Thomas Choi and Tom Linton (2011) Don’t Let Your Supply Chain Control Your Business. Harvard Business Review, 2011 December, 112-117. Article Review

1. Are there any potential cases or circumstances whereby a company SHOULD give more control to first tier suppliers? If yes, how can this be achieved given the problems indicated within this Harvard Business Review Article? If no, why not?

Potentially yes, if the company perhaps manages a huge number of diverse or different product lines and can’t afford the costs associated with maintaining them all, yet doesn’t want to cut them. There are always problems with relinquishing control within a business though, you do face the factors discussed earlier and this isn’t that great to have to deal with a decreased amount of information, as that’s what business decisions need to be based on, information available. Ideally in abundance.

2. If first-tier providers were to provide considerable information about their lower tier providers, do you think that an argument might be made for this control to be relinquished by the OEM to the top-tier?

This is difficult, again potentially yes as this addresses the barriers to relinquishing control as discussed in question one, however it’s still risky, as you don’t know what information the top-tier provider, who has to think in terms of its best interests, might be withholding from you. Unless there’s a dedicated, direct channel between second and third tier providers and the OEM there’s not much of an argument for this really. If it’s getting to that level of communication it may be worthwhile attempting to cut costs by cutting out the first tier provider entirely and dealing directly with the lower tiers.

Thomas Choi and Tom Linton (2011) Don’t Let Your Supply Chain Control Your Business. Harvard Business Review, 2011 December, 112-117.

Article Summary

This article, “Don’t let your supply chain control your business” speaks to the notion of passing on responsibility for various aspects of an OEM’s (Original Equipment Manufacturer) production line to first-tier companies, whom thus gain control...