Supply Chain Management: Auscotton Strategic Sourcing Analysis

This report provides a comprehensive analysis of supply chain management, focusing on the evaluation of an existing ordering system and strategic sourcing processes within the context of a case study involving Auscotton. The report assesses the effectiveness of the current ordering system, identifying its shortcomings and suggesting improvements, such as offering quantity discounts. It further explores major global issues relevant to strategic sourcing, including product quality and time-to-market, and analyzes their impacts on demand and transportation. The report recommends strategies to mitigate these problems, such as implementing modern technologies for demand forecasting and fostering collaboration between management, employees, and customers. Additionally, it highlights essential elements of the strategic sourcing process, such as category profile analysis, demand analysis, and supplier market analysis, and presents data visualizations to illustrate the potential for performance improvement. The report concludes with a discussion on addressing challenges related to contract manufacturers and illegal merchandise.

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Logistics and Supply Chain Management
By (Name)
Name of the Course
Title of the Instructor
Institutional Affiliation
City and Date
The final date of Submission

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Evaluate the Effectiveness of the current ordering System
The ordering system in every organization is one essential parameter that has the
capability of adequately determining the condition of future outcome. As far as this case study is
concerned, the ordering system is not that effective compared to what any other ordering system
is capable of doing (Stank, Keller and Daugherty 2016).
Moreover, there is only one exciting thing about the ordering system where the Eastern
Power storeroom appears to be much concerned about carrying out a reduction in terms of lead
time through an adequate assurance to their consumption of a regular spot in the entire
production schedule of their supplier (Wang et al. 2016). On the other hand, a very efficient
ordering system has the capability of providing a discount for a specific amount of goods
purchased by a given customer or consumer, the ordering system in the case study does not have
any room for offering any quantity discount for the product thereby disqualifying it from being a
useful kind of ordering system (Mangan, Lalwani and Lalwani 2016). Additionally, there is no
need for the supplier to give a high value in terms of the total number of that needs to be on an
order because this is one condition that is set to provide a hard time to Eastern power storeroom
since it has a lesser space where it can only store 90,000 meters of the aluminum service capable
which is far much below the value that is expected to be on order (Mason-Jones and Towill
2016). In conclusion, this current ordering system is not useful since it doesn't have the
capability of meeting the needs of the customers according to their expectations.
Can an improvement be made to the current system?
Adequate and reliable improvement can be made to the whole current ordering system to
ensure that it is capable of meeting the needs of various personalities within the stipulated time

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frame (Sheffi 2016). This improvement can be carried out through the implementation of quite
several adequate and reliable strategies that can be easily understood by various individuals and
organizations involved in the process. One of the major improves that can be carried out is to be
able to offer reasonable discounts depending on a certain amount of order that a customer intends
to make. This will further motivate the customers and even allow them to make more orders
since they will develop a feeling of being valued.
Recommendations
In order to ensure that the entire business becomes a success in terms of meeting the
needs of all the customers in real time without experiencing any forms of delay, there is the need
of the top management officials to come together in order to evaluate some of the best strategies
that will help them to attain one of the best ordering systems that value a good number of their
operations and objectives (Christopher and Towill 2016). Moreover, the top management
officials should also work closely with the employees for them to figure out some of the areas
where loopholes might exist thus allowing coming up with appropriate recommendations in real
time.
Assessment 2
What are the major global issues that will be relevant to the entire area associated with
strategic sourcing?
As far as the market platforms together with the supply sources of Auscotton are concerned,
there appear to be quite several global issues that will be adequately relevant to the entire area of
strategic sourcing. One of the significant problems is product quality. The qualities of the
products that are attached to AusCotton are known to have quite a several ramifications over and

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above and above the relevant unit cost in as much as the balance sheet is concerned (van Damme
and Ploos van Amstel 2016). The poor quality of products that are being produced by the
contract manufacturers makes it quite tricky to appropriately address the goods with a particular
vendor or even customer through various aspects of cultures and geographies. Moreover, the
poor quality of the products produced and sold through a good number of gray market channels
is known to have the capability of affecting everything downstream with the major one being the
rate of return that is obtained from those customers who are not satisfied with the products
(Croxton et al. 2016). On the other hand, performances will be able to drain the entire business
thereby taking up quite a several resources most so the ones that are typically focused on various
aspects of doing away with good products from the market as the whole platform.
On the other hand, the second major global issue that will be relevant to the area of strategic
sourcing is the time taken to reach the targeted market. As far as the worldwide business
environment together with the positioning of the AusCotton is concerned, it is clear beyond any
reasonable doubt that the total time to the market is among the critical factors when it comes to
the implementation of quite several sourcing decisions (Min and Mentzer 2016). This mainly
emerges as a result of the Intensifying competition received from various types of manufacturers
who at some point tend to have multiple products that are available more quickly thus leading to
a severe loss of market share together with market revenue.
What are the impacts associated with less than perfect demands for Auscotton products
The problem areas are known to have quite several effects. Firstly, there will be difficulties
being experienced in terms of transportation services most so when various products are being
moved from the areas where contract manufacturers are situated to the areas where there are

