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9 Cards in this Set
- Front
- Back
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What is supplier tiering |
Is structuring suppliers into a number of levels to enable the buyer to establish long term relationships with a smaller number of suppliers |
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Consequences of tiering |
Loss of direct control and visibility of lower tier suppliers Selecting first tier suppliers will be a more crucial strategic excessive involving key stakeholders |
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Benefits of tiering |
Fewer tasks more time to peruse other strategic jobs Fewer commercial relationships to force and manage |
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3 advantages of multiple sourcing |
Mitigates supply risk Better value for money Avoids lock in relationships |
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2 disadvantages of multiple sourcing |
Fewer opportunities to develop value adding relationships Higher procurement cost in relation to transactions and administration of supplers |
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3 advantages of single sourcing |
Better and consistent quality Bargaining power - all business Built a relationship |
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2 disadvantages of single sourcing |
Supply risk Supplier complacency |
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3 advantages of partnering from buyers viewpoint |
Greater stability of supply and pricing Share risk and investment Cost savings from reduce supply base |
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2 disadvantages of partnering |
Complacency Locked in |
