Blc303 Supply Chain Management: Assessment Answer

Task:

The GHTB group is engaged in financial services and has banking, insurance and building society interests. There is a new CEO of the group who has moved into the position from an international manufacturing organization. She has engaged the services of strategic consultancy group to study the way in which  purchasing operates in GHTB group. Having received its report she is surprised at the finding. In summary they include the following points:

•Each part of the organization is empowered to create contract with suppliers – there is no strategy or coordination

•The banking and insurance arms of the business have purchasing managers whereas the building society employs a Chief Buyer

•There are over 15,000 suppliers to the organization, but no expenditure analysis is available

•In the past year there were 50,000 purchase orders placed with suppliers, 40 per cent after receipt of an invoice

•In each part of the organization, many departments and individuals have authority to place contract without the involvement of purchasing , including marketing, information and communications technology (ICT), travel, printing, warehousing and legal affairs.

•The group training director has no budget for training the purchasing staff and has never conducted a training needs analysis

•There are, currently, four major disputes with suppliers relating to infringement of intellectual property rights, breach of contracts for not taking agreed quantities of printing, late installation of an IT system and theft of goods from third party leased warehouse

•There is no cost reduction target, supplier rationalization or relationship management strategy in any part of the organization.

•The banking group is about to engage in a corporate identity package involving $5 million of expenditure and the whole deal has been handled by the facilities management sections, together with external architects and quantity surveyors, who have handled the purchasing process and their fees are based on 6 per cent of expenditure

•There are no model contracts in any part of the group

The CEO realized that this style of purchasing operation is unacceptable and intends to change it materially. If you were asked to give advice on the way forward, what would be your thoughts?

Question 1

Would you create a group purchasing activity? Justify your answer.

Question 2

How would you persuade the marketing directors that purchasing can add value to their expenditure?

Question 3

What would you recommend regarding the disputes with suppliers?

Question 4

Would you take any action regarding the corporate identity package?

Part B Long Essay Questions

‘KHIND is the one of the best home appliances in Malaysian.’ Examine its supply chain based on Porter’s Five Forces model.

Question 1

‘Unilever defends the top position in Gartner's 2018 Supply Chain Top 25 for three years in a row’ by PHOENIX, Az., May 17, 2018

Use the resources available on the Internet to explain why Unilever topped the ranking.