Reading Lecture 7

Question 1

Supplier quality assurance

Answer 1

suppliers should be able to deliver flawless quality
- you must have a consistent approach
is a prime concern

Question 2

How to get zero defects from suppliers

Answer 2

prepare purchase order specification 
preliminary quality audit of supplier 
sample inspection procedure 
delivery of first and subsequent pre production series
manufacture first production series 
quality agreement and certification 
periodic verification

Question 3

prepare purchase order specification

Answer 3

indicate quality tolerances

Question 4

preliminary quality audit supplier

Answer 4

what qualities are in place? and how do this at the board of directors

Question 5

sample inspection procedure

Answer 5

ask for sample and inspect

time consuming

Question 6

delivery of first and subsequent pre production series

Answer 6

test at the supplier and your side

Question 7

quality agreement and certification

Answer 7

no more inspections

full responsibility on supplier

Question 8

A supplier

Answer 8

top supplier

flawless quality

Question 9

B supplier

Answer 9

barely meets requirements

support them so they improve

Question 10

C supplier

Answer 10

do not meet requirement

get rid of it

Question 11

Typical solutions of supply chain risk

Answer 11

excess inventory

redundant supply

Question 12

Things to do to hedge against uncertainty

Answer 12

• map the supply base
• update books for disruption
• reduce extended payment terms from suppliers
• change the way purchasing managers make decisions
• treat suppliers ethically

Question 13

Things not to do when hedging against uncertainty

Answer 13

• do not dramatically change make vs buy decisions

- don’t bring everything back home

Question 14

map the supply base

Answer 14

• align incentives and systems
• difficult because of churn suppliers, new products, and M&A
• where things come from?
• costs of it have decreased

Question 15

update books for disruption

Answer 15

• high probability of 100 year event
• third parties need to hear of the effects of disruption in your supply chain
• focus on human side of disruption

Question 16

reduce extended payment terms

Answer 16

• can help suppliers during disruption
• only benefit cashflow of buyers
• suppliers cost of capital > than buyers then there is surplus to share

Question 17

change way sourcing managers make decisions

Answer 17

• buyers focus more on cost reduction
• TCO perspective is useful
  - requires a change in incentive
• TVC shifts focus to value
  - - more fragile supply bases

Question 18

treat suppliers ethically

Answer 18

being fair with payment terms should contribute to ethical relationships

Question 19

New keiretsu

Answer 19

for innovating faster and reducing costs
flexible sourcing
integrated systems of components

Question 20

traditional keiretsu

Answer 20

obligational relationships based on trust and goodwill

Question 21

engineering your own keiretsu

Answer 21

• think short and long term
• know your suppliers
• develop trust with suppliers
• balance implicit and explicit communication
• establish a portfolio of suppliers
• build relationships between company and suppliers
• if suppliers underperform see what can be done against
• involve suppliers in developing new products

Question 22

cost

Answer 22

manufacturers avoid hidden costs

Question 23

quality

Answer 23

buyer has confidence the supplier will deliver flawless quality

Question 24

innovation

Answer 24

with the manufacturers support suppliers come up with product breakthroughs