FARE 3310 Lecture 12: Chapter 11 FARE 3310
Document Summary
Integration of activities that procure materials and services, transform them into intermediate goods and final product and deliver them to customers: objective is to build a chain of suppliers that focuses on maximizing value to the ultimate customer. Ethics and sustainability: offloading pollution, firms establish standards for suppliers, doing business in a way that supports conservation and renewal of resources, enforcement: in-house inspectors, third-party auditors, governmental agencies, nongovernmental watchdog organizations. Supply- chain economics: make-or-buy decisions, wholesaler- buys everything, manufacturer rarely buys anything, outsourcing, transferring a firms activities that have traditionally ben internal to external suppliers, part of the continuing trend toward utilizing the efficiency that comes with specialization. Many suppliers: suppliers aggressively compete with one another, peg suppliers against each other and give it to the lowest bidder. Few suppliers: rather than looking for short-term attributes, its better for form long lasting relationships with a few suppliers, can participate in jit systems and provide design innovations and technological expertise.