Eliminate the Middleman

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Introduction

The process of managing modern supply chain involves a lot of effort from people that are highly trained, motivated and experienced. Despite the traditional job descriptions as distributers’ purchasers and producers, in today’s competitive world we also need good financial, executive, operational and customer service officers. Everything’s more complex and a lot of processes need to be done right in order to run successful business from this caliber. Revolutionary changes are introduced, combining the good old way of doing things right, with the new technology and innovations, also brand new ideas and concepts mixed with the traditional labor power and management. The most difficult part here is to find the perfect balance between the supply and the demand. Reinventing the supply chain management requires smart outsourcing and off shore transport. Companies have started adapting their business models to the new supply chain model. Globalization has done her own role in all of this and you need to react fast if you want to stay in the game. New and more efficient sources are in demand. Thus, from this demand comes the even larger demand for finished goods or raw materials on the market. Maybe the most important issue is the agility of the companies, how prepared are they to answer to these changes.

What should USTech’s sourcing strategy would be?

US Tech is a company that has a unique problem in the matter of supply chain management and logistics. The company is at burden whether to maintain their relationship with their supplier, TaiSource or find new and alternate Chinese supplier and maybe future partner for their business and operations in the Chinese market. All odds are in favor but let’s see how the company can cope with such a complex case. For starters the want to end the relationship with TaiSource but this can be a very big mistake, because TS knows all the details about every product of UST. In the near future TS can find another customer and use the concept of UST and became their biggest competitor and rival. A wise move is to keep the old ongoing relationship with TS, not to focus only on one single supplier and try to find more in order to cut costs and expand market share. UST’s and TS’s relationship is now outdated and that’s why UST can’t fully rely on the services from TS. By certain actions done by the TS’s management, the people in UST have realized that TS is planning to launch their own product line in the near future. After that the biggest rival of UST will be TS. Despite all of this going on, if UST still has a good will and powerful negotiations prepared they might save their relationship with TS. It will be unwise to abandon them just because of the current information that they possess. The processes should go simultaneously. While one part of the company will focus on finding new suppliers, the other need to work and find a way to save even to improve the relationship between their companies. Maybe the problem here lies in the so called middle man of the company, their sales representative to be more specific. Seems that he CEO of TS doesn’t like and trust the current sales representative of UST. They can try to fix this by replacing that person. All Chinese suppliers are perceived as low wage, their ability to meet demand and quality is questionable. This is the perception about the Chinese supply market by many of the world companies. They are still afraid that a high end quality goods and services can be found in their offers. UST was encouraged to dig even deeper in the search for a new qualified supplier. Because of the previous positive experience with TS, they still don’t believe that they can find supplier that will match the quality and innovations provided by TS. But what if, UST do finds out maybe even better one than TS. Again another problem arises. They may find the perfect company, but would this company will make the perfect...
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