Mini Case: Unifine Richardson

The situation Unifine Richardson (UR) encounters is the sudden loss of its major source of honey supply from China. Recent breakthrough in scientific development enables Canadian government raise bar in regulation on raw honey. Such change also exposes several immediate issues for Unifine Richardson to ponder on.

First of all, the sole Chinese honey source is no longer available, and the availability is uncertain. Inventory is going to depleted in about a month.

Secondly, eighty percent of firm’s sale comes from one major customer, which is risky if UR can no longer supply the state pro quo honey.

Thirdly, UR’s process of produce honey product lacks of value-added procedure.

Fourthly, the main supplier Horriton is not proactive in the incident, nor does it value-add the sourcing process as a supplier to UR.

Last but not least, the price of honey is going to soar due to the scarcity of honey, RU need to work out a deal with Horriton to maintain the price and quality of honey supply.

As the purchasing manager, I (Rob Pincombe) has three alternatives to consider.

Using 100% Canadian honey

Using 100% U.S. honey

Using 50-50 Canadian-Argentinean honey

Alternative 1:

Pros: Ensure the flavor consistence; not have to worry about the duty & anti-dumping fees associated with import; short leadtime, quality control and superior service associated with local vendors; less transportation cost.

Cons: Huge cost increase, hence price increase to customers

Alternative 2:

Pros: Relatively cost than pure Canadian honey; no duty & anti-dumping fees associated with import; relatively short leadtime, all benefits associated with local vendor might erode, however still can maintain some level; relatively low transportation cost.

Cons: Documentation of crossing the board; still cost increase, hence price increase pass on to customers.

Alternative 3:

Pros: Most cost efficient alternative of three due to its “blended” nature.

Cons: Documentation, inspection associated with...