Arden Foods Case

ARDEN FOODS, INC.

Bill Jones, purchase analyst in the corporate purchasing office at Arden Foods, was in the

Process of reviewing corrugated cartons purchases. He had gathered statistics on purchases

From each plant and it was apparent that one supplier, Sartex, Inc., had managed to

Increase its share of total carton business dramatically over the past 20 years.

COMPANY BACKGROUND

Primarily a meat packer and producer of quality foods, Arden Foods operated l3 major plants

Across the country, each of which was a profit center and autonomous within general

Corporate policy. Each plant had its own production, sales, and administrative staff and did

almost all of its own purchasing. Total sales last year were close to $2.5 billion.

CORPORATE PURCHASING

The corporate purchasing staff had traditionally been very small at Arden Foods, consisting

of a manager, a buyer, and two secretaries. This staff was largely occupied with statistical

Work and did some contract purchasing, only of brand items common to all plants. The

Corporate manager of purchasing reported to the vice president of finance. When the former

Manager retired a year ago, the new manager who took over believed a more aggressive

stance for corporate purchasing was appropriate. One of his first moves was to visit all

Plant purchasing agents for a duration of two days. The plant purchasing agents pointed

out that the statistics traditionally kept at head office were primarily of interest to the

finance people, but were not particularly useful to them. As a result, Bill Jones, a recent

college graduate who had specialized in purchasing and materials management, was

“borrowed” by corporate purchasing from the largest plant’s purchasing office. His job was to

See if he could not only help develop more meaningful statistics, but also to investigate

if corporate purchasing could provide better services to the plant locations....