Question

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In today's world, establishing a solid supply chain network regarded as one of the main factors for getting a successful competitive edge. Companies are now participating in systems for manufacturer rationalization and restructuring. In most commodities such systems promote single-sourcing. A single supplier company has the advantage of providing socially compatible actions and reacts at a much quicker rate that is not found with multi-supplier organizations. Similar to multi-supplier organizations, a single manufacturer organization is more cost-effective and requires less processing time. During cases of emergencies, a single supplier company will have minimal choices while a multi-supplier entity has alternative solutions to look with to fulfill the requirement. A single source company restricts the enterprise to a single commodity, while different suppliers will potentially extend and make choices. By opting to use a few suppliers, the company will establish long-term relationships with its suppliers (Vonderembse, 2013). "These partnerships allow both parties to work together to better incorporate the supply chain and to establish approaches that can increase efficiency and minimize costs" (Vonderembse, 2013, p. 123). The manufacturer and the company will work together to decide what exactly the component will be doing and how it will function. This may be counterproductive to the company and the customer, depending on the number of components purchased by a particular manufacturer.

Answer 1

Answer:

If we look on the below table for the comparition between the two suppliers sourcing for the manufacturers.

Single supplier Sourcing	social compatible	cost effective, less processing time	Long term relationships with suppliers
Multi Supplier Sourcing	More options in emergency	More variation and choices for commodities

Some do's and dont's of the rationalization.

• Best practice is exact behavior to change, protect, separate, watch the supplier distrubition system.
• When switching from larger supplier volumes to fewer suppliers, companies need to ensure that the selected suppliers have the capacity and ability to handle larger quantities and meet quality and quality requirements deadlines that are the main criteria.
• Reducing the supplier base without establishing contractual relationships with suppliers could disrupt product delivery.

Competitiveness of suppliers (indirect category), which can be addressed by examining other aspects of supplier performance in addition to quality such as certifications and financial performance

Price volatility problem (direct category) due to possible downward fluctuations in the market. This can be solved by focusing on the main differentiation point for each category / subcategory.

Therefore it is good to reduce the suppliers, if we look the cost opotimization as a bigger factor since it reduce the P2P costs.

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