Case Study for Strategic Procuremet

Ans 1. There are issues of load and offloading due to which packaging is being damaged. There is a problem in the large volume returns from super markets due to change in seasons and the since the product becomes obsolete, it has to be lifted back to the WL plant and then it is of no use. Another issue that has been discussed in the case is shortage of 1kg and 3kg bags. The case also mentions that there is insufficient storage capacity at WL plant as compared to the demand that their business has. (Provided that company has an average demand of 15 tonnes per month and per day 0.5 ton demand and 43 days is the lead time from china to WL warehouse).

Possible solutions can be;

For 1kg and 3 kg bags, the fleet should be separate and 3kg bags should be loaded on the back side of vehicle before 1 kg bags. 1 kg bags need to be loaded after 3 kg bags on the side of doors. This would help loaders and off loaders to handle smaller quantity bags with care. Usually, it’s the small bags that are ruptured. Same has be replicated for 5kg bags and 10kg bags. This solution is feasible for super markets as they have bulk orders. For smaller orders of gardens and pet shops, bags should be packed again in cartons at a packing of 6 bags and 12 bags per carton (what may be more feasible) to avoid handling damages. Also, if a third party is used to send supplies, it can be made a part of contract that all damages will be borne by the carrier and not the company.

Ans 2.

For 1 kg and 3 kg bags shortages, super markets shelf depths and stock depths need to be reduced, since at the end of season, they return large quantities of obsolete product back to the company. The sales department needs to be taken into confidence. Stock depth should be reduced to half at super markets in the last 30 days of same season. This would help avoid stock shortages for other customers and returns from super markets.

Procurement and Production department should work in collaboration with sales in order...