Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg

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Module 1 – Case

STRATEGIC PURCHASING MANAGEMENT

Assignment Overview

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Review the following article from Purchasing.com.

Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merger procurement integration. Retrieved Sept. 7, 2008, from Purchasing.com.

Also, review the following article:

Knutson, B., Rick, S., Wimmer, G. E., Prelec, D., & Loewenstein, G. (2007). Neural predictors of purchases. Neuron, 53(1), 147-56. doi:http://dx.doi.org/10.1016/j.neuron.2006.11.010

Case Assignment

Turn in a paper of one to two pages (page count does not include cover or reference list) and include the following components:

1.   Using the background material, how is corporate planning involved in the merger?

2.   Use SWOT to identify the strengths, weaknesses, opportunities, and threats for P&G.

Assignment Expectations

1.   Answer questions with clarity.

2.   Show depth and breadth in your paper to enhance the quality of your paper.

3.   Try your best to search in the Trident online library to find some papers/articles to support your argument and show them in the reference list.

4.   Turn in your answers by the module due date.

Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Module 3 – SLP PROVISIONING AND INVENTORY CONTROL Part 1 Relating to the organization you chose for Module 1, discuss: What are the methods of inventory control in the organization you chose? What is the cost of maintaining such an inventory? Part 2 Please locate and review the following article: Souiden, N., & Pons, F. (2009). Product recall crisis management: The impact on manufacturer’s image, consumer loyalty and purchase intention. The Journal of Product and Brand Management, 18(2), 106-114. doi:http://dx.doi.org/10.1108/10610420910949004 Please submit a 1-2 page critique of the article mentioned above. Please summarize the article and also state how the information can be applied by you.  Turn in your paper (Part 2) by the module due date. SLP Assignment Expectations Answer questions with clarity. Show depth and breadth in your paper to enhance the quality of your paper. Try your best to search in the Trident online library to find some papers/articles to support your argument and show them in the reference list. Turn in your 1- to 2-page paper by the module due date.
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Module 1 – SLP THE ORGANIZATION’S PURPOSE: MISSION, VISION, VALUES, AND GOALS In the Module 1 SLP, you will be considered a Strategic Management subject matter expert and will be asked to blog about important aspects of the Strategic management process and to provide examples to support your key arguments using current events pulled from a recent article from reputable sources (such as a trade journals, newspapers, or magazines such as the Wall Street Journal, The Economist, Business Week, or Forbes).    For the Module 1 SLP, find a recent article that provides an example of an organization that appears to be successful (or that has been unsuccessful) in fulfilling its Mission, Vision, Values, or goals. Hint: Visit either ProQuest or EBSCO-Business Source Complete in the library. Type in “Mission Statements,” OR “Vision Statements” OR “Values Statements” OR “Goals” in the boxes provided. Then, click on “Subject” in the pull-down menu bar next to each. Be sure to click on “Trade Journals,” “Newspapers,” and/or “Magazines”. You will find plenty of sources from which to choose. Your main article(s) for your blog entry must be no older than 12 months. You may, of course, use older sources to support your discussion and analysis, however, the current event article serving as the main focus of your paper must be no more than 12 months old. Remember that you are playing the role of a business expert who is blogging in the context of Strategic Management. The key here is to convey to the public the importance of the Mission, Vision, and/or Values statements or organizational goals in a Strategic Management context. You will need to provide examples of an organization that has done particularly well (or one that has done poorly) in fulfilling its stated Mission, Vision, or Values statements, or its goals.   SLP Assignment Expectations Your SLP assignment should be a minimum of 2-3 pages in length.  You are required to use APA formatting and you are required to cite and reference your sources. There should be a minimum of two reputable sources cited and referenced in your paper.   Please make sure you review the assignment rubric prior to writing your assignment.
