1. What is your recommended sourcing strategy in this case? Please support your decision with quantitative and qualitative evidence gathered during the case analysis. Also, present your plan to reduce any risks associated with your sourcing decision. Pacific Systems Company should single source their DVD drives and build a good relationship with the chosen supplier. Not only computer industry is hungry for DVDs, other electronic sectors such as home entertainment devices are competing for this item too, making lack of supply a major issue. If Pacific Systems wants to guarantee supply in such environment, it would be a good idea to create a single source strategic alliance with a long-term contract (2 years),
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We have evaluated the capacity by visiting the facilities, checking the production lines, and going through quality, delivery and used capacity ratios. The capacity to increase delivery quantities of a supplier within short lead times is important as the buyer may be uncertain about their exact quantity needs over the life of the contract. This is particularly important for long-term contracts. Although Pacific Systems has already forecasted certain units, unforeseen market events might change the amount of units needed and therefore a further capability analysis is always necessary in order to make sure that the suppliers fulfill the requirements. 5. Supplier selection decisions, such as the one presented in this case, usually require many weeks or months of analysis and discussion before reaching final agreement with a supplier(s). Creatively identify ways that the buying company can shorten the time from recognition of a purchase need to reaching agreement with the selected supplier. (Hint: Consider performing certain required activities concurrently or in anticipation of a purchase requirement).
Competitiveness customer pressures are demanding lower cycle times in all business activities. The sourcing process is one of them and many approaches can be undertaken to reduce the cycle time for this operation.
Although having a process map of the