Need 100 word reply to each question
You and your boss will meet later in the day to discuss the situation. The big issues to address are:
How do we analyze and select the right bid?
To analyze and select the right bid, one would need to consider the bid elements that are important to Tenace. Base on the case study, it can be interpreted that the company is interested in cost, IP rights, warranty, and design delivery. The estimated product cost shows the cost per unit that each company solution will yield. The duration to complete engineering design is how quickly the design will be completed and production started. Using a company that can provide a complete system prevents any issues with conflicts by multiple contractors. The warranty is important. However, it is less important as the items are made for resale and not for long term use in the company. A trade off decision amongst these elements will be necessary in determining which company / bid to select. In this case, JRS Inc. and Singapore tech Inc. are likely the best value choices. The key decision point between the two companies are per the unit cost ($50 difference per unit), IP ownership right, and time to complete end design. The tradeoff decision will be based on these qualities.
How do we encourage the company to develop an internal bid with so little time left in the program plan?
To encourage the company to develop an internal bit with the little time left in the program plan, you will need to leverage the time for the development of the bid with the advantages of making product in-house. The decision to make the product should consider the need to preserve technological secrets, lower cost, enhance efficiency in labor and equipment, and avoid sole-source dependency (Fearon, Flynn, Johnson, & Leender, 2006). Since the company is concerned with the potential development of the product being available to competitors, then making the product instead of purchasing it will be the base case scenario in ensuring that this does not happen. With Singapore tech, Inc. the company is receiving 100% ownership mitigating the risk of other competitors receiving the technology. A comparison of the unit cost for purchasing and making are also important for the company to make an informed decision. Tenace developing a bid can ensure that a true make or buy decision is made.
Fearon, Flynn, Johnson, & Leender. (2006). Purchasing and supply management (13th ed.). New York: The McGraw−Hill company. Retrieved November 10, 2016, from http://webcache.googleusercontent.com/search?q=cac…
A Total Cost of Ownership Report, Total System Cost Report, as well as a comparison of performance metrics will ensure that all areas of the decision to outsource or insource have been analyzed. These reports will show all of the important information needed so that a decision by the senior management can be made. These three critical criteria’s develop the “To be State or Future State” (Engel, 2004).
When encouraging the company to develop an internal bid, the question “what are the savings that this sourcing effort will bring to the bottom line? “ needs to be asked. Without officially completing analysis of an internal bid, a final selection cannot be made because all options are not on the table. In the end, a decision must be made based upon the best value a supplier can give. Value can be measured based on the companies Key Performance Indicators and their mission and goals. A supplier may be most valuable if they cost the least, but another may be most valuable because they have the best options for future innovation and upgrades, depending on what Tenace Company needs. The Tenace Company must ensure that they have a list of goals that they want to achieve from this project and choose the best supplier (internal or external) that aligns with their goals.
Engel, R.J. (2004, April). Strategic Sourcing: A Step-By-Step Practical Model. Institute for Supply Management.