POST MODULE ASSIGNMENT (RESUBMISSION)
Procurement and Inventory Management
Your answer to this question should be between 4,000 and 5,000 wordsexcluding appendices.
You will have to choose TWO (2) questions out of the Questions 1-4 below.
Please answer each task in a separate section.
The questions are referring to a given case, which is explained below.
CASE “GREEN CHILLY”
The given case is a restaurant chain, which is an invented case but will have similarities to existing businesses. Facts that are not given can be taken from typical real world cases out of the industry.
The key facts are:
- The Company “GREEN CHILLY” (GC) is a restaurant chain operating in the UK. It runs several restaurants for takeaway meals and for people that will stop and sit down for lunch or during any other time of the day. They operate from 07:00am to 12:00pm Monday-Saturday, 10:00am-10:00pm Sundays.
- The special approach of this restaurant chain is that to a high extent they try and source healthy food from local suppliers – so pointing out their environmental responsibility that they use extensively in promotions and marketing activities. But as the company has evolved they historically use a lot of other products that are sourced by the central procurement organisation based in the West Midlands and distributed to the 53 restaurants.
- The company currently has 53 restaurants all over the UK in the major cities and towns. According to recent data; collectively they serve on average 16.000 sit down eat in meals every day. In addition to these; collectively they have approximately 23.000 customers stopping for smaller snacks and drinks which most are taken away to eat.
The restaurant chain is facing certain seasonality problems of staffing issues and over stocking of items due to the UK holiday seasons and the unusually variable weather conditions that is influencing customer preferences.
“Green Chilly” faces some issues due to their successful growth in recent years:
- There is no structured procurement process in place.
- There are significant issues for distribution and the company is considering outsourcing this to a 3PL or 4PL organisation.
- They have a issues of communication and information sharing as the company has grown they are linking old legacy IT systems and some restaurant managers believe they need a system that can monitor and control all point of sales, stock usage, sales and forecasting and costing data.
- Many restaurants are experiencing quality issues with some fresh products (e.g. salads, vegetables) due to different local supplier performances and have been identified as having an impact on each restaurant it affects; these are mainly in the more densely populated regions of the UK.
- Also referring to the above issue prices for some raw materials are becoming significantly above the UK average according to recent data collected by regional managers.
- Shortages of some promotion meals have been identified in many restaurants and as yet the reasons are unclear to the management team
- The company is a family owned business that until now has been run mainly by the head of the family who is approaching retirement and has indicted he wants to step aside and leave the running to his four children, three men and one woman each who have regional control as follows:-
- South East that covers London and surrounding areas Kings Lynn to Southampton.
- South West that covers from everything west of the previous area below a line between Luton and Aberystwyth in South Wales
- Midlands all above that line between Chester and Grimsby.
- North everything above that line to John O’Groats (see map below)
AVAILABLE QUESTIONS SELECT TWO (2) OUT OF THE FOUR (4) BELOW
1. Procurement Process
Considering the market GC is in and with the knowledge they do not have an overall procurement strategy develop a structure for the sourcing process fo the high usage food and non-food items that the company will be able to use for company-wide procurement process. You have to decide what processes are especially relevant for ‘production’ of meals (e.g. supplier selection, volume forecasting etc). and provide examples. Discuss which processes of the strategic procurement process you have developed would be more relevant for food and for non-food items such as; basic food stuffs for example sugar, rice, sauces, and then restaurant equipment, facility management. Use tools and methods we have discussed in the module and those you will find from your research to explain what you have done.
2. Supplier Selection.
Develop a decision making example for the selection of a supplier for one product category either food or non-food. Discuss the differences between monetary and non-monetary criteria and include this in your decision problem. Describe the steps of your process and discuss these in detail including risks; influences and external factors. Also describe how sensitive the process solution is against a changing supplier performance, both when they are improving and they are under performing.
3. Supplier Qualification
How could the company GC improve supplier co-operation and what would you consider as a program for supplier relationship management based on the facts in this case study. Thinking of the food business in general, what do you believe could be done by the restaurant chain owned by GC to qualify suppliers and create closer relations? Try to investigate and illustrate best practices e.g. from real life existing fast food chains operating in the UK.
4. Techniques and Improvements
Describe the merits, validity and risks associated with the following techniques with respect to the challenges facing the Green Chilly company and give examples where these methods would be used.
Vendor Managed Inventory
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Table of Contents
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1 Heading 1 – Suggested that you use this for each Question answered
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