Question

What is the recommended sourcing strategy for the below situation.

For more than 86 years, James Tisdale Washington, Inc has manufactured wood stoves for mobile home use. In recent years, with the influx of energy prices, President Barbara Smith has witnessed sales quadruple. This increase has made it tough for Barbara to maintain quality in all her wood stoves and related goods in Tulsa, OK. Unlike other organizations that manufacture and sell wood stoves, JTWI has not made any updates to their business model. Barbara expresses some areas of concern for the organization in the areas of cost containment, risk management, globalization, technology, and customer relationships. Eric Jones, the Central Procurement Officer, feels that the company should refocus on strategies and ojectives related to supplier innovation, supplier relationships, e-Procurement, managing cost/price and managing global supply base. Richard Phipps, the Manager of Operational Excellence feels that some of the organizational enablers are e-Sourcing, global buying groups, and business unit leaders. Although he feels that these enablers could benefit the company, he is concerned about maintaining privacy and holding onto proprietary information, which could be compromised by using the previously mentioned strategies. Barbara feels that e-Sourcing, global buying groups, and business unit leaders are key to the companies success in the upcoming year. These strategies will help them with their current need to develop stronger supplier relationships, outsourcing options, and maintaining professional control over the purchasing process. Eric believes that centralized purchasing and leveraging purchase volume for better pricing from suppliers will yield benefits for the JTWI. The inventory turnover ratio has been excellent for JTWI this year.

Answer 1

The recommended sourcing strategy for the above mentioned case is Global sourcing. The strategy would enable JTWI to source raw material from not only within the country, but outside as well. Thus, being able to purchase material globally. The company would benefit from having an extensive supplier base and being able to select the most suitable supplier. Also, this strategy will help procure goods at a fair price and the JTWI will be having a stronger supply chain to support the sudden rise in demand of products manufactured by the company.