business logistic systems

 

Aim

To understand the complexities and importance of suppliers for large manufacturing companies requiring 3PL logistics, outsourcing and joint-ventures.

Requirement

A report discussing the differing opinions working with suppliers and third party logistics providers (3PLs), manufacturing, outsourcing and strategic decisions.

You must correctly cite all of your sources

 brief summary/conclusion.

 

 

 

 

 

Que Corporation

 

 

It had not been a good week at the Que Corporation. What should have been lauded as an opportunity for success was fast turning into a negative experience. It would appear that the desire to increase sales and reach new foreign markets was in fact more difficult than anticipated, even though sales figures were on the increase. With a steady increase in gross sales, it seemed like Que had outgrown its productions capabilities. While customers expected faster deliveries, Que had experienced difficulties in meeting its customers’ expectations in terms of product delivery. The impact reached back all the way to Que’s own suppliers. While the marketing and sales department had made promises for future deliveries, the purchasing staff at Que had not met with the same success in sourcing additional suppliers. Despite the purchasing department’s best efforts, current suppliers were unable to meet increased production requirements, and new suppliers were having difficulties in obtaining consistent results in terms of quality, volume or timely delivery. Que needs to resolve this issue quickly since a meeting to discuss plans for expansion in Africa with an important consortium was scheduled in three weeks.

 

Que Corporation

With its headquarters in Brisbane, Queensland, Que is a medium size company involved in the manufacturing of industrial products used in the exploitation of mineral resources. From its humble origins in the mid­60s, Que had grown slowly but steadily in the domestic mining and resource exploration industry. Sales are currently at $30m, up from $18m three years ago. Over the last two years, sales have increased by 40% overall ($6m in the last year).

Que was founded by two mining engineers who were always tinkering and improving equipment used in their own exploration company in Australia’s North. The company had enjoyed a growing business due primarily to the sale and service of its products, used for the most part by small to medium scale domestic mining operations. Doug Wilkinson, one of the founding engineers, had remained as the president of Que despite being past normal retirement age. Doug simply enjoyed the work associated with resolving complex technical challenges, whether for a single customer or for a broader clientele.

Que’s products are sold to a wide range of customers on an international scale and ranged from small specialized mechanical or pneumatic equipment to unique drilling products and processing equipment.

While not considered a serious threat by large scale suppliers of similar products, Que had built its business in part on its good reputation for being able to combine a well engineered product, reliable after­sales service, and overall good value to the smaller producers. With the high investment risks involved in the mining industry, owners and managers were willing to compromise on using a smaller scale supplier for a moderately priced product with overall good reliability.

Part of its success, according to its client, as well as its internal focus group, was that Que had a small but innovative Research and Development (R&D) group which was involved in improving the reliability of existing products, while also seeking ways to innovate and add to the product line based upon market research and customer feedback. R&D was also usually able to work well with customers to resolve any technical challenges through its engineering capability. In turn, the purchasing department had enjoyed contributing to R&D’s effort through early collaboration on resolving new challenges, whether driven by customers or Que’s own marketing efforts.

In particular, the R&D group had been crucial in the development of the Q­10SD, a multipurpose sensing device that allows operators to monitor the environment for hazardous substances in the exploration area. Aside from being compact, the unit is self-propelled and can be operated by remote.

Over 20% of Que sales are for the Q­10SD or its components. Given the nature of this product and its competitive advantage, Que has been extremely protective about the technology used to develop and fabricate the Q­10SD.

 

Purchasing at Que

Under the supervision of Ken Davis, the four person purchasing department prided itself on being able to effectively investigate potential suppliers that were a good “fit” to Que’ss corporate strategy. Typically, Que was looking for suppliers of components or sub­components that could provide a quality product while not being involved in the final assembly, or linked to the mining industry. Que felt that keeping its suppliers at arms length provided a degree of comfort and trust. Since Que invested engineering resources in product improvement and development, it did not want to lose its competitive advantage if one of its suppliers had sufficient technical data to manufacture the entire assembly and turn into a competitor, particularly in the case of the Q­10SD. Instead, Que’s strategy consisted of keeping its suppliers in a partitioned way where, at times, the suppliers did not always know the final product once assembled by Que.

