Don't Let Your Supply Chain Control Your Business

Topics: Supply chain management, Inventory, Logistics Pages: 3 (970 words) Published: February 28, 2015
Global Supply Chain and Operations Management
Prof. Qing-yan Wu

Mid-Term Case-Study Report:
Don’t Let Your Supply Chain Control Your Business

“Manufacturers are delegating too much power to top-tier suppliers, undermining their own ability to innovate, cut costs, and manage risk”. By Thomas Choi and Tom Linton HBR2011

Stanley Polo 401412309
Carolina Vidarte 403416270
Diego J. Rod 403416244

Don’t Let Your Supply Chain Control Your Business
Case Summary and Analysis

Thomas Choi and Tom Linton make a conclusion is based on studies of practices in nearly 20 leading multinational companies in which the authors have direct experience. In the article that have found that a heavy reliance on first-tier suppliers to OEMs is dangerous, control over costs weakens, reducing their ability to stay on top of technological advances and changes in demand, makes difficult to ensure that its suppliers are operating in a socially and environmentally sustainable manner. The proposed solution is that the OEM forged direct relationships with a select number of lower-tier suppliers, and article explain how to choose the right, to maintain control over the elements that have the most big effect on the total cost of sales impact, considering the potential of a supplier to innovate, take into account the environmental and social impacts of the parties including the processes used to produce them and get closer to suppliers who can provide timely information on changes in the economy. Some of the Dangers that firms commonly face with Supply Chain Less control over costs

Managers of large OEMs assume that they can save money by outsourcing the design and production of major supply subsystems. If a company delegates considerable control of products bill of materials, total costs will be opaque to the OEM. Firms have little leverage to reduce costs in critical situations.

Less visibility into technology...
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