Fighting dragons with
dragons: Approaches for
negotiating with Chinese
David partners Gina
Tran and David Taylor
Embrace the unusual as normal
Begin with hard ends in mind
Anticipate and prepare for conflict
Never resist resis
MGSC 487: DISCUSSION QUESTIONS FOR CASES
Describe the competitive environment of the industry and how it relates to LEGOs strategic choices.
Do you see a pattern in the globalization strategy of LEGO? What is this pattern?
Discuss the key consid
Preparation is half the job done
Negotiation objectives should be laid out
From objectives come goals
For each goal, performance outcome should be
specified with 3 scenarios, optimistic,
Get to Know China
Source: Portland State
Over 5,000 years history
Closed after 1949 and re-opened up early 80s
Economy began to boom early 90; fast growth (>7%) for
consecutive 15 years
Area: 9,596,960 sq km; Similar
What are the reasons for firms to resort to
Why Source Worldwide
Access to Technology
Better quality suppliers
Access to On
Hint for Wire Harness Case
Cost of Capital Calculations
A) Corporate cost of capital is 15% times inventory held x cost per unit.
Assume inventory held is 4 weeks in warehouse and 8 weeks in transit, ie 12 weeks of
inventory which is 3 months of inventory
How to Handle Extreme
Negotiations with Suppliers
Hughes, Wadd and
1. Broaden your vision, question
assumptions, rethink objectives
Instead, try .
Assuming you have all the facts,
Look, it is obvious that .
Being curious, Help me understand
Global Sourcing - Articles
What pulled Sony out of China?
What are the products of Sony that this
article is talking about?
Characteristics of this product?
Digital Cameras and camcorders
During the class period, each team should
record (in a bullet point format), your
teams responses to the five questions
listed in the next slide
At the end of class, I will be collecting the
Quantity discounts, which are price incentives to
purchase large quantities, create pressure to
maintain a large inventory.
For any per-unit price level, P, the total cost is:
Total annual cost = Annual holding cost + Annual
Negotiation is a process:
of formal communication,
either face to face or via electronic means,
where two or more people come together to
seek mutual agreement about an issue or
Opportunities and Challenges of doing
business in/with India
Jayanth Jayaram, University of South Carolina
Source: Articles from the web; Mr. Udai Kumar, CEO of OHUM
The question of toys.
Cash to Cash Cycle
1. Forecasting make to stock approach, sales manager needs to forecast demand to
create independent requirements.
2. Production planning based on forecasted sales (1.), planner then runs the MRP, which
automatically generates the raw ma
How many sets of P.O.s are sent out?
2 because there are only two suppliers/vendors
When you release an order in CO41, the orders are processed
One production/assembly line in this case
When you release the P.O.s, why do
What can be shared within supply chain - how can companies share resources.
* physical distribution facilities. DC warehouses. They susually arent owned by the
companies. Trucks and transportation can alsy be shared
ATP available to promise
MGSC 487 Spring 2017
Study Guide for Final Exam
Apr 26 (Wed): 9am to 11am
Topics : Sourcing Risk, Supplier Evaluation, Electronic
Sourcing, Analytical Tools in Sourcing, and Sustainability and
Sourcing. Questions will be on cases, articles (see below) AND
Discussion Questions Readings Strategic Sourcing
What are the advantages of outsourcing service support activities?
What are the dangers of outsourcing service support activities?
How do the authors propose to mitigate the dangers of
Discussion Questions Readings Trends in Sourcing
Top trends in SCM article
What is the example in the article about service chains being more important
than product chains?
What are other examples of service chains being more important than product
Discussion Questions Readings Electronic Sourcing
Vincent Mabert Article
Define an electronic reverse auction
What are the benefits of an electronic reverse auction?
What are the key takeaways from the PIT program?
Thomas Gattiker article
What are some of
EXAM 1 FEEDBACK
Total Exam Grade
% of students
Less than B
A good number
MGSC 487 Spring 2015
Study Guide for Exam 1
Date: March 4
Duration: 1 hour 15 minutes
Coverage: Supply Management, Strategic Sourcing, Global Sourcing and
The coverage for Exam 1 are the following cases, articles from the course
Academician and Student Membership Application
Institute for Supply Management, Inc.
Full-time students and academicians may be eligible for dues-free membership. To obtain information, please call ISM Customer Service at 800/888-6276 or 480/752-6276,
Global Sourcing Strategies and Applications Jay Jayaram
Feb 18 W
Feb 23 M
Feb 25 W
Mar 2 M
Mar 4 W
Mar 9 & 11
Mar 16 M
Mar 18 M
Mar 23 W
Mar 25 W
Global Sourcing (Contd)
Hughes et al. article
Strutton et al
Global Sourcing Strategies and Applications Jay Jayaram
Global Sourcing Strategies and Applications
Class meets Monday and Wednesday 2.20pm to 3:35pm in N109
Dr. Jayanth Jayaram, CPSM, Ph.D.
Financial Ratio Analysis
How capable is the supplier of meeting
short-term cash needs?
Is the supplier over-leveraged and capable of
paying long-term obligations?
Debt to assets
Guidelines for the MGSC 487 Case Extension Report
1) On the assigned date (see the schedule in the MGSC 487 Teams document on
blackboard), the assigned team is expected to present a case extension report to
the class; Typical duration is approximately 10
Wire Harness Case
Reading the newspaper that morning, Sunny, a buyer at Tyche Industries, a Chicago based producer of
subassemblies for the automotive market, has sent out request for quotations (RFQs) for a wiring
harness to four prospective suppliers. O