Supply Chain Management and Time Series Methods

The current demand forecasting method is based on qualitative techniques more than quantitative ones. If the forecast is not accurate, the company would carry both inventory and stock out costs. It might lose customers due to shortage of supply or carry additional holding costs due to excess production. If the actual demand doesn’t match the forecast ones, and the forecast was too high, this will result in high inventories, obsolescence, asset disposals, and increased carrying costs. When a forecast is too low, the customer resorts to a competitive product or retailer. A supplier could lose both sales and shelf space at that retail location forever if their predictions continue to be inaccurate. The tolerance level of the average consumer

It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)

Once you have figured out what type of supplier you need, it is time to source the right supplier within that category.

Costco was established in 1983 by Jim Sinegal and Jeff Brotman. Together they established Costco as the leading wholesale company in the United States and have moved its operations into the international market. Just like many successful companies they established a strategy that has allowed them to obtain an advantage over their competitors and gained a market share which includes but does not limit them to a more affluent clientele. In this review, Costco’s strategy, mission, objectives and external environment will be reviewed. A financial analysis of the companies financial statements will be presented and compared to its biggest competitor, Sam’s Club to illustrate that Costco has

A buying organization has to determine its expectations from a supplier and then make the appropriate decisions to select the most suitable. According to Beil (2009), selecting the right supplier involves the buying organization identifying, evaluating as well as

To choose the best suppliers for our various components, all existing suppliers are evaluated. Cost per item, accounts payable (A/P) terms, actual delivery time, average days late on delivery, and total ordered quantity are calculated and compared. Because on time delivery is vital to our daily operation, delivery time and average days late are considered the most important criteria. Based on this evaluation, suppliers recommended for each component are listed below.

In general, supplier selection is a multi-criteria decision problem that contains tangible and intangible factors. This paper identifies

The issue of short versus long-term contracts is also an important consideration during supplier selection. Using the following

The concept of demand forecasting more accurately measures and predicts the changes and opportunities in the supply chain.

When you have a complex supply chain, supplier evaluation and reduction is a great step that can be taken towards having a lean supply chain. Supplier evaluation and reduction is a continuous process within organizations and forms part of the pre-qualification step within the supply chain management process, although in many organizations it includes the participation and input of other departments and stakeholders. Most organizations experienced in collecting supplier evaluation information prefer doing so using five-step processes for determining which supplier to approve or reject. Their processes often take the form of either a questionnaire or interview, sometimes even a site visit with each supplier, and includes appraisals of various aspects of the supplier 's business including capacity, financials, quality assurance, organizational structure and processes and performance. Based on the information obtained via the evaluation, a supplier is scored and either approved or not approved as one from whom to procure materials or services. In many organizations, there is an approved supplier list (ASL) to which a qualified supplier is then added. If rejected the supplier is generally not made available to the assessing company 's procurement team. Once approved, a supplier may be reevaluated on a periodic, often annual, basis. The ongoing process is defined as supplier performance management.

Then managers can use regression to forecast prices. With judgment and updating information, supply chain managers can make the final forecasts.

Having recognized and established numerous suppliers, manufactures are now able to substitute suppliers and provide consumer with several options. Therefore, supplier power is considered to be relatively lower in the automobile industry.

In addition, the significant on international supplier selection also consider in terms of quality management, cost, and on time delivery. These things are the most important in supplier selection.

Finally, procurement strategies and techniques for managing suppliers, selection of product category placement, product life cycle, trend analysis and enhancement of process efficiency will be explored. The combination of these elements will be used to form a procurement plan that will be recommended for adoption by the board.

Suppliers play a vital role in an organization's microenvironment. The relationship between suppliers and organizations are built on a solid foundation of value. (Diagram 1.3) The growth and the vision of the organization depend heavily on the values that the suppliers can offer. The extent to which