From manufacturing its own components in the early days, Que was now able to source its components globally, not based on quantity as much as the value provided by its suppliers. In fact, Que’s purchasing staff had been able to locate small but capable suppliers in less travelled paths on several occasions. Its International suppliers were primarily from Asian countries, with some specialty engineering products from Europe. Normally, a few key individuals from Que would first investigate potential suppliers during an overseas visit. They would be ranked along several criteria including quality, service, capability, and overall “fit” with Que. However, price would remain the overall criterion, particularly in a relatively competitive market. As business has been increasing, the risk of competition has also meant that Que has continued to investigate potential sources to reduce its cost and remain in a competitive situation. Although not in financial difficulties, Que could not afford to ignore any opportunity to reduce its costs while meeting or even improving its already acceptable service level. In the last few years, however, it seemed that Ken and his staff had not been able to visit existing suppliers and remain current with other potential suppliers. The workload simply had kept all four of the purchasing staff too busy to travel and investigate other opportunities.

 

Suppliers

Que preferred small-scale manufacturers, as opposed to themselves being a smaller entity having to negotiate with a larger supplier who may not offer the flexibility needed, or share the same philosophy regarding customer service. By establishing good relationships with smaller suppliers, Que felt that it held a certain degree of control over their output. These controls were seen as positive, more akin to a mutual dependency, compared with other forms of control sometimes associated with supplier client relationships. Que needed the small suppliers for their craftsmanship and the flexibility available in a small enterprise, while the suppliers needed Que to provide a steady demand. The craftsmanship of these suppliers, whether in their ability to use lathe or machine intricate parts, gave the end product a certain customized look without necessarily being unaffordable.

However, for all of their advantages, these smaller suppliers did not have the degree of flexibility needed in one area in particular, that of surge capability. Many of them were unable to cope with large volumes and several were already operating at full capacity with long, albeit predictable, lead times. In some instances, Que had found itself unable to meet some of the requirements identified by their customers for rush orders. Some of their suppliers were simply unable to take on additional work or expedite the manufacturing process due to their own manufacturing limitations. Therefore, once lead times were established, it was very difficult to change a due date to an earlier timeline. Que’s management reasoned that given the customized nature of some of the work, it was a reasonable compromise. Since most of their own customers were aware of the strengths of Que’s products, the customers themselves would bear responsibility to identify requirements well in advance in order to meet their respective timelines.

 

Requirements Forecasting and Inventory

Normally, the requirements would be segregated in a number of categories. They would consist of new custom-made equipment, generic equipment with a potential use by several customers, and spare parts to service such equipment. Even though the products designed by Que enjoyed a good reputation for reliability, the nature of the equipment, operating environment and frequent transportation between various operating sites resulted in a demand for spare parts. While customers preferred to maintain the equipment at their sites for several operational reasons, the complexity of the equipment meant that, at times, equipment would be returned to Que for overhaul or, in some instances where the sensitive nature of the measurements required the utmost accuracy – re­calibration.

Instead of holding large volumes of inventory, Que’s management put more emphasis on establishing good working relationships with suppliers which included timely delivery akin to just­in­time. They resisted holding inventories and tying up capital, particularly when the purchasing staff at Que was able to order what was required to meet exacting production schedules on a smaller scale. After all, Michael Oxford, Vice­President Manufacturing, stated, “Why should we hold inventory of any kind when we can order, with a high degree of accuracy, the parts required to manufacture or assemble the products identified by our clients. This reduces our company’s exposure to obsolescence and problems associated with inventory control.” Providing that the sales or, more appropriately, their requirements from their suppliers remained stable, Que felt that it could manage this strategy. As such, there had not been any large effort on the part of the purchasing department to seek any new suppliers. While they were aware of the attempts by marketing staff to generate new business, specifically in Asia, no one had bothered to keep purchasing abreast of the rapid development and relative success in the Asian market. As far as the purchasing staff was concerned, they had been told to expect growth on several occasions in the past but the optimism on the part of marketing had always been exaggerated. Purchasing felt that slow but steady growth had been the traditional pattern in the past and, barring any unusual circumstances, that’s the way it would continue to be.

 

Technology

The use of IM/IT tools at Que differed according to the functions being performed. The technical department had the latest in software and R&D relied on automation in its design and testing. However, for the most part, the other departments used a basic network system. No specialised applications could be found in the purchasing department or the small warehouse. Communication, including the submission of purchase orders or inquiries to suppliers, consisted of emails with the applicable attachment (Excel, Word, PowerPoint or JPEG) as necessary. In fact, inventory control was performed using an Excel spreadsheet. Even though the software required manual input every time inventory changed, it seemed adequate from the management’s perspective. The only difficulty encountered seemed to be the time required to verify the data before replying to inquiries from customer service personnel on behalf of customers tracking the status of their order. The IM/IT tools were deemed adequate from a production perspective, particularly given the relatively low volumes. Everyone, it seems, trusted that the purchasing department had the ability to get the materials and components in relatively good time from its current suppliers. Therefore, it was assumed inventory could be kept to a bare minimum and, as such, there was no need to invest in highly specialised software when Que had sufficient capability with the current IM/IT tools. Besides, procurement and training costs for a complex warehouse management system were not included in the budget.