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Module 2 – Case SWOT ANALYSIS Assignment Overview For the Module 2 Case, we will be formulating a SWOT analysis of the Coca-Cola Company. Case Assignment Visit the library, and go to IBISWorld. Enter the term “Soda Production in the U.S.” After you have familiarized yourself with the IBISWorld contents (be sure that you review all pages on the Soda industry), perform some additional and more current research in the library on Coca-Cola (use trade journals, newspaper articles, and magazines). Be sure that you review the company’s most recent 10-K report as well, located at http://www.coca-colacompany.com/2015-year-in-review/downloads Then, in a well-written 5-page paper, do the following: Perform an assessment of Coca-Cola’s external environment, identifying key opportunities and threats, by doing the following: Complete an analysis of Coca-Cola’s external environment using Porter’s Five Forces. Using the Function Approach to Internal Analysis, identify key strengths and weaknesses at Coca-Cola by performing an in-depth internal analysis of the company. Use what you have learned in previous courses to perform your analysis. At a minimum, evaluate the following functional areas: Accounting/Finance: Include your analysis of at least three (3) key financial ratios (if you need a resource, see: Drake, P. (n.d.). Financial Ratio Analysis. Retrieved from http://educ.jmu.edu/~drakepp/principles/module2/fin_rat.pdf). Marketing Human Resources Operations Management Technology Logistics After you have completed your Internal and External analyses, prepare a table in which you clearly show the most important strengths and weaknesses of the company, and the most salient opportunities and threats currently facing the Coca-Cola Company. Conclude your analysis by answering the following: Does Coca-Cola have more strengths or weaknesses? Explain. Does Coca-Cola have more opportunities or threats? Explain. Does Coca-Cola have any sustainable competitive advantages? If so, what are they? Assignment Expectations Your Case Assignment should be a minimum of 5 pages in length.  You are required to use APA formatting, and you are required to cite and reference your sources. There should be a minimum of three (3) reputable sources cited and referenced in your paper (at least two of your sources must be different from the sources provided you in the Background materials). Please make sure you review the assignment rubric prior to writing your assignment.
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Module 2 – SLP SWOT ANALYSIS For purposes of the Module 2 SLP, once again consider yourself to be an expert in the field of Strategic Management. In this assignment, you will blog about some aspect of the external environment of an organization, providing examples based on current events you have found in a recent article in a trade journal, newspaper, or magazine (e.g., the Wall Street Journal, The Economist, Business Week, or Forbes).    Hint: Visit either ProQuest or EBSCO-Business Source Complete in the library. Choosing an industry that is of interest to you, find a recent article related to how one or more of Porter’s Five Forces or PESTLE have impacted your chosen industry. You may want to type in a specific force as a key word (e.g., Social, Economic, Legal, Threat of Entry, Competitive Rivalry, Suppliers, Buyers, etc.). Be sure to click on “Trade Publications,” “Newspapers,” and/or “Magazines”. You may also select a specific company and discuss how a force (or forces) in the remote or industry environment have (for better or worse) affected that company. For example, you might find a recent article related to how the fiercely competitive nature (one of Porter’s Five Forces) within the soda industry has affected the market share of such major company players as Coca-Cola or Pepsico. Or you might find an article that evaluates how a new law or regulation (in the remote environment) has impacted the healthcare industry. Remember that you are playing the role of a Strategic Management blogger, who is conveying to the public how environmental forces (whether remote environment or industry environment forces) are affecting a particular industry.   Your main article(s) for your blog entry must be no older than 12 months. You may, of course, use older sources to support your discussion and analysis, however, the current event article serving as the main focus of your paper must be no more than 12 months old. SLP Assignment Expectations Your SLP assignment should be a minimum of 2-3 pages in length.  You are required to use APA formatting and you are required to cite and reference your sources. There should be a minimum of three reputable sources cited and referenced in your paper.   Please make sure you review the assignment rubric prior to writing your assignment.  
