Supplier Selection at Casturn Systems

330 Words2 Pages
Supplier Selection at Casturn Systems (A) What are the benefits and disadvantages of the re-sourcing process in Figure 1? Benefits: * Provides an opportunity for Casturn GMC to find out multiple suppliers’ price point. Casturn CMC can then discuss and gain understanding of the cost structure with suppliers, and further negotiate a lower price for Casturn. * Through e-RFQ, Casturn CMC is able to obtain price quote from a number of identified suppliers efficiently. Disadvantage: * Technical evaluation after price negotiation causes an unfair price competition during auction between high quality suppliers and low quality suppliers. Suppliers with low quality may have lower cost structure comparing to high quality suppliers. Without setting the quality standard before the auction, it is likely that the auction winner may not be able to meet Casturn’s technical evaluation. * The cross-function time at step 5 have veto power. Even though this practice reduces the chance of making a bad re-sourcing decision, it wastes lots of time and energy from CMC and engineer team, and may discourage nominated supplier. Are there any improvements that should be made to the current re-sourcing practices within Global Supply Management? * Clear quality standard and parts’ print should be communicated with potential suppliers to eliminated misunderstanding. * Once a list of potential suppliers has determined, Casturn should begin to evaluate their technical capabilities and financial capabilities. Casturn could ask suppliers to send Casturn samples. Casturn design and plant quality engineers then exam samples and qualify suppliers before invite suppliers to enter auction. * Cross-function team should be brought on board to the re-sourcing process from step 1 so that any potential issue could be brought up earlier in the process. This will eliminate

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