CORE Reviews Questions

Company’s Situation: The oil & gas exploration company needs to update its fleet of offshore vessels but is unsure about the best combination of vessel types and quantities.

RFP Purpose: An RFP is used when the buyer knows the results it requires but needs detailed proposals from suppliers to determine the best solution.

Comprehensive Proposals: RFPs allow suppliers to propose various solutions, including different combinations of vessel types and quantities, and explain how their proposals will meet the company's needs.

Evaluating Solutions: The RFP process provides the company with the information needed to evaluate the most efficient and effective options for updating its fleet.

Conclusion: Issuing an RFP is most appropriate to obtain detailed and varied proposals that will help the company make an informed decision.

References

CIPS. (n.d.). The Use of Requests for Proposals (RFPs) in Procurement.

ISM. (n.d.). Best Practices for RFP Development and Evaluation.

Calculate Total Cost per Supplier: This includes the unit price and shipping costs.

Supplier A: Unit cost is $0.69. Shipping cost is $2000 per 10,000 units.

Total cost per unit: $0.69 + ($2000/10,000) = $0.69 + $0.20 = $0.71 per unit.

Supplier B: Unit cost is $0.71. Shipping cost is $1500 per 10,000 units.

Total cost per unit: $0.71 + ($1500/10,000) = $0.71 + $0.15 = $0.715 per unit.

Compare Landed Prices: The total cost per unit for Supplier A is $0.71, and for Supplier B, it is $0.715.

Decision: Supplier A offers the lower landed price at $0.71 per unit compared to Supplier B’s $0.715 per unit.

References

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.

The supply manager is facing a situation where the training budget has been cut, limiting the ability to train new employees despite having approval for additional personnel and equipment. The most effective action is to:

Identify the Impact: Understand and outline how the lack of training will impact the department's performance, efficiency, and ability to meet organizational goals.

Present Justification: Develop a detailed justification that shows the correlation between training and cost reduction goals. Explain how effective training leads to better employee performance, reduces errors, and increases productivity, ultimately saving costs.

Data and Examples: Use data and examples to support the argument. This could include metrics on employee performance before and after training, case studies, or industry benchmarks that highlight the importance of training.

Align with Organizational Goals: Ensure that the justification aligns with the overall strategic goals of the organization, demonstrating that investing in training will contribute to achieving these goals.

By presenting a well-supported justification, the supply manager can make a compelling case for restoring the training budget to support the department's expertise and efficiency.

References:

Institute for Supply Management (ISM) guidelines on training and development.

Articles and case studies on the impact of employee training on cost reduction and performance improvement.

The first step the supply manager should take in determining where savings can be found in indirect cost categories is to establish a baseline using current spend data. Understanding the current spending patterns provides a foundation for identifying opportunities for cost savings. It allows the supply manager to analyze spending trends, categorize expenses, and pinpoint areas where efficiencies can be improved or costs can be reduced. This data-driven approach ensures that any subsequent actions are based on accurate and comprehensive information.

References:

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management.

Institute for Supply Management (ISM). (2020). ISM Glossary of Key Supply Management Terms.