1. This section introduces the basic concepts of supply base assessment versus supplier assessment and their application to the whole scheme of supply chain management in the tire industry. An evaluation is also made for supply chain management challenges that face multinational companies and the role of ethics, environment and CSR in the assessment process. (a) Assessment of a Supply BaseSupply base can be taken to refer to the pool of suppliers that organization relies on, for all its supplies. Supply base management involves either supply base optimization, or supply base reduction.
Optimization involves increasing the number of suppliers who serve the organization, mostly with intention of minimizing risks of supply shocks. Organizations also engage many suppliers so as to get competitive prices. Supply base reduction, on the other hand, entails reducing the number of suppliers with an intention of adopting a good supply base orientation (Fisher 1997). The buyers of modern times are finding it rewarding to participate in the supply base management through forming trade contracts. Supplier base assessment is a logistical problem which defines the terms of acquisition of products by the buyer from the supplier. Supply chain design refers to the set of activities that are carried out to avail the supplies to the buyers’ point of convenience.
The activities range from storage, transportation, fragility and even after sale services. The combination of these activities together forms the supply chain design. The design chosen and adopted for a specific product depends on the product features. Highly fragile products will require specialized handling tools and procedures and the design of their supply chain must reflect that. It follows, therefore, that such items incur higher costs than ordinary products.
Very sensitive products will require specialized warehouses for storage and transportation. On the other hand, high value products, may call for high security measures (Khan & Creazza 2009). It would be safe to state that the physical attributes of a product dictate the handling specifications and by extension the supply design costs. Both supply base and supplier assessment are involved will devising robust means of supplies acquisition. Supply chain management has been taunted as a core competency in today’s business world. The world is confronted with unexplained inflationary tendencies that push the prices of inputs up.
Manufacturers must respond by strategically planning for their supplies so as to remain competitive in product markets. Both supply base and supplier assessment are great compliments in achieving that feat. Supplier assessment differs from supplier base on the scope. Supplier base refers to objective combination of suppliers who could satisfy the needs of the organization by giving assurance for timely delivery of supplies, quality supplies and at the lowest prices. Supplier assessment on the other hand entails evaluating a specific supplier in totality.
It entails analyzing all the attributes of the supplier, including the quality of the products offered. It means that supplier assessment gives rise to supply base. The assessment process can take three levels – operational, tactical and strategic. A complete and fact finding assessment would make use of all three levels. Operational assessment is the most basic and focuses on the day to day working of the supply base. The concern is the efficiency with which the junior level activities are undertaken.
Such would include the time for delivery, the time between order placement and its processing. The assessment would include after sale services and the waiting time in the queues in the supply base.