Enzos Concerns Enzo was aware that restructuring the supply base could have detrimental effects if not managed correctly. Simply going for the cheapest suppliers around the world was not a viable alternative as there were many other factors to consider, such as quality, capacity, product development capability and respect for ethical standards. His team had been working for years with some of the suppliers to develop their capabilities and he feared changes to the supply base could waste all this hard work, destroy trust with the suppliers and expose the company to risks. One particular concern for Enzo was the issue of ethical sourcing. He knew the CEO was very sensitive about this and the company had a very clear ethical policy that emphasized business should be conducted honestly, fairly and with respect for people, their dignity and their rights. Altimus also participated in the Ethical Trading Initiative (ETI) and subscribed to its nine principles (see (' Exhibit 3). To ensure these principles were respected, the company conducted its own reviews of the suppliers and worked with them to resolve any issues that arose. This meant that any ethical infringements by suppliers were unlikely to be picked up by the media or press. EXHIBIT3 Principles of the ETI base code. 1. Employment is freely chosen. 2. Freedom of association and the right to collective bargaining are respected. 3. Working conditions are safe and hygienic. Enzos Recommendation Enzo knew a recommendation would be required for the board meeting at the end of the month. Reducing costs was a major consideration, but his dilemma was how to reduce the cost of supplies without exposing the supply chain to major disruptions and risks. The meeting with his team provided him with most of the information required to prepare a recommendation for the board, but he was still pondering about the right balance between costs and risks. 

Questions 

1. Why is this company a supply chain integrator rather than a manufacturer? What are the resulting advantages and disadvantages? 

2. Evaluate the costs and risks of the four suppliers. Do this subjectively and also develop a weighted scoring model to evaluate costs and risks. 

3. Which supplier(s) do you recommend to meet their demand requirements and why? 

4. How should the suppliers be monitored during the year regarding ethics, quality, on time delivery and other criteria?