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Module 1 – Case THE ORGANIZATION’S PURPOSE: MISSION, VISION, VALUES, AND GOALS Assignment Overview In the Module 1 Case study, we will be exploring the Mission, Vision, and Values statements of the Coca-Cola Company. Case Assignment Do some research in the library and on the internet, and find the following: 5 criteria that comprise good (quality) Mission statements; and 5 criteria that comprise good (quality) Vision statements. Visit the corporate website of the Coca-Cola Company, and read the organization’s Mission and Vision statements: http://www.coca-colacompany.com/our-company/mission-vision-values Using the specific criteria that you listed in Item #1 above, critique the Mission and Vision statements of the Coca-Cola Company as follows: Mission Statement: Is the organization’s Mission statement a “good” Mission statement? Why or why not? Justify your answer using your 5 chosen criteria. Be specific! Vision Statement: Is the organization’s Vision statement a “good” Vision statement? Why or why not? Justify your answer using your 5 chosen criteria. Be specific! Finally, find the company’s Values statement: Conclude your paper with an analysis of the company’s Values statement: What do Coca-Cola’s values say about the organization’s sense of ethics? Assignment Expectations Your Case Assignment should be a minimum of 5 pages in length.  You are required to use APA formatting and you are required to cite and reference your sources. There should be a minimum of three (3) reputable sources cited and referenced in your paper (at least two of your sources must be different from the sources provided you in the Background materials). Please make sure you review the assignment rubric prior to writing your assignment.
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Average Rating: (0) Rate this: Metal Service Centers tighten inventory controls Trends In Distribution Tom Stundza, Executive Editor — Purchasing, 4/30/2002 2:00:00 AM Accelerated inventory reduction program s am ong m etal working c ompanies and continued as-needed s ourc ing by metals buyers has created an environm en t known to indus trial economists as “inventory ownership postponement.” For the past 20 m onths , a m ajority of the m etals buyers polled regularly by Purchasing Magazine have been m aintaining or reduci ng, rather than expanding, in-house stocks. This, in turn, has forc ed service center chains to keep a closer eye on their m etal inventories. “W e’re working every day to keeping inventories in l ine with reduc ed demand,” admits David Halcrow, vice president of purchas ing at Rus sel Metals Co in Mis sissauga, Ontario. ”This means very close c ontrol on stocks on a daily, weekly and monthly ba sis” for the firm that proc esses and dis tributes steel, nonferrous metals and superalloys through 57 servic e c enters in the U.S. and Canada. Metalworking industry buyers s ourc ed only 32 million tons of metals in 2001, a six-year low. That forc ed the service center industry to reduc e its inventori es of steel, nonferrous metals and the superalloys by an es timated 13% to 11 m illion tons at the end of 2 001. Stoc ks have slipped further this year, and the distribution industry’s inventory-reduction efforts probably aren’t over, s uggests Bob W eidner, presid ent of the Metals Service Center Institute (MSCI) in Chi cago, the trade group that represents the majority of the m etals distribution firm s in North Am erica. Of the service c enter buyers polled by Purchasing M agazine in April, 43% were m aintaining exis ting inventories , 37% were reducing in-house stoc ks and o nly 20% were expanding s tored metal tonnage. Steel Pipe & Supply in Manhattan, Kan., usually inventor ies 80,000 tons at its five service c enters in the Midwest. However, Andrew Becker, purc hasing agent, s ays he is reduc ing in-house inventories because demand for carbon steel , pipe, and tubing products “seems to be cons tant w ithout any upward spike yet this year.” Similarly, Kathleen Long, purc hasing agen t for service center Alpha Steel in Ham mond, Ind., is reducing in-house stoc ks of struc tural grades beca us e the available supply at the m ills for quick delivery is too m uch for current dem and, whic h is f lat. “The metals dis tribution business requires that ser vice c enter