Pacific Systems Corporation Case
Executive Summary
This sourcing strategy report represents the result of our analysis of four potential suppliers both domestic and international in an attempt of the company to outsource many key product components and subassemblies, including the 9000x series DVD drives. The identified suppliers include:
- Elecom Technologies: a global firm with solid reputation, and has price as a competitive edge. Their net sale is 1.5 times more than the other three suppliers combined.
- SureTech is a small firm, but located in the US, which will ensure shorter lead time, but has PSC would be their largest contract.
- E-Drive is a large firm and located locally, but has some issues lately with quality and technologies.
- Park Technologies is an excellent supplier with lots of great capacities, but it would take 10 weeks for products to be delivered.
The analysis covers a review of each of the four suppliers’ financial situation, their estimated per unit total cost, evaluation as well as a sourcing risk management plan for the supplier selected.
Terms of reference
To prepare sourcing strategies for key purchased items for Pacific Systems Corporation (PSC), starting with selecting the most appropriate supplier for potentially the next few years
Recommendations
After carefully considering the estimated per unit total cost, SureTech did come out with the lowest cost at $162.5 per unit for year one of PSC needs.
A 7-step supplier evaluation and selection analysis, followed by a weight-point supplier evaluation assignment indicated that E-Drive had the highest score of the scorecard and deserved as the winner of the selection pool.
Sourcing risk management plan for E-Drive was conducted based on all the concerns provided when the team visits. Although quality and management has some issues that needs to be fixed before PSC can negotiate and sign a contract, E-Drive is a large player in the industry and has promised to solve the problem before PSC placed an
This sourcing strategy report represents the result of our analysis of four potential suppliers both domestic and international in an attempt of the company to outsource many key product components and subassemblies, including the 9000x series DVD drives. The identified suppliers include:
- Elecom Technologies: a global firm with solid reputation, and has price as a competitive edge. Their net sale is 1.5 times more than the other three suppliers combined.
- SureTech is a small firm, but located in the US, which will ensure shorter lead time, but has PSC would be their largest contract.
- E-Drive is a large firm and located locally, but has some issues lately with quality and technologies.
- Park Technologies is an excellent supplier with lots of great capacities, but it would take 10 weeks for products to be delivered.
The analysis covers a review of each of the four suppliers’ financial situation, their estimated per unit total cost, evaluation as well as a sourcing risk management plan for the supplier selected.
Terms of reference
To prepare sourcing strategies for key purchased items for Pacific Systems Corporation (PSC), starting with selecting the most appropriate supplier for potentially the next few years
Recommendations
After carefully considering the estimated per unit total cost, SureTech did come out with the lowest cost at $162.5 per unit for year one of PSC needs.
A 7-step supplier evaluation and selection analysis, followed by a weight-point supplier evaluation assignment indicated that E-Drive had the highest score of the scorecard and deserved as the winner of the selection pool.
Sourcing risk management plan for E-Drive was conducted based on all the concerns provided when the team visits. Although quality and management has some issues that needs to be fixed before PSC can negotiate and sign a contract, E-Drive is a large player in the industry and has promised to solve the problem before PSC placed an
References: Monczka, Robert M., Robert Handfield, Larry Giunipero, and James Patterson.Purchasing and Supply Chain Management . 4th ed. Mason, OH: South-Western, 2009. Print