Unifine Richardson Manufactures Salad Dressing

1. Unifine Richardson manufactures salad dressing, ice cream toppings, sauces and syrups on a three shift operation with 110 employees. Rob Pincombe is responsible for procurement of honey from its suppliers as a purchasing manager. Unifine purchases one million pounds of honey annually which represents 3-5% of their total expenditure. All of the honey is purchased for 1.08$ per pound which is a 50:50 mixture of Chinese and Canadian blend. Eighty percent of sales were to on large franchise for cost plus %15 and the rest was used in-house. CFIA modifying importing regulations for Pre-packaged and bulk honey from Greece, China and Argentina to look for contamination caused a huge problem for Unifine Richardon. All the honey coming in from China and Greece would be inventoried and detained until lab results which would take 20 days. Unifine single sourcing strategy put them at a huge risk as now Unifine is not in a position to bargain price. Unifine needs to find the best alternative for a consistent supply as importing from China was not an option due to cross contamination and regulations.

Here is a list of some of the immediate issues

• Honey supply reduced by 20% in the world market

• Government regulations and CFIA suspending supply from any country

• No buyer influence on price in the Honey market

• Chinese supply can take at least 15 months after getting rid of inventory

• Honey is used in a lot Unifine products

• Main supplier requires quality product and sales at risk

• UDS to CAD is $1.63

• Only have one day to decide and act on it.

2. The three options that are available to us are:

• 100% Canadian honey is available at $1.75 per pound.

• 100% U.S honey is available at $1.10 USD per pound

• 50-50 Canadian – Argentinian honey is available at $1.42 per pound.

50-50 Canadian – Argentinian honey does not meet ours and our main customer’s quality standards. Due to fluctuation in USD and the exchange rate from USD to CAD it was cheaper and safer to buy Canadian honey.

It is clear that our best option is to buy Canadian honey and since the price of honey is rising we should start a contract and lock the price in for a year. We should continuously work with Harrington and maintain a good relationship to secure a steady supply and build our supply chain strategy.

3. Some of the steps we can take to maintain a good relationship with Harrington would be:

• Always