To convince senior management to re-source electronic assemblies, the supply manager should present a global business case. This approach considers the international market dynamics and highlights the competitive disadvantage of continuing with a supplier that has quality issues and lacks technological advancements. Presenting a value analysis (A), performing an on-site quality assessment (C), or starting the strategic sourcing process (D) are useful steps but might not be as compelling initially as a comprehensive business case. References: Strategic sourcing best practices, supplier evaluation criteria, global market analysis in procurement.

* Cost Savings Reporting: Accurate cost savings reporting is essential for demonstrating the value that supply management brings to the organization.
* Alignment on Definitions: When the executive team and internal stakeholders are aligned on the definitions of cost savings, it ensures that the reported savings are understood and accepted across the organization.
* Value Demonstration: This alignment shows that supply management is effectively contributing to the
* company's financial performance and strategic goals.
* Other Considerations: While auditability, baseline adjustments, and risk management are important, the primary reason for alignment is to clearly demonstrate the value added by supply management.
References
* ISM Professional Series: Cost Management
* CIPS Knowledge on Financial Management in Procurement

A firm fixed price (FFP) contract is an agreement where the buyer agrees to pay a specified price when the items or services have been delivered and accepted. This type of contract provides certainty in pricing for both the buyer and the supplier, ensuring that the supplier bears the risk of cost overruns. Incentive contracts (Option A) provide additional payments based on performance, fixed price incentive (Option B) includes some flexibility in final costs, and cost contracts (Option D) reimburse the supplier for allowable costs plus a fee.
References:
* Types of Contracts in Supply Management
* Procurement and Contract Management Literature