Supplier Selection

Supplier Selection - SUPPLIER SELECTION Chapter Five:...

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SUPPLIER SELECTION Chapter Five: Supplier Selection The Problem of Supply Base Rationalisation - Ericsson rationalised its supplier base during the 1990s, - resulting in one supplier of radio frequency chips for its mobile phones; Phillips in New Mexico - March 2000 storms devastated the production plant - Ericsson lost months of production capability; suffered $400 million damages - The highly competitive nature of business made sourcing alternative suppliers difficult - As a result Ericsson had to pull out of mobile phone construction - Now outsources entire production of its handsets Massive pressure to select the right supplier first time around: o To maximise value creation o Practices such as outsourcing, rationalisation, collaboration, and cooperation on NPD o Improves business performance o raises buyer dependence on supplier o reduces mutual ability to end the relationship as asset specificity increases Stage Two: Selection Criterion
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Supplier Selection - SUPPLIER SELECTION Chapter Five:...

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