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Unformatted text preview: these overhead costs
can offset much or all of the savings you achieve by
shopping the Web. Objective: Broadening the
• Plethora of horizontal and
vertical marketplaces makes
comparison shopping easier. • Don’t expect to get the best
prices just cruising the Web. • Repeated switching of suppliers
to chase lowest prices can be
hard to manage and cause other
problems that offset savings. The value of deep integration with suppliers is also
highlighted by the effect of subtle changes from one supplier to another in technical
specifications for raw materials and components. Though small, these changes can have an
unfavorable impact on overall manufacturing productivity that may far exceed the savings
generated from shopping the marketplace. The longstanding trend has been toward
developing strategic relationships with a handful of trusted long-term suppliers who can
work with you to drive operating improvements and future technological advantage.
Frequent changes in suppliers based on the use of marketplaces or exchanges would clearly
run counter to these important initiatives. Leveraging volume
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This test prep was uploaded on 04/01/2014 for the course INDE 6370 taught by Professor Staff during the Spring '08 term at University of Houston.
- Spring '08