Mid-Term
1. Pg 187 question 10
You have just recently been appointed the company’s Chief Purchasing Officer. You will
oversee a company with worldwide operations located at 55 buying locations. Your
organization has five major business groups involved with the design and manufacture of
health care products (e.g., precision surgical tools, blood testing devices, and the like).
Historically, the purchasing has operated in a very decentralized manner. Design an
organizational structure that allows you to enact value adding strategies. Describe the
reporting structure, the physical placement of personnel, the placement of purchasing
authority, and the coordination of activities with other functional groups.
Now that I have been hired as the new Chief Purchasing Officer (CPO) I would
implement a more centralized and hierarchal organizational structure in order use the
combined buying power of the different product divisions to reduce costs. As the CPO
my responsibility would be to run the procurement divisions in the organization, and I
would report to the Chief Operations Officer. Other CPO responsibilities would include
making sure raw materials and supplies arrive on time, developing strategic plans and
implementing them. I would perform a SWOT analysis and trend analysis to find where
we are headed and what the current best practices are.
The company currently has 55 buying locations and rather than having 55 buying
locations, I would centralize and reduce it to 5 buying locations by product division.
Each product division would be responsible for supplying the previous buying locations
under their control and would purchase in line with the business strategic goals. I would
also have cross-functional teams between Divisions to consolidate purchasing on shared
items in line with strategic goals. Each purchasing representative would report to the
CPO for a daily brief and the CPO would be the approval level for all strategic purchases.
2. Pg 243 question 9
Why must organizations develop suppliers? Is supplier development a long-term trend or
just a fad? Explain.
Some might ask why organizations must develop suppliers. According to Yale Professor
Barry Nalebuff, “Only recently have people begun to recognize that working with
suppliers is just as important as listening to customers.” Organizations must develop
suppliers to build relationships and grow together. It will usually save more time and
money to keep and develop the current supplier when they are not meeting requirements.
Some may question whether supplier development is a long-term trend or just a fad?
Beginning in the early 2000’s integrated supply chain management has emphasized
supplier development, and this will continue to be a long-term trend (Monczka et al.,
2016, p. 27). As the buyer supplier relationship develops and performance metrics are
met this will help the buyer meet their short- and long-term production targets (Monczka
et al. 2016, p. 339). These quotes and paraphrases were used to show that supplier
development is needed to mutually grow and improve buyers and sellers.
3. Pg 282 question 4
Why are supplier-managed inventory and integrated supplier programs becoming more
popular with buyers when selecting a supplier?