organizations adapt to m arket forc es th at are unpredictable, and often can res hape the nature of the m arket,” says Barney O’ Brien, president of Namasco Corp. in Roswell, Ga., which operates two d ozen s ervic e centers in the U.S. and Canada. “For exam ple, m ore than 25 steel product producers in the U.S. and Canada have ente red into some form of bankruptcy reorganization. This developm en t m ay c ause a res tructuring of the dom estic s upplier base that could have a bearing on Namas co’s future sourcing decis ions .” But, for now, the s ervic e center buyers appear to be able to get enou gh steel to m eet current dem and—exc ept in the Detroit area, where there is a definite tightnes s o f s upply from the mills this spring for autom otive-g rade shee t ste el products.Steel buyers nationwide polled in April, however, defini tely were c oncerned about future supplies of hot-rolled, cold-rolled sheet and coated s heet. “Pr ic es of she et steel were at 20-year lows in 2001 but now are m oving up quickly bec ause of the new tariffs that will reduce foreign-made produc t,” says W eidner of the MSCI. “At the s ame time, the demand im provement so far this year has been seasonal and s luggish. In this environment, s ervic e center ex ecutives are watching their in-hous e stocks very c arefully and the buyers (at the service c enters) a re nervous about how much new steel and other m etals to buy and when to have it delivered.” Processing is a factor Numerous buyers surveyed by Purc hasing say they are requiring more pre-production proc essing in an effort to m ake their internal fabrication operations m ore efficient. Many metals dis tributors have s tart ed m arketing the value-added process ing c apabilities o f their service center fac ilities . And several large s ervic e centers scrambling for the c ash to invest i n new equipment that will increase future productivi ty and efficiency—and compete against the independent toll-process ing c ompanies that hold no inventory. Chicago-based Ryerson Tull, for example, plans to ma ke significant investm ents in new, highly autom ated material handling equipm ent to boost produ c tivity. “W e expect these inves tments to provide s ubstantial benefits when the m etals market improves, ” notes Neil Novich, c hief executive officer. But, s ince he is n’t sure just when a subs tantial upturn i n dem and will occur, Novich says the 57-facility m etals dis tribution giant “is foc using this year on d eliberate inventory reductions.” Feralloy North American Stee l Co., a subsidiary of the Feralloy Corp. unit of Pr eussag North Am eric a Inc., has just completed a major information techno logy upgrade at Butler, Ind., as part of a new strategy to be more responsive to customer needs by improving its own internal she et steel inventory m anagem ent s ystem . Frank M. W alker, president of Fer ralloy, says the com petitive steel distribution m arket has required the investment at all of the com pany’s 10 coil proc essing and dis tribution plants “of the sophis ticated information s ystem s that will guar antee efficient and cost-avoiding m aterials m anagem ent programs.” Metals buyers rely on service c enters becaus e the qu antities they purc hase usually don’t give them enough leverage to buy directly from the mills , whic h have order-s ize m inim ums. Also, the buyers say that the supply of certain grades of metal are beco ming more limited, which necessitates s trategic allianc es with a limited number of distributors cap able of sourcing from onshore and offshore m ills. Y et, the results of at leas t three polls in the past year show that nearly half of the metals buyers are pla nning to reduce the number of s ervic e centers they will u se in the future. “And the fact that supplier-reduction programs are far from over is another reason that we have to kee p a c lose watc h on how much and what we sourc e from the mills,” says Ernie Taylor, purchas ing director at Integris Metals in Minneapolis, the nation’s third-l argest m etals dis tributor. “W e have had to be very judicious in our mill-s elec tion process becaus e we need to pick the long-term survivors who will be around to provide the metals we need.” Another factor that has heightened distribution con cerns about inventories is that 66% of the nation’s steel buyers are involved in jus t-in-time delivery progr am s, according to Purchas ing Magaz ine’s landm ark s tudy of last autumn. At least a fifth of t hese buyers also have their ste el dis tributors m aintaining ownership and management of the invento r-som etim es at the s ervic e center, s ometimes at the