OPS FPX 5630 Assessment 1 Selecting a Supplier
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Selecting a Supplier
OPS FPX 5630 Assessment 1
Strategic Supply Chain Sourcing
April 18, 2023
This report focuses on the process of selecting a supplier for JM Manufacturing. The company is seeking a supplier for power supply, batteries, circuit boards, drill bits, and plastic casing for their line of power drills. The decision to outsource these components is driven by the variety and specificity of manufacturing required for each part. This report assesses the market, analyzes supplier practices, and outlines the ethical and legal guidelines of the supply chain process between the supplier and JM Manufacturing.
Market Assessment The global power tools market is projected to experience rapid expansion, with an anticipated 8.80 percent increase by 2028, amounting to $54.75 billion (Grandview Research, 2020). This growth is driven by the construction, automotive, and do-it-yourself (DIY) industries. Power tools are extensively used in these sectors to build homes, cars, and various components. Furthermore, the COVID-19 pandemic has led to increased sales for home improvement companies like Lowe’s, which saw its sales surpass $96 billion in 2021, catering to 19 million weekly customer transactions (Lowe’s, 2022).
The expansion of power tools in these industries and the DIY segment necessitates flexible power tools that are battery-operated and mobile. JM Manufacturing recognizes this demand and has decided to outsource the components required for flexibility, including circuit boards, batteries, power supplies, and plastic cases. Establishing a robust supply chain is crucial for cost-effective and reliable components that meet customer demands in terms of price, quality, and quantity (Grandview Research, 2020).
Analysis Global supply chains contribute to strengthening relationships between companies and countries through international trade. JM Manufacturing has already made the make versus buy decision and determined that the total cost of ownership (TCO) favors procuring supplies from a Chinese supplier rather than manufacturing them in-house. TCO encompasses various costs such as raw materials, assembly, quality assurance, holding, finance, forecasting, planning, and shrink costs (Drake and Sabbaghi & Sabbaghi, 2014 & 2004).
Outsourcing production requires meeting the seven “R’s” or rights of logistics: right product, time, quantity, cost, quality, place, and customer. JM Manufacturing’s best practices focus on selecting a supplier that aligns with customer needs, providing the required quality at a reasonable cost while meeting output quantity targets. Implementing these practices across all channels ensures effective supplier collaboration (Redwood, 2020).
Best Practices For global suppliers, JM Manufacturing will follow several practices, including knowledge of supplier practices, standard implementation, relationship building, updated product specifications, audits, compliance, and quality assurance. The initial step involves thorough vetting of potential suppliers, namely Ennopro Group Limited, Shenzhen TL New Energy Company Limited, and Yangzhou Kele Power Tools Company Limited. Once a supplier is selected based on their practices, the standards required by JM Manufacturing will be discussed and implemented. Building lasting relationships with suppliers is crucial for mutual growth, with regular updates to product specifications to maintain innovation, quality, and customer trust. JM Manufacturing will adopt a trust but verify approach, conducting audits and quality assurance inspections to ensure compliance and consistent quality of outsourced supplies (UT Haslam News, 2021).
Supplier Evaluation and Knowledge In order to gain a deeper understanding of potential suppliers, JM Manufacturing has engaged in discussions with Ennopro, Shenzhen TL New Energy, and Yangzhou Kele Power Tools. These conversations encompassed topics such as supplier accountability, production capability, expertise, culture, communication, recordkeeping, ethical and regulatory compliance, and research and development (Knack, 2018).
Derry, T. (2020). “Principles and Standards of Ethical Supply Management Conduct with Guidelines.” Institute of Supply Chain Management. Retrieved from
Drake, M. (2014). “Global Supply Chain Management” [Chapter 3]. New York: NY. Business Expert Press.
EnnoPro Group Limited. (2022). “About Us.” Made in China. Retrieved from https://ennopro.en.made-in china.com/company-Ennopro-Group-Limited.html
Grandview Research. (June 2020). “Power Tools Market Analysis Report.” Grandview Research. Retrieved from https://www.grandviewresearch.com/industry-analysis/power-tools-market
Knack, O. (October 2018). “Looking for Suppliers? 10 Qualities for the Best Suppliers.” Intouch. Retrieved from https://www.intouch-quality.com/blog/5-qualities-of-a-good-supplier
Lowe’s Home Improvement. (February 2022). “Lowe’s Reports Fourth Quarter 2021 Sales and Earnings Reports.” [Press Release]. Lowe’s. Retrieved from https://corporate.lowes.com/newsroom/press releases/lowes-reports-fourth-quarter-2021-sales-and-earnings-results-02-23-22#:~:text=With %20fiscal%20year%202021%20sales,and%20employ%20over%20300%2C000%20associates.
Michigan State University. (February 2021). “Why Companies Should Consider Global Sourcing.” Michigan State SCM. Retrieved from
Pierce, F. (May 2020). “Quality Assurance: Cut Risk with an Aligned Supply Chain.” Supply Chain Digital. Retrieved from https://supplychaindigital.com/logistics/quality-assurance-cut-risk
Redwood. (2020). “What are the 7 R’s of Supply Chain Management?” Redwood. Retrieved from https://www.redwoodlogistics.com/what-are-the-7-rs-of-supply-chain
Sabbaghi, A. & Sabbaghi N. (2004). “Global Supply Chain Strategy & Global Competitiveness.” International Business & Economics Research Journal. [Volume 3, Number 7]. Retrieved from https://core.ac.uk/download/pdf/268107122.pdf
Sandford, N. (August 2016). “Insights for Writing a Code of Ethics or Conduct.” Wall Street Journey. Retrieved from https://deloitte.wsj.com/articles/insights-for-writing-a-code-of-ethics-or-conduct 1471492892
Shenzhen TL New Energy Company Limited. (2022). “About Us.” Made in China. Retrieved from https://tlnewenergy.en.made-in-china.com/company-Shenzhen-TL-New-Energy-Co-Ltd-.html Timothy, H. (March 2022). “Nine Best Practices to Managing Global Suppliers.” Trace Gains. Retrieved from https://www.tracegains.com/blog/9-best-practices-to-managing-global-suppliers
UT Haslam News. (September 2021). “Global Procurement: The Risks and Benefits to the Supply Chain.” University of Tennessee. Retrieved from
https://supplychainmanagement.utk.edu/blog/global-procurement-risks-benefits-to-supply-chain/ Yangzhou Kele Power Tools Company Limited. (2022). “About Us.” Made in China. Retrieved from https://powertools-spares.en.made-in-china.com/company-Yangzhou-Kele-Power-Tools-Co Ltd-.html