purch6.docx
6.
Reducing Cost in the Supply Chain
Cost is one of the critical factors in the success of a supply chain. While firms pay attention to many other factors, the cost is never far from the forefront of all analysis. Consequently, organizations have developed many ways to not only measure, but also reduce costs in their supply chains.
For this Discussion, research news articles and provide an example where an organization was able to reduce costs in their supply chain through the use of a specific methodology. Examples where costs were reduced through general improvements and not through a methodology do not fit. An analogous example may be companies improving their quality through TQM or Six Sigma. Include the following information:
1. What is the name of the company? Provide some details on what they do, their competition and their supply chain.
2. How were they able to reduce costs in their supply chain? Remember, this needs to be more than simply people doing better- you are looking to see how they applied a particular analysis or improvement methodology.
3. Do you think others can use the same method to improve their supply chain? Explain what would be required.
Reading
ANALYTICAL METHODS IN SUPPLY MANAGEMENT
Evaluation of a supplier’s actual cost to provide the product or service is critical, but also very difficult to determine. Unit 6 presents a discussion of price and cost fundamentals along with a number of innovative price and cost management tools that can be applied. Also covered are supplemental tools such as value engineering and project management concepts
Journal
Based on your readings in this unit, answer the following questions, with explanations (do not simply name concepts and move on):
1) Among the concepts you have learned, which do you think is most useful to you or your organization?
2) Which concept(s) caused the most confusion in this unit?
3) Which concept(s) did you wish went into further detail, either because you are interested or because it’s too complex for the coverage it received?
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