Dawson's Food

The West coast city

Case study Report

Name: Vivek Raveendranath

SCMA Number: 7006866

Date: Feb 17th 2018

Table of contents:

1. Executive summary          ………………………………………………………3
2. Issue identification            ………………………………………………………4
3. Environmental and Root cause analysis………………………………………5
4. Alternatives………………………………………………………………………..7
5. Recommendations…………………………………………………………….....12
6. Implementation…………………………………………………………………….13
7. Monitor and control………………………………………………………………..15

Executive summary:

        The west coast city holds more than 7,500 employees and working with a yearly budget of $800 million. The total budget includes the procurement activities for the city library, police, fire and park board branches. Each of these branches has their own purchasing functions. There is no formal way of sharing their supplier information between the branches. some of the branches created buying groups and working on that periodically. The supply chain management staff directly involved with the spend of $300 million.

        The ethical and sustainable procurement policy task force created to implement the policy. The task force works with the representatives from all the branches. Implementing the new policy certainly makes some impact on the market right away. The decision is to implement the policy on the clothing and uniform supplies. The task force recognizes that the value of the goods is close only $1 million. After the successful implementation, the plan is to apply the policy in all the categories. It is important to analyze all the results implementing the policy.   Considering the high turnover of employees, implementing the new policy brings high amount of work load to the buyers. The manager needs to consider the cost increase to buy the sustainable products. The strategy needs to be formed to implement the policy without increasing the number of employees and cost.  The sustainability team consists of three members can help the suppliers to work on their strategy. The report contains the number of alternatives to implement the policy without a higher cost increase on the products and the number of employees.

Issue identification:

The major issues to implement the policy is discussed below,

1. Cost increase on the products/ services:

The suppliers want to increase the cost to provide the sustainable products/services. The procurement manager is highly concerned about increasing the budget.  Buying the clothes from a sweatshop-free company can increase the cost drastically. The buyers lack the expertise to find the suppliers with sustainability measurements.

1. Wrong Strategy chosen to implement the policy:

The current strategy to implement the policy has two Phases. The phase 1 to implement the policy on the clothing and the uniform supplies. The phase 2 is to implement the policy on all the other categories. Looking at the costing, the clothing supplies not consisting of much value in the total spend. This might be easier to implement considering the other categories. The category which is tougher should be chosen, to understand all the challenges in implementing.

1. Adding more employees to the team causing financial burden:

The current employees in the organization lacks the expertise to work on the sustainable policy. They need more time to learn and implement the process. Due to the heavy work load, this can cause huge impact on the current projects. Increasing the number of employees can cause huge fiscal restraints. The manager needs to find the better strategy to use the current employees and the sustainability strategy team effectively.

Environmental and Root cause analysis:

The west coast city is a well-developed one considering all the infrastructure aspects. The city is growing every day because of the arrival of the new immigrants. The sustainability market is growing, producing the recyclable products with very less carbon footprints in all the sectors. It is also mentioned that the sweat-free shops in the clothing industry is important criteria these days. The manufacturers need to get the certification from the third-party inspection providers. The stakeholders expect the city to spend their money wisely.

Tactical buying and repetitive contracts with the sole suppliers needs to be changed. The sustainability specialists need to be trained on the procurement policies. The specialists can help the potential suppliers to improve the sustainable capability. The current employees are lacking the expertise in the sustainability sector. There is high turnover ratio, the manager needs to hire the new buyers with the sustainability experience in the future. The buyers need more time to find the suppliers with the ethical and sustainability behaviors. The buyers can be trained by the sustainability specialists. But the high training cost is also a concern. The manager needs to find a way to spend very less money on implementing the process. The coffee costs the city $150,000 per year. Implementing the free-trade coffee has the potential to increase the cost by 20%. This will increase the yearly spend to $180,000. The city needs to spend $30,000 more per year. The same of kind impact will reflect in all the categories. The city needs to spend 10% more money on the categories. The manager should look to reduce the cost with the new supply chain strategy. The financial director is highly concerned about adding more staff to the team due to the fiscal restraints.

Add more experienced buyers in the team can also help them to reduce the cost. The manager needs to prove that the adding more staff brings more value to the organization in terms of pricing and negotiation.

SWOT ANALYSIS:

Alternatives:

1. Collaborative buying for common products and other categories:

All the branches working on the contracts individually. Adding all the branches like library, police, fire services and park board to collaborative buying. The costs can save 10 to 15 percent more on the high-volume contracts.