Supply Chain Management

Question 1

Traditionally, purchasing function was a low- level activity that was decentralized (Monczka, Handfield, Giunipero, & Patterson, 2010). Staff is each department, branch or plant used to make their own purchasing decision. In addition, relationships with supplier were ad hoc in nature. Strategic planning involves systematic planning for the entire organization to ensure its long term survival. However, traditionally purchasing decisions were made at the departmental level in an ad voc manner. Therefore, supply chain management was not involved in corporate strategic planning function.

Question 2

I would consider single sourcing if an item has a high profitability impact and its supply risk is low (Cheverton, 2012). If an item has a high impact on profitability, then cost minimization is important if profits are to be maximized. By single sourcing, I can place large orders hence reap the cost benefits of economies of scale. Secondly, if the supply risk is low then there is no need of diversifying by using several suppliers. The reason most firms use several suppliers as a means of militating against supply risk (Cheverton, 2012).

Question 3

Few companies are classified as stage four companies because few companies have embraced a fully integrated supply chain. Few firms are willing to integrate their supply chains because of the heavy investment required in terms of money, time and human capital in implementing and overlooking such a supply chain. It is even worsened by the facts that the expected returns will neither be realized in the short run neither can it be estimated (Flynn, Morita, & Machuca, 2010). The situation is likely to change as in the future. When companies that have already invested in fully integrated supply chain starts to realize a return on their investments firms, other companies will see the need to follow suit.

Question 5

Vendor managed inventory (VMI) and integrated supplier programs are increasing becoming popular...