Using Supply Chains to Create Value for Customers
Read this chapter. Think about the processes and key components involved such as costs, outsourcing, social responsibility, environment, planning, and inventory control. Watch the video clips for Who Ya Gonna Call and Amazon Fullfillment. Answer the review questions at the end of each section.
Sourcing and Procurement
KEY TAKEAWAY
Sourcing is the process of evaluating and hiring individual businesses to supply goods and services to your business. Procurement is the process of actually purchasing those goods and services. Sourcing and procurement have become a bigger part of a supply manager's job in recent years, in part because businesses keep becoming more specialized. Companies outsource activities to lower their costs to focus on the activities they do best. Companies face numerous tradeoffs when they outsource activities, which can include a loss of control and product-quality and safety problems. When firms that can't resolve their supplier problems, they find other suppliers to work with or they move the activities back in-house, which is a process called insourcing. Customer should be the focus of any insourcing and outsourcing decisions companies make.