CORE Exam Dumps : Supply Management Core Exam

The best course of action for the procurement specialist to take is to use the information in considering whether to qualify the supplier. This approach involves evaluating the financial risks associated with the supplier while considering other factors such as their capability, quality, and delivery performance. This due diligence ensures that the procurement decision is informed and balanced, reducing the risk of future financial instability affecting supply chain operations.

References

"Procurement and Supply Chain Management," Kenneth Lysons and Brian Farrington.

"Financial Intelligence, Revised Edition: A Manager's Guide to Knowing What the Numbers Really Mean," Karen Berman and Joe Knight.

Initial Situation: The operations team at DEF Inc. established specifications for a new piece of equipment.

Finding Suppliers: The supply manager discovers that the specified features are outside normal equipment standards and require costly custom modifications.

Cost Concern: These modifications will significantly increase the cost, exceeding the budget by 2.5 times.

Review Specifications: The supply manager should first review the specifications with the operations team to determine if all requested features are essential or if adjustments can be made to align with standard offerings.

Align with Market Availability: Ensuring that specifications are realistic and align with what is commonly available can help manage costs and meet budget constraints.

References

ISM. (n.d.). Cost Management and Control in Procurement.

CIPS. (n.d.). Effective Specification Management.

The willingness of a supplier to deal with rejected materials, manage order surges, and provide technical support is greatly influenced by the relationship they have with the buying organization.

Creating teaming agreements with suppliers: This can formalize collaboration but does not inherently foster goodwill and responsiveness.

Negotiating inclusive terms and conditions: Important for clarity and expectations, but it is the relationship that often determines the supplier’s extra effort.

Maintaining good supplier relationships: Strong relationships encourage suppliers to go above and beyond the contractual requirements, fostering a sense of partnership and mutual support.

Including such conditions in the statement of work: Ensures these terms are contractually agreed but does not guarantee the supplier’s proactive engagement.

Thus, the most influential factor is maintaining good supplier relationships.

References:

Supplier relationship management best practices.

Articles on the impact of relationship management in supply chains.