1.
Advantages: Makes it easier to pick out or identify the weakest areas to improve on for the supplier. Heartland may also need to take into account the weakest link. In theory, once the weakest link in a chain breaks, the entire chain is broken.
Disadvantages: The overall performance of the supplier may have a negative perception, due to their lowest ranking category; when in reality, the overall performance of the supplier may be much higher than their competitors.
Overall: Basing the supplier’s overall evaluation on its lowest performance on one dimension is not a good idea. It doesn’t reflect what or which areas the home company holds important. 2. There should be weights established for each rating dimension; however, they should …show more content…
It may also negatively impact the customer’s perception of our company.
Cost Management (.2) By improving and focusing on cost management, we would gain a competitive advantage in our industry.
Wavelength (.2) This area is indicative of our relationship status with our suppliers and the better our relationship is with them, the more willing they are to accommodate our needs.
Delivery (.15) It is important for our company to have our supplies on time and in the correct quantities because the production of our products depend on the bearings.
Technical Support (.15) While bearings are not a type of product that requires much follow-up and assistance from a call center, their responsiveness to the changes in process improvements result in long-term efficiency gains for all parties …show more content…
For example, suppliers can offer more reliable delivery and more professional technical support, as well as respond more frequently and effectively to their buyer’s need. It is justified to pay a price premium for New England Works because of their high levels of quality and their willingness to improve their products to suit our needs.
A reason to not give a price premium to a higher-rated supplier would be that there is not enough separation in quality between them and the next highest-rated. Also, just because the company is the highest rated among our supplier competitors does not mean they exceed our own standards, and truly earn that price premium. We recommend going for the price premium, because we will be giving them the extra earnings to help our business in the long-run through process improvement and new product ideas.
5. We would recommend a premium of 10% for New England Works. They have had substantial enhancement in efficiency gains to our areas of product and process improvement, simplification, and assembly costs. We would like to support the increase of these improvements by giving a 10% premium. We’re basing this decision off their ratings and performance as well. We do not have information on how many units we purchase from each; however, the cost of the price premium paid to New England Works could be offset by the gains from their process and design
Advantages: Makes it easier to pick out or identify the weakest areas to improve on for the supplier. Heartland may also need to take into account the weakest link. In theory, once the weakest link in a chain breaks, the entire chain is broken.
Disadvantages: The overall performance of the supplier may have a negative perception, due to their lowest ranking category; when in reality, the overall performance of the supplier may be much higher than their competitors.
Overall: Basing the supplier’s overall evaluation on its lowest performance on one dimension is not a good idea. It doesn’t reflect what or which areas the home company holds important. 2. There should be weights established for each rating dimension; however, they should …show more content…
It may also negatively impact the customer’s perception of our company.
Cost Management (.2) By improving and focusing on cost management, we would gain a competitive advantage in our industry.
Wavelength (.2) This area is indicative of our relationship status with our suppliers and the better our relationship is with them, the more willing they are to accommodate our needs.
Delivery (.15) It is important for our company to have our supplies on time and in the correct quantities because the production of our products depend on the bearings.
Technical Support (.15) While bearings are not a type of product that requires much follow-up and assistance from a call center, their responsiveness to the changes in process improvements result in long-term efficiency gains for all parties …show more content…
For example, suppliers can offer more reliable delivery and more professional technical support, as well as respond more frequently and effectively to their buyer’s need. It is justified to pay a price premium for New England Works because of their high levels of quality and their willingness to improve their products to suit our needs.
A reason to not give a price premium to a higher-rated supplier would be that there is not enough separation in quality between them and the next highest-rated. Also, just because the company is the highest rated among our supplier competitors does not mean they exceed our own standards, and truly earn that price premium. We recommend going for the price premium, because we will be giving them the extra earnings to help our business in the long-run through process improvement and new product ideas.
5. We would recommend a premium of 10% for New England Works. They have had substantial enhancement in efficiency gains to our areas of product and process improvement, simplification, and assembly costs. We would like to support the increase of these improvements by giving a 10% premium. We’re basing this decision off their ratings and performance as well. We do not have information on how many units we purchase from each; however, the cost of the price premium paid to New England Works could be offset by the gains from their process and design