 

Customer Service

Customer service played a key role at Que. From the initial inquiry on a product’s availability or a solution to a customer’s problem, all the way to the completion of an order (whether a new item or a spare part for a product in use at a customer location), Que had acquired a great reputation for its personalized customer service. Customers appreciated the level of information and follow-up provided by the small but knowledgeable and courteous staff at Que’s main location in Brisbane. Customers could always count on being treated fairly and kept informed on the status of their orders, at any stage of the transaction process. Que’s customer service personnel had been selected from a number of departments within Que for their knowledge of the company’s workings, as much as that of the products themselves.

Up to now, the three customer service representatives enjoyed the rapport they had with the customers and realized the important role they played in representing the company on a daily basis with clients and potential clients. However, over the past six months they were growing uncomfortable with the number of complaints received from clients as a result of late deliveries. Despite a near perfect track record on order fulfilment, some of Que’s suppliers were beginning to slip on their delivery dates. To further compound the problem, new clients from the Asian account were experiencing delays ranging from belated responses on order confirmation to late deliveries of finished products.

Upon an informal investigation of the potential causes for these difficulties, a number of reasons were identified. These included delays experienced by suppliers in responding to additional quotes for work, delays caused by insufficient inventory at Que’s assembly facilities, lack of the spares necessary to respond to service requirements, and the impact of transportation and customs delays in shipping products to the Asian market. So far, these investigations had been conducted informally within the company. The customer service personnel knew that something should be done soon or Que’s image would be adversely affected. Given their position and role, they felt that they should further investigate in order to resolve the situation, or at least identify some long-term solutions. They also wanted to get other groups within Que to do their part and take accountability for their actions.

In discussion with some of the purchasing staff, it was apparent that the matter was affecting the purchasing department’s relations with suppliers and that the marketing staff was also putting a certain amount of pressure on Purchasing to resolve the situation. In fact, much to the purchasing department’s displeasure, they had learned that on more than one occasion the marketing staff had contacted a few suppliers directly to inquire about the status of specific orders. The matter had been brought up directly to Bill Harris, the Regional Marketing Manager for Asia, who quickly dismissed it as an overzealous effort on his part to provide the information back to an important account.

 

International Sales

While Que has been relatively successful in the Australian market, it had recently expanded its international sales following the use of its equipment by Australian companies operating abroad. As a result, Que has been experiencing growth in a number of regions, most notably in Asia. After years of trying to grow the business, Que had finally gotten the break for which it had hoped. This had evolved after Australian engineers working abroad had been able to call upon some of Que’s products to complete smaller scale ­projects. In turn, the reputation for Que’s products had widened to a broader circle to a point where product inquiries from Asia had been received in Australia.

Que had also participated in trade fairs in China and India. Some of the visits had been facilitated by Export Development Australia (EDA) in association with the Department of Foreign Affairs and Trade (DFAT). The prestige of both organisations brought credibility to the efforts made by Que and it identified them as a bona fide supplier to the Asian market, as opposed to an opportunistic supplier without a distinctive product. In both areas, the number of inquiries for products had risen considerably following the fairs and a modest amount of sales was achieved. As the customers developed respect for the quality of the equipment, it generated additional inquiries for custom-made equipment. International sales volume at Que had grown to 40% of total sales with the bulk of the sales occurring in Asia.

 

De Oro Pty Ltd

One of the key factors in Que’s success was their newly developed relationship with De Oro Pty Ltd a major exploration and exploitation company operating in several Asian and South-East Asian countries. Primarily in the resources sector, De Oro operated initially in China and the Philippines. After being exposed to Que’s products at one of its mining sites in northern China, a number of engineers from De Oro had indicated a preference for a limited number of standard products offered by Que. As the sales and support continued to increase, De Oro’s engineers also became aware of Que’s capability in custom work.

Despite having an internal fabrication capability, albeit of limited production, De Oro’s management did not oppose an increase in trade with an Australian supplier. In fact, De Oro expressed a particular interest in the Q­10SD and discussion about this product became a topic of conversation on frequent occasions. Aside from the Q­10SD, Que eventually became involved with a number of products developed primarily for De Oro, but with the expectation that these same products could be offered to a number of clients in the Asian region.

