| LOG317: Procurement Strategy and Policy |
Question 1
Consider your organization (or one that you are familiar with) and how its the procurement process is carried out.
(a) Analyse the profile of this organisation, including the types of goods and services which it requires as part of its business and the role of the procurement function within the organisation.
Relate your answer to portfolio generic matrix.
(b) Discuss how the procurement portfolio generic matrix (segmentation of purchase) can be applied to the organisation and the possible outcome. Assemble relevant examples from the organisation to support your answer. You are required to provide the matrix diagram and briefly describe its application.
Question 2
Touchpoint is a start-up focusing on medical devices meant for the optometry sector. They are currently developing a mobile ‘Refraction Unit’ (a refraction instrument is used in vision testing to determine the eye-health if power correction is required). There are three partners in Touchpoint, two brothers, James and John and a mutual friend, Jay. Both James and Jay are ex-classmates having met each other when they were pursuing a mobile software application-developer certification. John works as a supply chain manager in a vision care retail-chain.
The refraction unit basically consists of electronic circuitry with optical instruments housed in a specially designed plastic casing. James and Jay jointly develop the firmware. The team is discussing how they should progress on its manufacturing – to outsource or to subcontract?
(a) Examine the difference between outsourcing and subcontracting.
(b) Appraise the appropriate approach in the above scenario and make your
recommendation.
(c) Construct the key considerations for Touchpoint.
Question 3
Auto-ONE specializes in the manufacturing of shock absorbers meant for use in the aircraft suspension system. Shock absorbers are designed to absorb and dissipate the kinetic energy generated during landing, reducing the impact on the airframe. There are four major components in the composition of an absorber. Their characteristics are listed in Table 1.
The company is looking to manage its cost better and have turned to you for advice. The management feels that product-D would be a low hanging fruit to capture savings.
(a) Examine which framework can be recommended to Auto-ONE that can apply to priorities cost reduction plan for each of the four (4) components.
(b) Develop an analysis on Product-D’s demand-supply situation. Propose two (2) tactical approaches that Auto-ONE’s procurement team can consider.
Question 4
A company is a single source on a component that is produced by a European manufacturer with facilities in its home country. The component is now readily available in the market, unlike five years ago when the product was first introduced. The relationship with the supplier has been good and the company has always enjoyed competitive pricing and unwavering support from the supplier even during turbulent times where natural calamities cause supply disruption. The supplier has proven to be a reliable partner.
Senior management is concerned that the company’s supply chain is highly exposed due to reliance on only one supplier. The procurement department has been tasked to work on a risk management strategy.
(a) Discuss two (2) risk arising from this single source scenario.
(b) Recommend two (2) action plans as part of your risk management proposal.
You should support your answer with an analysis of the strength, weaknesses, and opportunities.
