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Strategic Supply Management by Robert Trent

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SOURCING GLOBALLY

In an attempt to regain some lost competitiveness, a U.S. producer of power tools decided to outsource its lower-end products to a contract manufacturer in Asia. This would allow the U.S. producer to focus on higher-margin products while still offering customers a full range of tools. Unfortunately, the Taiwanese company the U.S. firm contracted with did not seem to know when to turn off its production line. Like the Energizer bunny, the line kept going and going and going, so much so that the contract manufacturer really had no choice but to sell the extra inventory to other companies throughout Asia. The Taiwanese supplier ...

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