Sensing an opportunity, Que’s management had conducted some research regarding Asian trade opportunities and perceived them to be worth pursuing. Despite some ups and downs, Que was able to increase its sales in the Asian market, in particular with a strong marketing effort characterised by frequent sales visits by Bill Harris, the Regional Marketing Manager for Asia. Despite some early difficulties with the peculiar ways of negotiating deals in Asia, Bill had surmounted the cultural barriers and established a good working relationship with several customers. He had even attempted to learn Chinese, if only to entertain his clients since most of them were able to communicate sufficiently in English to discuss requirements. As time progressed, Bill became a frequent sight around De Oro attempting to drum up business. In turn, De Oro invited him to several social events, events that Bill saw as an opportunity to strengthen the bonds with what could be an important client over the long term. As well, Bill reasoned, he could develop leads for several other potential clients by attending the social functions sponsored by De Oro.

By having a substantial sales volume with a known Chinese company like De Oro, Que’s management anticipated that its products would become more widely accepted and stand a better chance against the competition. While there was a small amount of domestic fabrication, the Asian market was predominantly serviced by international suppliers, with the United States, Western Europe and Russia being the preferred sources. Once again, Que counted on its combination of medium size, customer service and flexibility as key advantages as opposed to its competition, particularly when most of the Asian market was small to medium companies with insufficient clout to leverage large suppliers.

A particular and strategic aspect of the relationship discovered by Que’s marketing manager was the strong potential for growth on the part of De Oro. Despite its limited scope of operations in the past, De Oro had been successful in obtaining a number of leases and concessions in several south-east Asian countries, including Indonesia, the Philippines, Malaysia, Thailand, Vietnam and Taiwan. Further negotiations were underway with Chinese and Korean authorities for the exploration of additional sites. Therefore, Bill Harris had argued, the success and requirements of De Oro could significantly affect the sale of Que’s products.

While Bill’s compensation and benefits package included a commission of 2% on sales, he insisted that the benefits to Que would far outweigh his meagre personal gain. In addition, the relationship with De Oro had yielded other benefits, such as a reduction of the bureaucratic red tape encountered in each country. As Que’s management had soon realised, the procedures for selling, distributing and importing goods were different in each country. In fact, they varied between each district within each country and at times, or so it appeared to Bill, between each government official. Loathe to openly calling it bribery or corruption by low-level officials, Bill preferred to refer to it as sericultural differences. Besides, his new clients had assisted more than once with the completion of import control documents, including a number of times on behalf of Que for the benefit of a third party.

Given the relatively low volume of sales in the past, Que had opted for the use of local agents to clear customs. A lack of knowledge of the local practices had slowed the delivery of products on more than one occasion. Although it had expected these difficulties to be resolved in due course, the range of interpretations and application of policies for each shipment revealed that Que would not easily resolve this issue, at least not without the assistance of a few key individuals at De Oro. Que also recognised that a lack of knowledge within the shipping department was responsible for some of the administrative delays encountered with some of the shipments. While they were familiar with the procedures and regulations for domestic transportation and shipment to Australia, the requirements called for by each Asian country differed significantly and was further compounded by the use of different languages and the interpretation of terminology by respective customs officers. Despite all of the above difficulties and, for unknown reasons, it seemed that De Oro’s management went out of their way at times to assist Que, perhaps much more than required in a normal client supplier relationship. However, Bill simply dismissed the amount of help and interest as a cultural difference, particularly when it seemed advantageous for Que to receive the assistance in the first place.

In the early trade discussions that had occurred during the sales visits made by Bill, De Oro’s management had originally expressed concerns about the lack of local support offered by Que. They worried that without a local representative, the logistics pipeline between Asia and Australia would be fairly extended, particularly when a quick response was required in order to keep key equipment operating.

Quite simply, shipping a product from Australia to Asia was not as easy as a domestic shipment between two Australian points or even between Australia and New Zealand. The minimal level of inventory held in Australia and the reliance on Asian suppliers was a further concern to De Oro’s management.

At one point, De Oro had proposed to become a partner and act as a representative for Que’s products in the emerging Asian market. This offer had been rejected in light of the promising but so far relatively low sales. Finally, after strong guarantees on the part of Bill that Que would be able to deliver the same high level of service as had been enjoyed by other customers, De Oro’s management had agreed to adopt a wait­and­see attitude and react accordingly when a situation arose.

