Why this decision matters
Almost every supply-chain disaster of the last decade — the chip shortage, the Suez blockage, the formula-recall, the post-pandemic shipping crunch — was a sourcing or logistics decision that looked cheap until the day it wasn't. This module is about making those decisions visible before they go wrong: scoring suppliers on more than price, sizing your buffers against risk, and matching transport modes to what actually matters.
By the end of this topic you'll be able to
Build a weighted supplier scorecard and defend the weights. Compute total cost of ownership, not just unit price. Identify the seven wastes (TIMWOOD) on a real shop floor. Choose between push and pull, lean and resilient, single-source and multi-source — and articulate the trade-off. Pick a site-selection method that fits the decision.
Materials
Key concepts to know
- Total cost of ownership (TCO) — unit price + freight + tariffs + quality cost + inventory + risk. The right basis for sourcing decisions.
- Supplier scorecards — weight cost, quality, delivery, risk; score each supplier; multiply and sum.
- Single vs. multi-sourcing — cost vs. resilience. Hurricane risk often flips the answer.
- Lean / JIT — receive material only when needed. Cuts inventory but raises supply-chain risk.
- Pull vs. push — production triggered by actual demand (pull, e.g. kanban) vs. forecast (push).
- The 7 wastes (TIMWOOD) — Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing, Defects.
- SMED — single-minute exchange of dies; reducing changeover time to enable smaller batches.
- Modes of transport — ocean, rail, truck, air, pipeline, parcel; cost ↓ vs. speed ↑.
- Site selection — factor-rating method, center-of-gravity for distribution centers, break-even by region.
- Bullwhip effect — small demand changes amplify upstream; lean information sharing dampens it.
Class notes & cheat sheets
- Operations Cheat HandbookZone 2 covers sourcing, lean, and logistics formulas.
- Operations Q&A WorkbookRetrieval-practice questions across the supply-chain chapters.
Hands-on activity — supplier scoring & site selection
Three Excel exercises that move from one supplier to many, then to a site decision. Start with Apple's single-supplier file, scale up to the 15-supplier scorecard, then close with the Panda Express location problem.
- Apple Supplier Start FileScore a single strategic supplier on a balanced rubric.
- 15-Supplier ScorecardReal shape: location, quality, cost, risk — with a hurricane bearing down.
- Panda Express — Site SelectionFactor-rating workbook for choosing the next store location.
- GreatLakes Delivery DataRouting dataset — pair with the Python notebook below for the optimization view.
Python notebooks (optional)
- Panda Express — Site Analysis NotebookPython walkthrough of the factor-rating method with a map.
- GreatLakes — Route OptimizationVisual route optimization on real lake-shore delivery routes.
- Bullwhip Effect SimulatorWatch a small retail demand wobble become an upstream shockwave.
Practice with games · Sourcing & supply chain
- Global Sourcing ReviewDrilling key concepts from Ch 16 in Q&A format.
- Supply Chain CommandMake sourcing, inventory, and capacity calls in tandem.
- Speed BlitzTimed retrieval across the supply-chain chapters.
- Battle RoyaleMulti-player-style review across Ch 14–16, 19–21.
Using AI on this decision
AI is genuinely useful for supplier risk: paste the supplier list with country, lead time, and capacity, then ask the model to flag concentration risk and propose a dual-source plan. It's also strong at translating raw shipping data into a TCO calculation. Where it struggles: weighing strategic factors (relationship, IP risk, geopolitics) — those still need you.
See the Prompt Engineering for OSCM guide for supplier-analysis prompt patterns, and the AI Lab Instructions for the supplier-scorecard hurricane scenario.