SCM 421 Topic 14: Buyer-Supplier Relationships and Value Co-Creation
Intent and behavior are the building blocks of trust-related capabilities. a. true b. false
a. true
The supply base rationalization process is a strategic review of your supply base and follows the supplier selection template. a. true b. false
a. true
To collaborate effectively with alliance partners you have to share resources and be willing to accept inter-dependencies. a. true b. false
a. true
The trust maturity framework helps you align your investments to a level of trust that you and your organization need. Which of the following is not a stage in the framework? a. Relational trust b. Absolute trust c. Transactional trust d. Collaborative trust e. All of the above are stages
b. Absolute trust
Many factors influence the decision of whether to sole source or multiple source. Which of the following is not one of those factors? a. characteristics of the market b. buyer capabilities c. supplier capabilities d. purchasing philosophy of the buying firm
b. buyer capabilities
According to Honda Sensie, Teruyuki Maruo, suppliers don't trust purchasing because purchasing means __________. a. time b. cost c. effort d. trust e. people
b. cost
Aggregating purchases is the same as leveraging volumes with suppliers. a. true b. false
b. false
As a supply manager, you should view value co-creation relationships as a cost—not an investment. a. true b. false
b. false
Companies should do whatever it takes to develop productive relationships with every member of their supply chain. a. true b. false
b. false
Supply base rationalization means reducing the overall (i.e., total) number of suppliers to the least amount needed to meet your demand. a. true b. false
b. false
Transactional relationships are not important, only strategic alliances are. a. true b. false
b. false
Pressure to "make the numbers" drives opportunism and creates what we call a social dilemma. What action might eliminate opportunism? a. banning all value co-creation actions b. perfectly aligning goals and metrics c. picking the lowest cost suppliers d. incentives and rewards e. finding new supply partners
b. perfectly aligning goals and metrics
Approximately what percentage of supplier relationships are transactional? a. 60% b. 20% c. 80% d. 30% e. 100%
c. 80%
What are the two primary objectives of supplier development? a. Decrease supply options, Improve process capabilities b. Improve strategic focus, Increase supply base c. Improve process capabilities, Increase supply options d. Increase ROI, Decrease supply risk e. None of the above
c. Improve process capabilities, Increase supply options
What are the four stages of Deming's PDCA model? a. Plan, Define, Check, Analyze b. Place, Define, Calculate, Act c. Plan, Do, Check, Act d. Practice, Do, Check, Analyze
c. Plan, Do, Check, Act
When it comes to sourcing supplies, companies tend to follow one of two philosophies. What are they? a. Dual sourcing, multiple sourcing b. Single sourcing, aggregate sourcing c. Sole sourcing, multiple sourcing d. Aggregate sourcing, independent sourcing e. None of the above
c. Sole sourcing, multiple sourcing
A relationship where you cultivate close working relationships to improve processes or develop innovative products is known as which of the following? a. Transactional relationship b. arm's length relationship c. leverage relationship d. strategic alliance e. none of the above
c. leverage relationship
Which of the following are two likely outcomes of building the wrong relationship with the right supplier? a. right time and right price b. tickets to a football and basketball game c. wasted resources and lost opportunity d. salary increase and end-of-year bonus
c. wasted resources and lost opportunity
A buyer can potentially achieve a price reduction in three primary ways. Which of the following does not represent one of those three? a. Negotiate with your incumbent supplier b. Introduce market competition by dual sourcing c. Leverage volumes with a single supplier via long-term contracts d. Continue with the status quo and existing supply base e. all of these are ways to reduce price
d. Continue with the status quo and existing supply base
Which is not a benefit of trust in a buyer/supplier relationship? a. Promotes a willingness to adapt while acknowledging vulnerability b. Allows you to sacrifice short-term gain for long-term advantage c. Enables collaboration, resource sharing, and risk taking to co-create value d. Emerges by chance in a relationship e. all of the above
d. Emerges by chance in a relationship
Which of the following is false about transactional suppliers? a. They do not expect you to invest in capabilities b. They recognize that relationships are cost driven and arms length c. They need efficient buying practices and processes in place d. They have sufficient resources to waste with good customers
d. They have sufficient resources to waste with good customers
Honda follow's Deming's PDCA model. Which of the following is a process step in that model? a. perform b. deliver c. count d. act e. none of the above
d. act
Your goal in rationalizing your supply base is to help your company win in the marketplace by building the right __________ with the right __________. a. alliances, customers b. infrastructure, company c. relationships, infrastructure d. relationships, suppliers e. strategies, suppliers
d. relationships, suppliers
What do you call the process of determining how many and which suppliers you should buy from as well as defining the type of relationship you should build with each supplier? a. supplier reconciliation b. cost management theory c. customer based realization d. supply-base rationalization e. none of the above
d. supply-base rationalization
Building trust requires an investment of resources that include: a. time b. effort c. money d. products e. A, B & C only
e. A, B & C only
Which of the following is NOT true regarding with supplier development? a. t can help identify/develop suppliers for products currently unavailable b. It can dramatically improve suppliers' capabilities c. It can achieve global competitiveness d. It can build a synergistic relationship e. It focuses on price and profit for your organization
e. It focuses on price and profit for your organization
Honda has seen excellent results from supplier development efforts, including which of the following? a. improved quality b. improved labor productivity c. continuous improvements in process capabilities d. upstream improvements for the suppliers' suppliers e. all of the above
e. all of the above
Honda's BP program includes which of the following? a. best position b. best price c. best product d. best performance e. all of the above f. A & B only
e. all of the above
Which of the following is something an organization might "DO" during the PDCA process? a. improved quality b. improved labor productivity c. continuous improvements in process capabilities d. upstream improvements for the suppliers' suppliers e. all of the above
e. all of the above
Which of the following is true regarding strategic suppliers? a. Represent 5-10% of your supply relationships b. Account for a disproportionate amount of spend c. Account for almost all value co-creation opportunities d. Are partners in profit e. all of the above
e. all of the above
Which of the following is true regarding the pressure to "make the numbers"? a. drives opportunism b. creates a social dilemma c. is driven by short-term operating and financial mindsets d. hinders value co-creation e. all of the above f. A & B only
e. all of the above
Why is building the right relationships with the right supplier a complex and difficult task? a. You must select and manage suppliers for every SKU your firm purchases b. You source from hundreds, if not thousands, of suppliers c. You buy the same SKU from multiple suppliers in multiple geographies d. Your company may believe that you get the best price by pitting suppliers against each other in a bidding process that undermines value co-creation e. all of the above f. A & B only
e. all of the above
Small-volume purchases, providers of commodities, or one-time buys should be managed to ________________________. a. maximize trust b. minimize costs c. assure innovation d. assure availability e. both B & D
e. both B & D
Sometimes you don't actually need all the parts you are buying. General Motors discovered it was using 270 types of radios in its cars. GM cut back to only 50. What does this exemplify? a. rationalization b. decentralization c. tiering d. aggregation e. standardization
e. standardization
Which of the following is a relationship goal of a transactional relationship? a. maximize value co-creation b. assure availability c. minimize costs d. maximize the life cycle of the product e. all of the above f. B & C only
f. B & C only
Trust is built by which of the following? a. withholding information b. taking advantage of the skills of alliance partners c. being empathetic d. developing interpersonal relationships e. all of the above f. C & D only
f. C & D only