end-us er’s plant–until the m etal actually goes in to produc tion. Distribution experts s ay has created a form of inven tory trans parency, a process where the metals s ervic e centers evolve into extensions of a custom er ‘s purchasing and proc urem ent department rather than acting sim ply as a physic al dis tribution s ales c hannel for manufac turers. The problem for distributors is that costs assoc iated with such inv entory trans parency were absorbed easily when the m etals market was boom ing from 1990 into early 2000, but have been a money-loser during the 2000-2001 metalworking reces sion. W here buyers s ourc e metals now, and in the future (% of total metals buy) SOURCE: PURCHASING 1995 20002005 forecast Producing mills 28 23 24 Servic e centers 64 65 58 Processors 7 7 14 Metal Service Centers tighten inventory controls – 2002-04-30 06:00:00 | … http://www.purchasing.com/article/217399-Metal_Serv ice_Centers_tight… 1 of 2 1/14/2010 11:34 AM Average Rating: (0) Rate this: Resource Center Browse Categories Browse Companies Traders & merc hants 1 5 4 RELATED CONTENT TOPICS AUTHOR TOP RATED SPONSORED LINKS Featured Company Global Data Mining GDM specializes in global trade data, and helps pro vide global trade data and enterprise-wide data solutions to help importers and exporters around the w orld optimize & automate global trade processes.Working closely with the Content Specialists of… more Most Recent Resources Measuring The Impact of Procurement Training However You Slice It, Buying Energy is Unique Breaking Through the Relocation Cost Reduction Para digm: The Total… Using Data to Identify Risks & Opportunity Enterprise-wide Trade Data Management TALKBACK We would love your feedback! Post a comment » VIEW ALL TALKBACK THREADS Top 100 Metals Service Centers: Buyers sourced reco rd $67 billion in metals from distribution giants 04/30/2009 Steel service center shipments down 42% from a year ago 02/19/2009 Buyers looking to reduce suppliers 05/02/2001 Big declines reported for nine-month metals service center sales 01/14/2010 Buyers ask service centers: ‘What happened to JIT?’ … and a few other things 05/05/1999 Metal Service Centers tighten inventory controls – 2002-04-30 06:00:00 | … http://www.purchasing.com/article/217399-Metal_Serv ice_Centers_tight… 2 of 2 1/14/2010 11:34 AM
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Average Rating: (0) Rate this: Average Rating: (0) Rate this: Resource Center Browse Categories Browse Companies Fastenal adds inventory to stores, enhances service Staff — Purchasing, 9/2/2004 2:00:00 AM As a major growth initiative, Fastenal opened 151 n ew stores and spruced up hundreds of others in 2003 . This year, it plans to open another 200 more stores. Based in Winona, Minn., Fastenal is a full line distribut or of fasteners, cutting tools, hydraulics and pneu matics, plumbing supplies, janitorial supplies, chemicals and paint, electrical supplies, welding supplies and material handling, storage and packaging items. The stores carry all these products. As of June 30, 2004, Fastenal has 1,441 stores in the U.S., Canad a, Puerto Rico, Mexico and Singapore. In response t o customer demand, it recently opened an operation in Rotterdam, Amsterdam, and a facility in Shanghai, China. Eventually, Fastenal expects to have 2,000 stores in North America, with a particularly aggressive plan to expand in Mexico. Its sales in 2003 were $994.9 million. About 30% of the distributor’s sales are of direct materials to OEM customers; another 30% represents MRO business; another 30% is construction and 10% is miscellaneous (to the do-it-yourself market). In ad dition to delivering orders to plant floors and receiving docks at customer locations, Fastenal employ ees also work onsite filling orders and providing end users with technical assistance. At other customer locations, the distributor maintains stores on plant sites. Customer Service Project At its stores located throughout North America, Fas tenal has a strong and growing walk-up business. Ea rly in 2002, the distributor embarked upon its Customer Service Project (CSP) enhancing inventory selection , merchandising and, in some cases, the locations of its stores. It invested $40 million in the project over the past year, opening the 151 stores, upgrading more than 5 00 others and adding a significant number of SKUs (Stock Keeping Units) to local inventories. To date, Fastenal is seeing improvement in the performance of its sto res. This year, the distributor expects to do close to $1.2 billion in annual sales. “What we’re doing is making the CSP locations much more user friendly,” says