Over the next few months, sales activity with De Oro went up and, despite a few problems, Bill had been able to appease De Oro. Soon, rumours circulated about a soon to be approved project at the Bac Lu district in southern Vietnam.  Governments in south-east Asia had been looking at ways to improve the economic development of the region through foreign investments in basic industries.

However, in order to keep a degree of control, legislation decreed that a 50% share of the project had to remain under domestic control. This was meant to balance the national interest while offering attractive terms to foreign interest groups, particularly after the surge of nationalisation that had occurred during civil wars in the region. Despite the best of intentions, nationalised companies had simply not been able to operate mines economically and, as a result, several projects had been shut down. With many mines in various states of disrepair and lacking modern technology, a resurgence of the mining industry could only be supported through a combination of high technology and low operating cost, particularly when the output of mines was traded on the open market.

Rumours abounded that De Oro, with its sister companies, was in a good position to be awarded the right of exploration and, if the ore deposits proved to be sufficient, the exploitation rights for a 25­year period.

Should De Oro be awarded the rights to the Vietnamese project, its suppliers could certainly count on an increase in sales for a variety of equipment. Furthermore, those suppliers willing to reach a strategic alliance for an extended period of time would be guaranteed, not only the business related to this new project, but the potential to grow with the opening of other projects in the entire region.

Just as additional sales were being negotiated, Que’s inability to meet some deadlines for established as well as new clients raised questions. While senior management at Que was becoming aware of the extent of the problem, some internal pressures were also being felt. The situation worsened when the marketing staff escalated their complaints about potential loss of sales if Que was unable to deliver an important order to a new customer. They argued that it had been very difficult to land the account with De Oro and future sales in the geographical area could depend on their ability to meet this commitment.

 

 

Bill’s Proposal

In an effort to assist the purchasing department, it appears that Bill Harris had discovered a way to help Que and the customer at the same time. De Oro had approached Bill about a creative solution that would assist Que, while at the same time change the current client­supplier relationship between Que and De Oro. Bill was proposing that De Oro arrange for one of its subsidiaries or partners to manufacture and provide the components required by Que. This type of exchange could be arranged under a reciprocal agreement, where the value of goods received from De Oro would be deducted from the overall order for finished products placed by De Oro. As an alternative, De Oro could simply become a supplier to Que regardless of its own requirements obtained from Que. In an attempt to demonstrate De Oro’s experience in small­scale manufacturing, Bill had argued that De Oro used to have its own in­house manufacturing capability. Despite a greater reliance on Que, De Oro had kept a limited internal manufacturing capability, particularly during the early stages of their relationship, preferring to have a backup plan in the event of delays in the delivery of Que’s products. Bill admitted that while it was not the most advanced manufacturing plant, perhaps Que’s own personnel could identify deficiencies, recommend solutions and even establish a training program for De Oro’s personnel. This way, Bill believed that both Que’s technical and purchasing departments could keep an eye on the work being produced or assembled by De Oro. He believed that this would be beneficial to Que, particularly when the labour costs in Asia were low compared to Australia and some of Que’s current suppliers.

Davis and the rest of Que’s purchasing staff were concerned about this kind of proposal. Aside from knowing very little about De Oro’s manufacturing capability, they were concerned about the interest and creativity demonstrated by De Oro and Bill Harris, particularly since this proposal was made without them being forewarned. Furthermore, the purchasing staff was concerned about protecting certain proprietary information or “trade secrets”. Right or wrong, they argued that compared to their current international suppliers who are not involved in the use of the products, obtaining goods from a potential competitor with access and knowledge of the region was of concern to them.

In light of the potential increase in sales and the maximum capability of Que’s current suppliers, some compromises were going to have to be made, particularly when the benefits of having a local manufacturer fulfil the role of supplier in the new market would also include a reduction in the workload and costs associated with transportation and customs. After all, why have components manufactured in Asia, shipped to Australia for assembly and testing then shipped back to Asia, when a limited number of components manufactured in Asia and Australia could be shipped to Asia for final assembly and distribution. This way, inventory could be kept to a minimum and manufacturing and assembly could occur on a local/JIT basis.

For all of Que’s apparent growth, particularly in Asia, there was reluctance on the part of management to significantly increase inventory for finished goods. Again, the ad hoc nature of customer requirements appeared too widely distributed, and some felt that unless one or more of every product was carried in inventory, it would be a hit and miss type decision. Rather than invest in inventory, Michael Oxford (VP, Manufacturing) preferred to rely on the purchasing department’s ability to obtain support directly from the suppliers.