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distribution centers (Manuj and Mentzer 2016). Moreover, there will be difficulties in
determining the level of required demand in various market platforms thus making it difficult to
adequately satisfy the needs of all the available potential customers known to be situated in
multiple locations, this is majorly due to lack of appropriate and reliable data that is capable of
providing much information in relation to market demand.
Strategies that should be implemented to mitigate the above problem areas
There are quite several policies that should be adequately implemented to ensure that the
occurrence of the problem areas is efficiently eradicated to ensure that there is a smooth
operation of various activities (LaLonde and Pohlen 2016). The first strategy is to implement the
use of modern technologies that will be able to adequately determine quite a several situations
that are related to demand forecasts. Moreover, the top management officials of the company
should be able to work closely with both the employees and the customers to enable easier
identification of some of the areas where problems might arise at an early stage thus coming up
with quite several relevant recommendations.
Elements of strategic sourcing process that is essential for the scaling up of AusCotton
There are quite several factors that are attached to the strategic sourcing process and known to
have the capability of taking Auscotton to the next level in terms of how it carries various
operations. Some of the major elements of strategic sourcing processes that I feel is appropriate
for the performance of AusCotton majorly include;
 Category profile analysis- This is an element of strategic sourcing process aimed towards
increasing most of the operations done by AusCotton by conducting certain activities

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related to spending review to determine various forms of labor categories together with
the number of suppliers engaged in multiple processes and how every buyer is impacted.
 Demand analysis- This will involve a perfect review of the current state of utilization
together with various market conditions known to be attached to different aspects of
demand in the immediate future. One of the primary objectives that is connected to this
element is to offer a comprehensive consideration of the optimal workforce for the entire
organization together with how to attain it in light to quite a several supplier
relationships.
 Analysis of supplier market- This is another element of strategic sourcing that is capable
of benefiting AusCotton where it will be performed to review some of the existing
suppliers together with the entire competitive landscape (Barney 2012). The output
associated with this analysis adequately provides an appropriate review of quite several
current contract requirements.
The main reason why I feel that the elements are top candidates is mere that they have the
capability of adequately dealing with different situations through various forms of analysis
that aims towards bringing a positive outcome.

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Analysis
Year 1 Year 2 year 3 year 4
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
The above data shows an adequate and reliable implementation of strategic sourcing
processes within AusCotton, when the entire organization puts much focus on how the
strategic sourcing processes are being implemented; there are higher chances of the entire
organization increasing its performance on a yearly basis. Moreover, in year one, the
strategic sourcing processes is likely to scale up the nature of the entire organization by a
total percentage of 50% at the local market platform. On the other hand, by the end of the
second year, the percentage is likely to shoot to 65%, making the entire company to start
concentrating fully on various international market platforms. By the end of the fourth year,
there is a high probability that the total operating percentage is likely to scale up to 93%, this
is when the organization will start to gain access to a wide variety of customers thus making
it much easier to fulfill their needs irrespective of the places where they are situated.

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product quality Time taken to reach
the market competition
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Stiff competition from various companies that produce goods of the same products is the
major global issue that highly affects the entire area of strategic sourcing with a total
percentage of 92%. This therefore makes quite a number of operations to appear very
difficult to handle most so the ones that are known to be falling within the boundaries of
strategic sourcing. Moreover, product quality closely follows with a total percentage of 90%
thus showing how serious this major global issue is when it comes to altering most of the
operations within the organization most so the ones that aims towards meeting the needs of
all the customers within the stipulated time frame. Finally, the time taken for the goods to
reach the market affects the operations of the organization by around 80%, this provides the
top management team with one of the most difficult tasks as far as the achievement of the
company’s objectives are concerned. The major global issues should be well addressed
through an appropriate and reliable formulation of various recommendations that can be
easily put into practice. Additionally, these are issues that should always be minimized as

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much as possible since the have the capability of highly affecting quite a number of
parameters that are essential to the entire organization. Their effects can totally ruin the
reputation of the whole organization thereby scaling down its performance within the market
platform. Senior management team should always ensure that they are eradicated as much as
possible.
Responding to the assertion
The issue of various contract manufacturers being involved in producing illegal merchandise
that later on ends up providing a stiff competition with the branded merchandise attached to
AusCotton is something that should be solved according to the rules and regulations that are
put in place that aims towards avoiding the production of any illegal product within the
market platform. Due to this, anyone who is found doing that should be charged according to
what is entailed within the rules.
Recommendations
There needs to be an appropriate and reliable implementation of various strategies within the
organization that will help to eradicate quite several activities that tend to hinder various
operations from taking place. Moreover, to ensure that these strategies are working according
to what is expected, ethical considerations need to be considered thus creating boundaries
between what should be done and what should be avoided.

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References
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The relevance of resource‐based theory. Journal of supply chain management, 48(2),
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Croxton, K., Garcia-Dastugue, S., Lambert, D. and Rogers, D. (2016). The supply chain
management processes. The International Journal of Logistics Management, 12(2),
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Christopher, M. and Towill, D. (2016). Developing market specific supply chain strategies. The
international journal of logistics management, 13(1), pp.1-14.
LaLonde, B. and Pohlen, T. (2016). Issues in supply chain costing. The International Journal
of Logistics Management, 7(1), pp.1-12.
Mangan, J., Lalwani, C. and Lalwani, C. (2016). Global logistics and supply chain
management. 4th ed. New York: John Wiley & Sons.
Manuj, I. and Mentzer, J. (2016). Global supply chain risk management. Journal of business
logistics, 29(1), pp.133-155.

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Mason-Jones, R. and Towill, D. (2016). Using the information decoupling point to improve
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pp.13-26.
Min, S. and Mentzer, J. (2016). Developing and measuring supply chain management concepts.
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