Dave Donahue, vice president, national accounts. “Now customers walk into the stores where products are fully displayed and available fo r them to look at and touch. Plus there’s plenty of product literature on hand for customers who wish to serve themselves.” The stores hold the lion’s share of Fastenal’s inve ntory. The distributor added some $28 million to in ventory in 2003. “We are constantly upgrading inven tory on a local level based on items customers are using,” says Don ahue. “Our system allows us to identify items that are moving multiple times within a certain period. We identify that inventory as standard stock and move it into t he store.” If a store does not have a part, a distribution center (Fastenal has 12 located throughout the country) fills the order. In addition to its other sales channels, customers can purchase items through Fastenal’s Website. The distributor routes orders to the customer’s local store for fulfillment. The local store prints the order, pull s it and delivers the items to a specified location at the customer’s plant. Many of these orders are delivered within the same day the customer places the order. Customers a lso may pick up the orders from their local store. Fastenal enhances the site four times a year, conti nuing to make it more user friendly. School of Business To ensure that store managers are up to speed on th e products they sell, the distributor added a one-week advanced selling course and operational develop ment training to its curriculum at the Fastenal School o f Business, which provides training to about 2,000 employees every year. Through its School of Busines s, the distributor also offers its manufacturer suppliers a certification program. “There’s a specific proces s that we require them to follow in order to make s ure the training is as efficient as possible and provides the techno logy and technical aspects of products in ways that our employees understand and can also teach to our customers,” Donahue explains. RELATED CONTENT TOPICS AUTHOR TOP RATED SPONSORED LINKS TALKBACK We would love your feedback! Post a comment » VIEW ALL TALKBACK THREADS WPG looks to grow its North American business 01/14/2010 WPG Holdings looks to grow its North American busin ess 01/14/2010 Fastenal expo to have more training for MRO buyers 02/28/2007 MRO distributors receive excellence awards 01/14/2010 Fastenal to acquire Holo-Krome 12/10/2009 Fastenal adds inventory to stores, enhances service – 2004-09-10 06:00:00… http://www.purchasing.com/article/214659-Fastenal_a dds_inventory_to_s… 1 of 2 1/14/2010 11:34 AM Featured Company Summit Energy Summit Energy is a pioneering provider of energy and sustainability management services for business and industry. Summit manages more than $20 billion a nnually for thousands of facilities in industries ranging f rom aerospace and automotive to… more Most Recent Resources Measuring The Impact of Procurement Training However You Slice It, Buying Energy is Unique Breaking Through the Relocation Cost Reduction Para digm: The Total… Using Data to Identify Risks & Opportunity Enterprise-wide Trade Data Management Fastenal adds inventory to stores, enhances service – 2004-09-10 06:00:00… http://www.purchasing.com/article/214659-Fastenal_a dds_inventory_to_s… 2 of 2 1/14/2010 11:34 AM
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Average Rating: (0) Rate this: Average Rating: (0) Rate this: Centralization stream lines purchasing Paul E. Teague — Purchasing, 5/18/2006 2:00:00 AM When you manage the purchasing function at a small company, you have to be fleet of foot because often you’re a team of one. Just ask Jay Johnson, who to tally revamped procurement at Fitcorp, New England’s larg est fitness center company. Joining a company that really had no purchasing staff, he acted as a one-man band handling sourcing, negotiations, buying, leasing an d contract management. His advice for others: centralize. Before Johnson arrived at the company, Fitcorp, lik e many other companies large and small, was very de centralized in its approach to purchasing. Fitcorp owns 11 different fitness facilities and manages 32 others, many of the latter owned by and housed in corporat e offices in the area. Buying at all those locations was an add-on responsibility for people whose main job was something else. “Everyone bought from their favorite suppliers,” Johnson recalls. Result: Fitcorp was working with between 300 and 40 0 suppliers for exercise equipment and indirect materials such as paper and plastic. One of Johnson’s first acts was to pare that number down to 25-30 through an RF P process