Section 4.0 Questions for Review and Discussion
Introduction to Supply Chain Management
Instructor: Dwight Boehm
Done by Chad Armitage 1. What are the similarities and differences between evaluating new and existing sources of supply? * Even if a supplier has been used before, its always important to continue to check financial status or complete your due diligence because conditions within a company can change. * If it’s an existing source it’s a lot easier to evaluate performance based on the past contracts/logistics and communication. All the more reason that is important to maintain up to date records of performance of current suppliers. * Additional business with an existing supplier may make better value proposition on the large amount of goods needed (economies of scale).

2. What are the benefits of multiple sourcing versus single sourcing? In what circumstances would you want to source a similar product from several suppliers? * Makes sure that the current supplier knows that competitors can steal business if they don’t continue with the current good value. * Assurance of supply * Eliminates the risk that if demand increases, that the current supplier won’t run out of product, and if they do, you can always obtain additional resources from your ‘back-up’ supplier.
b) You may want to source a similar product from several suppliers when there is volatility in the market and a single source is risky. You may also want to have several sources available when environmental factors have a tendency to interrupt the supply of materials. For example if you have to obtain raw materials from a source that is located on the other side of a mountain range that is susceptible to winter storm delivery shutdowns. 3. Provide a list of criteria you might include in a formal evaluation of a supplier. * Manufacturing capabilities