Alternatives:
1) Implement and develop a category management team that will segment the main areas of the organizational spend on direct materials, and utilize this information in the supplier selection process (moving away from purchasing by vendor, but purchasing by category).
Advantages:
• Allows for innovative thinking, making organizations identify problematic areas, additionally, areas that are costing greater then they should.
• Reduces prices paid through the use of value levers such as demanding reductions in price and discounts. Also, using levers such as aligning prices across purchase points and regional categories can maximise competition in the marketplace.
• Category managers can leverage expertise and insight into a whole …show more content…
This market place has become extremely saturated, creating confusion, which in turn, can lead to additional costs.
3) Continuing on their current path, implementing the processes mentioned in the case:
Advantages:
• Delphi has a strong model for supplier development, understanding what, when, and where to make improvements and process changes.
• With their budget of 50 processes engineers with each person costing $100,000 per year in salaries and benefits, totalling $5,000,000, they would have ample funding to support the implementation of their lean supplier development plan by simply higher less engineers and focusing more funding on the overall process.
• Implementing all nine key elements of the Delphi’s lean supply transformation, that has already been developed, would save large amounts of capital and time as the process has already been designed.
• Less backlash from employees as Delphi has had a strong focus on lean supplier development for many years, simplifying the training process
Disadvantage:
• Divisional and regional presidents would need to understand the implications of lean supplier
1) Implement and develop a category management team that will segment the main areas of the organizational spend on direct materials, and utilize this information in the supplier selection process (moving away from purchasing by vendor, but purchasing by category).
Advantages:
• Allows for innovative thinking, making organizations identify problematic areas, additionally, areas that are costing greater then they should.
• Reduces prices paid through the use of value levers such as demanding reductions in price and discounts. Also, using levers such as aligning prices across purchase points and regional categories can maximise competition in the marketplace.
• Category managers can leverage expertise and insight into a whole …show more content…
This market place has become extremely saturated, creating confusion, which in turn, can lead to additional costs.
3) Continuing on their current path, implementing the processes mentioned in the case:
Advantages:
• Delphi has a strong model for supplier development, understanding what, when, and where to make improvements and process changes.
• With their budget of 50 processes engineers with each person costing $100,000 per year in salaries and benefits, totalling $5,000,000, they would have ample funding to support the implementation of their lean supplier development plan by simply higher less engineers and focusing more funding on the overall process.
• Implementing all nine key elements of the Delphi’s lean supply transformation, that has already been developed, would save large amounts of capital and time as the process has already been designed.
• Less backlash from employees as Delphi has had a strong focus on lean supplier development for many years, simplifying the training process
Disadvantage:
• Divisional and regional presidents would need to understand the implications of lean supplier