Given this situation, which of the following is the BEST course of action for WXY’s supply management department to take?

For many years, WXY Company’s policy has been to buy only domestically manufactured MRO materials and maintain quantities of these materials at each operating location. A recent analysis reveals that this practice is not the most efficient and effective way for this firm to manage its MRO purchases.

Given this situation, which of the following is the BEST course of action for WXY’s supply management department to take?
A . Create a cross-functional team of stakeholders to determine future actions
B . Centralize its inventory into one location to reduce overall storage costs
C . Outsource the inventory fulfillment to a lower cost third party
D . Determine what supplier can deliver the best value, and contract with that supplier

View Answer

Answer: A

Explanation:

Forming a cross-functional team ensures diverse perspectives and expertise in decision-making, leading to well-rounded strategies for managing MRO materials more efficiently. It fosters collaboration and alignment across departments.

Reference: Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management.