Module 2: Buy It: Managing Supply (ASU-WPC-SCM) - ASU's W. P. Carey School

Summary

This script emphasizes the importance of a healthy supply chain to an organization, likening it to the human body's need for proper nutrition. It highlights the role of purchasing executives in selecting high-quality materials and services, balancing cost with quality, delivery, and supplier flexibility. The narrative illustrates that corporate purchasing is a complex process requiring relationship, negotiation, and analytical skills, ultimately affecting the company's success and customer satisfaction.

Takeaways

• 🥗 The analogy of 'you are what you eat' is used to emphasize the importance of quality in the supply chain, suggesting that a company's success is built on the quality of its inputs.
• 🏗️ Supply chains are compared to the bones and muscles of an organization, highlighting their foundational role in the company's structure and function.
• 🛒 Purchasing executives are responsible for sourcing high-quality materials and services, akin to shopping for the company's 'nutritional needs'.
• 💡 The script suggests that individuals develop purchasing skills in their personal lives, which can be related to corporate purchasing decisions.
• 🛍️ Outsourcing purchasing to others raises concerns about the quality of choices made on one's behalf, emphasizing the importance of internal control over purchasing decisions.
• 🚗 The example of a car with the cheapest parts illustrates the potential negative outcomes of prioritizing cost over quality in purchasing decisions.
• 🔑 Purchasing considerations should extend beyond cost to include factors like quality, delivery speed, and supplier flexibility.
• 🤝 Procurement specialists require excellent relationship, negotiation, and analytical skills to effectively manage the company's supply needs.
• 🌐 The complexity of corporate purchasing involves buying in large quantities from a diverse range of suppliers, many of which may be geographically distant.
• 🔄 The first step in the supply chain is buying supplies and services, but the quality of these inputs directly affects the final products and services offered to customers.
• 🔑 The success of a company and customer satisfaction are dependent on the understanding and management of the complex nature of corporate purchasing and supply chain management.

Q & A

What is the main message conveyed in the commercial mentioned in the script?

The main message is 'You are what you eat,' emphasizing the importance of consuming good foods for building a healthy body.

How does the script compare supply chains to the human body?

The script compares supply chains to the bones and muscles of an organization, highlighting the need for healthy nutrients, which in this context are high-quality materials and services.

What role do purchasing executives play in a company's supply chain?

Purchasing executives are responsible for buying high-quality materials and services, acting as the 'shoppers' for the company and ensuring the supply chain remains efficient and effective.

Why is it important for purchasing executives to consider more than just cost when making purchases?

It is important because factors such as quality, delivery speed, and supplier flexibility can significantly impact the company's success and customer satisfaction.

What are some of the skills required by procurement specialists in managing a company's supply chain?

Procurement specialists need to have excellent relationship, negotiation, and analytical skills to effectively manage the supply chain.

How does the script suggest the impact of poor purchasing decisions on the company's products and services?

The script implies that if the supply chain is fed with 'garbage' or low-quality supplies, it becomes difficult to manufacture top-quality products and services for customers.

What is the significance of the phrase 'you are what you negotiate' in the context of the script?

The phrase suggests that the outcomes of negotiations, particularly in purchasing, can define the quality and efficiency of the supply chain, which in turn affects the company's performance.

What does the script imply about the complexity of corporate purchasing?

The script implies that corporate purchasing is complex due to the large quantities bought, the variety of suppliers, and the potential distance of suppliers from the company.

How does the script relate personal purchasing skills to corporate purchasing?

The script suggests that individuals, as customers, have developed purchasing skills that can be analogous to the skills required in corporate purchasing, such as considering quality and cost.

What is the final takeaway message from the script regarding supply chain management?

The final message is that effective supply chain management is crucial for a company's success, as it is dependent on the quality of supplies and the expertise of executives in purchasing and negotiation.

How does outsourcing purchasing to others affect the quality of purchases made in the script's example?

The script uses the example of outsourcing to illustrate that if others make purchases for you, there might be a tendency to buy the cheapest items, which could compromise quality.