This same type of informal policy was also prevalent with regards to establishing some level of inventory, deployed closer to the client. Michael had not really considered the establishment of a small distribution centre with some finished products and spares held in a foreign country. After all, he once expressed, “if we are not willing to take this risk here, why should we do it abroad?” Again the apparent nature of custom work performed in the past appeared to support his stance. There would be costs associated with this type of decision: inventory, facilities, staff, and operations costs. Moreover, Que would be required to pay duties for the entire inventory in the country of import when the product may have to be re­exported to a third country. Given a clear lack of expertise and their recent experience with the interpretation of policies by customs officials in at least two countries, Que’s management was reluctant to proceed with the establishment of a remote facility. Besides, in which country should this distribution centre be located when there were so many options? Que had never had to worry about a distribution centre of any kind with the exception of its own plant that fulfilled both functions concurrently. Up till now, they had been able to satisfactorily meet customer requirements from the Brisbane location. Besides, would a distribution centre be sufficient or should they open a full office with sales capabilities? Certainly, this aspect of international trade was something that required further deliberations. Que did not need to be concerned about this aspect when the sales were relatively small and within a domestic market. The increase in sales, product range and geographic coverage brought additional challenges, not to mention the difficulties in locating reliable suppliers who could meet the ever-increasing demand. Certainly, this would need to be evaluated further if Que was to sustain recent growth, particularly in light of the upcoming meeting.

 

 

 

 

 

REQUIRED:

As Ken Davis, Purchasing and Procurement Manager, prepare a report addressed to Doug Wilkinson, President, dealing with the identification and analysis of alternatives available to Que Corporation.

Include in the report your recommendation(s) together with an implementation and maintenance plan.

The following is a guide to the structure:

1. 1.      Immediate Issue
2. 2.      Basic Issues

Just give a list

1. 3.      Strategic Perspective:

Give a summary of Que’s strategic potential to solve the problems and issues

1. 4.      Issues Analyses

These will be an expansion of the list from 2

1. 5.      Alternatives or Options

a)      Status Quo

b)      Accept De Oro’s proposal to manufacture and distribute in Asia

            Give pros and cons

c)      Accept De Oro ’s proposal with changes

Give pros and cons

d)     Investigate additional suppliers in Asia in line with current practice

Give pros and cons

e)      Reorganise Que to align its corporate structure with the chosen Corporate Strategy of Geographic Diversification

Give pros and cons

f)       Pursue the African Market Opportunities

Give pros and cons

g)      Combination of some of the above alternatives

Give pros and cons

You will need to provide a good discussion for the above alternatives or options.

 

Assumptions

Assume that Que will outsource/procure up to 50% of its gross sales and that the Q­10SD item will be a significant percentage of the total sales.

Also assume that an increase in the transportation budget and inventory should be forecasted given the elongated supply chain.

This case is not meant to prove accounting capabilities but rather examine the complexities of going global. The planning requirements associated with strategic decision-making are at the forefront. The impact on a company may range from scalability of existing core processes to a complete re­engineering within the company.

 

 

1. 6.      Provide a Final Recommendation and Implementation

Note that the final selected course of action must be related with the immediate issue and the involvement of certain senior personnel.

Things to consider:

1. 1.      Will the steps ensure long-term resolution?
2. 2.      Will the steps avoid a recurrence of the prevailing situation in other areas of procurement at Que?
3. 3.      Will the steps inform management of potential problem areas before they manifest suddenly?
   1. 7.      Monitor and Control

Will the recommendations ensure the required solution(s)?

 

Synopsis of the task and its context

You will, as an individual, engage in a series of logistics management activities. You will be presented with a hypothetical scenario consisting of a list of requirements. You will be asked to analyse and comment on the immediate and basic issues, analyse the situation and provide a recommendation or recommendations.

Your assignment is to be presented as a business report.

 

Match between learning outcomes and criteria for the task

 

Unit learning outcomes	Task specific criteria
On successful completion of this unit, you will be able to:	On successful completion of this task, you will be able to:
Have an understanding of the theories of inventory and warehouse management, procurement and customer service 1.     Understand inventory, warehouse, customers service management Be aware of decision strategies in transportation, inventory management and warehouse management 2.     Make informed decisions regarding transportation, inventory and warehouse management Have an understanding of the range of skills and knowledge required for IS logistics management 3.     Identify issues and problems in logistics operations and react to changing circumstances