the worst part of it, and the company is able to avoid this situation by implementing this assessment method.
However, to a large extent, evaluating a supplier’s overall quality on its lowest performance is not comprehensive, and may cause the loss of some great suppliers. For example, based on the poorest performance, Midwest Bearings gets lower overall rate than New England Works because of the relatively lower rate of delivery and technical support. However, Midwest Bearings does really good job at cost management, which is one of the critical elements that Heartland & Company looks for. In that case, the buyer should not eliminate the name of the supplier out of the list immediately.
In my point of view, evaluating one company based on one dimension is not a rational idea. Firstly, different buyers should develop different evaluation systems to opt for their best-fit suppliers. Specifically, the Heartland & Company focuses more on cost reduction that their suppliers are able to conduct. Thus, the company should consider The Midwest Bearings as one of its suppliers, since it is good at cost management, even though it does

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