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A software design firm has traditionally done most of its work in-house, including support services and distribution management. The firm is planning a large expansion, and is evaluating how the various departments can support It. The chief executive officer (CEO) recommends concentrating on core competencies to increase the firm's agility and emphasize what differentiates them from competitors. Which of the following is the BEST way supply management can support this recommendation?
Correct Answer: D
* Context: The firm is expanding and looking to concentrate on core competencies to increase agility and differentiate from competitors. * Core Competencies: These are the unique capabilities that give a firm a competitive advantage. * Supply Management's Role: To support the CEO's recommendation, supply management should focus on outsourcing non-core activities. This allows the firm to allocate more resources and focus on what they do best. * Outsourcing: By identifying non-core functions that can be outsourced, the firm can become more agile, reduce costs, and improve efficiency. * Evaluation: Conducting a spend analysis or developing better e-procurement processes are useful, but they don't directly address the CEO's strategy of focusing on core competencies. An organization-wide * strategic sourcing plan is broader and less focused on core vs. non-core activities. * Conclusion: The best way for supply management to support the recommendation is by identifying and outsourcing non-core business functions. References * Core Competency Theory by Prahalad and Hamel. * Strategic Management of Supply Chains by David Simchi-Levi. * Supply Chain Management: Strategy, Planning, and Operation by Sunil Chopra.