The Blozis Company

Blozis Company

The supply manager for the Blozis Company; a manufacturer of highly technical equipment was deciding what recommendations he was going to make to the president in regards to how the company can improve the pitiable business management?

The Blozis Company, who grossed sales of $16 million, consisted primarily of units designed to customer’s specifications by the engineering department and produced on a job-shop basis by the production department. The engineering department also designed highly complex control equipment of general industrial applications to be sold by The Blozis Company on an off-the shelf basis.

The basic problems of the manufacturer are twofold; 1) that the supply department exhibits weak control over the materials 2) overall supply management performance.

The supply department consisted of the supply manager, who had no technical training. A buyer who was considered a competent “general supplies buyer”, and was only able to purchase technical items if the detailed specifications were supplied by engineering; plus two clerks, who handled filing and typing.

An expediter, who was formerly one of the technicians in the production shop, was attached to production.

Frequent problems had arisen when suppliers claimed long overdue payments on materials. In these cases it always developed that someone had forgotten to make up a receiving report. This caused the company to miss out on sizable discounts due to late payments. The lack of accountability for material coming in also caused headaches for the company.

Currently, the expediter periodically typed up purchase orders for rush items. In other cases, he picked up the item directly from the supplier and informed them that they would be receiving confirmation of the order from the supply department. When the expeditor forgot to ask supply department for a confirming order, the supply department occasionally was distressed processing invoices for which they had no...