where he measured suppliers according to metrics such as pricing, how easy they were to do business with, reputation, financial stability and length of time serving the fitness industry. Interestingly, Fitcorp doesn’t actually buy the tre admills, stair steppers, stationary bicycles and we ight-lifting equipment: It leases the equipment. “Price is not so much of an issue,” says Johnson. ” All the equipment is competitively priced and you can make up any differences in negotiations or in freight charges.” The key challenge, he says, is getting the equipmen t serviced. “The equipment manufacturers outsource the servicing, but there aren’t many service providers in our area who are qualified, and they mark up the parts. ” His solution was to hire his own service technician rather than rely on outsiders. He did the same with the cleaning service for the f acilities. “We were spending $150,000 a year on an outside cleaning service, so we brought the work in house and cut the cost in half,” he says. Payment terms is one area where Johnson believes th at companies of any size can have leverage, especially companies in the fitness industry where most fitness centers lease equipment through leasing agents. “We decided to bypass the leasing companies and go direct to the manufacturers, paying them in 30 days,” he says. That meant that the equipment makers would get thei r money sooner. “They would deliver us product even without a purchase order if we needed it,” says Johnson. Fitcorp is the largest locally owned fitness center in New England and part of a booming fitness indus try. According to the website for Fitness Management magazine ( www.fitnessmanagement.com ), enrollment in health clubs throughout the U.S. w as 22.5 million people as of 1999, the most recent statistics from the magazine. Johnson recently left Fitcorp. Says Bob Schwartz, s enior vice president and CFO, “Jay saved us money t hrough competitive bidding and skillful negotiating, and standardized purchasing at all our centers.” Fitcorp at a glance Business: Owns and operates fitness centers Size: 200 employees, $17-18 million in revenueKey challenges: Cutting number of suppliers; finding reliable servicing for equipment Key initiatives: Reduced supply base from 300-400 to 25-30 through rigorous RFP process; hired their own full- time service rep to offset problem of lack of reliable qualified service agencies. Saved money by bringing service and clean ing in-house. RELATED CONTENT TOPICS AUTHOR TOP RATED SPONSORED LINKS TALKBACK We would love your feedback! Post a comment » VIEW ALL TALKBACK THREADS New England Supply Chain conference set for October 08/03/2009 NECON 2007 01/14/2010 DOE says slow-moving electric reform laws put relia bility at risk 07/12/2000 Happy New Year 12/22/2008 Hiring activity does not let up 07/15/1998 Centralization streamlines purchasing – 2006-05-18 06:00:00 | Purchasing http://www.purchasing.com/article/231259-Centraliza tion_streamlines_p… 1 of 2 1/14/2010 11:33 AM Resource Center Browse Categories Browse Companies Featured Company SIRVA SIRVA, Inc. is a leading worldwide provider of relo cation and moving solutions to a well-established a nd diverse customer base around the world. The Comp any strives to deliver the best mobility experience at the lowest total cost to relocate… more Most Recent Resources Measuring The Impact of Procurement Training However You Slice It, Buying Energy is Unique Breaking Through the Relocation Cost Reduction Para digm: The Total… Using Data to Identify Risks & Opportunity Enterprise-wide Trade Data Management Centralization streamlines purchasing – 2006-05-18 06:00:00 | Purchasing http://www.purchasing.com/article/231259-Centraliza tion_streamlines_p… 2 of 2 1/14/2010 11:33 AM
Module 1 – Case STRATEGIC PURCHASING MANAGEMENT Assignment Overview Review the following article from Purchasing.com. Hannon, D. (2008). P&G uses Gillette deal to draft the blueprint for post-merg
