Certification in Supplier Diversity Practice Exam

Which element is NOT part of a strategic supply plan?

1. Annual review of supply strategies

2. Supply performance benchmarks against the marketplace

3. Frequent changes to supplier agreements

4. Resource prioritization for beneficial strategies

The correct answer is: Frequent changes to supplier agreements

A strategic supply plan is designed to create a framework for managing suppliers in a way that aligns with overall business objectives, ensures efficiency, and fosters long-term partnerships. One key aspect of a strategic supply plan is stability; it focuses on setting clear goals, reviewing performance, and making strategic decisions that benefit the organization over time. The annual review of supply strategies is crucial, as it allows organizations to assess their procurement approach, make necessary adjustments, and ensure alignment with business objectives. This continuous improvement cycle is essential to adapt to market changes and optimize supplier relationships. Supply performance benchmarks against the marketplace provide valuable insights into how an organization’s suppliers stack up against competitors. This allows companies to identify strengths and weaknesses in their supply chain and make informed decisions about supplier performance, ultimately enhancing competitiveness. Resource prioritization for beneficial strategies ensures that the organization allocates its assets effectively to support the most promising initiatives. This helps maximize return on investment and maintain a focus on strategic goals. Frequent changes to supplier agreements, however, disrupt relationships and can create instability in the supply chain. Constantly renegotiating contracts may lead to dissatisfaction among suppliers, loss of trust, and potential disruptions in the supply process. A strategic supply plan should emphasize consistent and strategic supplier management rather than frequent alterations