Date: April 27, 2014 Professor Dahan
Individual Case Study International Business Practicum
Strategic Sourcing at Whirlpool China
Q1. Whirlpool’s Global Sourcing Strategy (GSS) in China had many advantages as well as disadvantages. As the case explains, China had become one of the world’s largest household appliance makers, and relocation of Whirlpool’s Asian HQ to Shanghai helped the company’s products gain acceptance within the market. Furthermore, setting up an international procurement office in Shanghai helped to eliminate various factors that could make global sourcing a difficult process. Whirlpools Shanghai HQ decreased transportation delays and cultural and language differences and supported the company’s own
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Lastly, Step 1 of the SSD should recognize possible switching costs. Once the internal need is identified, Step 2 analyzes the supplier industry and competitors and evaluates performance and strategies of the competition. Next, a sourcing strategy is developed during Step 3 of the SSD. During this phase, Whirlpool analyzes the competitiveness of the industry, gains understanding of existing strategies, formulates strategic options, and analyzes their financial impact. By the end of Step 3, preliminary negotiations could be carried out and suitable suppliers would be selected. Finally, the sourcing strategy developed in the previous stage is put into play in Step 4. The goal of this step is to give necessary feedback to the chosen suppliers, and to settle final negotiations. Should these goals remain unresolved by the end of Step 4, the strategy must be revised.
Q3. Single sourcing is when a company outsources the responsibility of a process or service to one individual or company. With a single sourcing model, the supplier is responsible for all matters related to the outsourcing agreement, and therefore assumes all of the outsourcing risks. Outsourcing all of the risks, however, usually comes with a very high price. This model can be very expensive for a company because suppliers charge a premium for the inconvenience of having to organize all services. Multiple sourcing, on the other hand, is when a company selects more than one supplier to
As early as the 1970s Mattel was manufacturing products in China in order to take advantage of lower costs and enable corporate resources to focus on establishing the brand. By 2007, nearly 65% of Mattel products were produced in China. Mattel used a combination of company-run plants and a network of contract manufacturers. Exhibit C displays a simplified example of Mattel’s supply chain after moving production to China. Global production obviously had major benefits for Mattel, the country factors of China gave it a comparative cost advantage over producing in the U.S., and outsourcing enabled Mattel to remain profitable in an increasingly competitive toy industry. However, outsourcing does have disadvantages, a global supply chain increases the challenges to regulate and enforce quality.
Developing a sourcing strategy is vital with my new “buyer” position at General Mills. I need to consider what General Mills is looking for and what best suits their company.
Single sourcing a contract is a strategy that many firms will use to gain a competitive advantage over their competition. When a contact is single source it forms an alliance of sorts which provides the opportunity for the two firms to manage costs and resources much more
Before anything else, I would like to clarify the difference between the single sourcing and sole sourcing. Single sourcing is refer to purchase from one selected supplier, though there may have other suppliers provide the similar products or service, which is mean the purchaser has a choice to switch suppliers, but for the strategic and some reasons like cost , purchaser decides to use only a specific supplier. Sole sourcing is refers to
“Global sourcing is defined as sourcing the technology, materials and components from sites and supplies located throughout the world. It also means the integration and coordination of requirements across worldwide business units” (Monczka & Trent, 1991, pp2-7).
Answer 1. Strategic sourcing is the major tools and technology in supply chain management and it delivers cost reductions and other offers and advantages. It will make strategic sourcing different from a traditional sourcing. This sounds the most strategic supplier relationship that is based on cost and there is an ability to create new business with technological advances.
Outsourcing is when a company purchases products or services from an outside supplier rather than performing the same work within its own facilities, in order to cut costs. In other words, outsourcing is an organization's contractual relationship with a specialized outside service provider for work traditionally done internally by that organization. The decision to outsource is a major strategic one for most companies because it involves weighing the potential cost saving against the consequences of a loss in control over the product or service. Some common examples of outsourcing include manufacturing of components, computer programming services, tax compliance and other accounting functions, as well as payroll and other
Based on the case study Seagate Technology: Real time response to demand, the article discuss key points in regards to Seagate’s evolution of their supply chain to increase visibility and improve service. Seagate changes the role to a real time demand from a change in planned forecast, of which, allowed low risks. This allowed visibility of Holy Grail, which was also ideal for the supply chain evolution. In parallel, this applied to certain types of regulatory and legal requirements that of which Seagate faced in their global operations and supply chain management. This involves implications of foreign corruption act, in which Seagate ensures compliance with
Our firm has set out to Internationalise its operations by opening to different facilities One in China Assembling and Maintaining Aircraft Engines and the other in Europe fabricating turbine blades for Aircraft
The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.
A common definition of outsourcing is the takes part of their business and give it to another company to complete. The main industries that take
This report talks about the successful strategies adopted by GE that was accountable for its success. It will start by answering the question the importance of studying GE recent globalization strategies and practices, and then, by giving a quick background of the company globalization process evolution. After that, the report will demonstrate a close analysis to 4 main strategies of the company. Finally a conclusion will be given based upon the current challenges and future perspective.
Globalization is “the integration of economies around the world through the movement of goods, services and capital across borders” and is a dynamic process through which companies, corporations and organizations leverage their strengths, magnify their reach, and decrease costs by outsourcing multiple business processes (IMF Staff, 2008). The globalization of Starbucks’ supply chain played a crucial role in attaining organizational success, having a significant impact on its business operations. This report aims to analyze the challenges that globalization presents in a constantly evolving market, and evaluate the solutions that Starbucks has implemented to manage these challenges.
Global companies source their raw materials and outsource manufacturing of their products to many countries to take advantage of lower costs or high quality production, and/or lower costs of
Although Dell is an extremely successful company, there are areas of improvement and enhancement that should be considered. After a thorough analysis of Dell¡¯s IT tools, business model, IT infrastructure and competitive advantage, we have developed seven key suggestions. By implementing these recommendations, Dell can keep its high ranking in the competitive computer industry by increasing customer satisfaction, competitive advantage and superior value chain, without changing its principal operations to achieve these goals.