Question

Question 1: What criteria or key metrics will you use to qualify potential suppliers and measure supplier performance over the term of the contract?

Question 2: What are some of the potential hidden costs beyond initial purchase price that could increase total cost to use?

Question 3: What are at least 3 fundamental risks to the sourcing arrangement in China and what actions do you suggest to mitigate them?

Answer 1

What criteria or key metrics will you use to qualify potential suppliers and measure supplier performance over the term of the contract?

Before even searching for suppliers, we will define what is expected of the supplier. Once those standards are set, we would only consider the suppliers who fit in the mold for what we are looking for in the supplier. Research the potential suppliers to make sure the chance of due diligence is low. It will not matter if the supplier has the best product for the best price if the supplier is found to be unethical in the eyes of the consumers.

What are some of the potential hidden costs beyond initial purchase price that could increase total cost to use?

If there isn’t someone already one the time that can speak Mandarin you could potentially add costs by hiring someone to translate. To protect the company from the supplier trying to dupe them, an attorney should be hired to write the contract in the best interest of the company.

What are at least five fundamental risks to the sourcing arrangement in China and what actions do you suggest to mitigate them?

Not having some who speaks Mandarin on the team. This could be mitigated by hiring a translator when a deal is being made or hiring someone to work on the team who is fluent in English and Mandarin.

1. Not having defined standards for suppliers. This could be mitigated by having a well thought out list of standards before looking for suppliers.
2. Not performing due diligence on suppliers. Before any deals are made with any potential suppliers, the supplier should be thoroughly researched to prevent potential scams.
3. Not having a written contract reviewed by an attorney. Consult an attorney before agreeing to any terms with the supplier so that you are not being potentially scammed. A written contract will keep you protected.
4. Ignorance of the U.S. Foreign Corrupt Practices Act. Consult with an attorney before giving a gift to a government official to prevent breaking the law.