Average Rating: (0) Rate this: Chem ical Buyers: Heed caution signs on road to e-sourcing Supplier relationships, compliance issues take center stage w hen buying chemicals online. By Rich Weissman — Purchasing, 4/10/2008 2:00:00 AM While e-sourcing has found its way into nearly ever y spend area imaginable today, buying chemicals onl ine requires significantly more attention than most spend areas. A buyer’s need for detailed product specific ations and regulatory compliance information often outpaces the need for speed in sourcing chemicals, and further emphasizes the need for strong supplier relationshi ps. Larry Giunipero, the ISM Professor of Purchasing an d Supply Management at Florida State University in Tallahassee sees compliance as the major bottleneck in easily purchasing chemicals online. “There is an el ement of control in the chemical purchase that may not be so prevalent in other online purchases,” says Giunipero. “Buyers have to be concerned with material safety d ata sheets (MSDS), hazmat issues, and even DOT regu lations for the transportation and storage of chemicals.” As a result, the direct buyer-supplier relationship is even more important when e-sourcing chemicals. “You need to be sure you’re dealing with credible, safe, suppliers that offer end-to-end process controls an d that is why I advocate a direct relationship with chemical suppliers,” says Giunipero. “Third partie s, or direct purchases from supplier websites, may not offer the control that you need to meet compliance issues.” That said, Giunipero sees a steady increase in e-so urcing overall, especially from the younger generation of procurement professionals, which will undoub tedly find its way to the chemicals market. “While more and more b uyers are gaining comfort in buying online, I see younger buyers really embracing online applications and that trend will continue to grow,” says Giunipero, point ing out that there may be issues around smaller com panies buying online as they tend to depend on supplier sites, third parties, and procurement cards rather than ap plications such as ERP and spend-management tools. “Smaller companies may be at a disadvantage in online procurement and that would especially translate int o their online chemical purchases.” The distributor’s role Chemical distributors are continuing to carve out their own niche in the e-sourcing universe. “The bus iness relationship with the customer is the most important part of the sale,” says Chris Jahn, the president of the Ar lington, Va.-based National Association of Chemical Distributors. “Chemical distribution is complex, and while we see an increase in online transactions, the process is not as simple as buying a book, office supplies or CD online.” And it’s that complexity that can give distributors an increased role in e-sourcing, Jahn says, noting that online transactions are a good way to strengt hen a business relationship with a chemical distributor. “Chemical distributors play a significant role in supporting the customer in both a technical and business leve l, and especially with online transactions.” Jahn sees the value in the chemical distribution pr ocess as one of managing compliance, regulation, an d risk. He notes that chemicals are coming from around the world and it is important to have a strong relation ship with the company supplying the product. “Are y ou really buying what you think you are buying?” asks Jahn. Buyers’ view Buyers have their own view of e-sourcing of chemica ls and it’s a cautious one. “I have found that procuring most chemicals is a very volatile operation d ue to the huge amount of liability put on both supplier and buyer, ” says Karl Harward, a purchasing and contracts man ager for the City of Salt Lake City. “I would not recommend procuring chemicals online unless the buyer has a l ong-term contract and relationship in place.” Harward recommends establishing long-term contracts with chemical suppliers that would allow for negotiated items such as product quality, price, freight and delivery costs, specialized insurance and any other related product requirements. Harward sees a compe titive landscape of chemical suppliers willing to negotiate if responding to a formal bid or contract proposal, bu t less so in responding to spot purchases online. “The chemical buy is very complex, which really imp acts the online sourcing process,” says Harward. Scott Egdahl, a strategic sourcing buyer with Bosto n University warns chemical buyers about an occasio nal lack of accuracy and process controls buying chemicals online can bring. “Purchasing chemicals online is a n important part of our procurement process and gre atly adds to efficiency, but we often have issues with the accuracy of transactional information [when buying online],” says Egdahl. “I realize that there are a lot of line items to manage that often need to refl ect accurate and up-to-date information, but I find I spend a lot of time reconciling contract issues.” Egdahl sees the quality and accuracy of online tech nical information, as excellent on Boston University’s dedicated supplier sites, but pricing often leaves something to be desired. “Our requisitioners often don’t know wh en there is a price variance but I do,” notes Egdahl. “The mistakes are often in the supplier’s favor and that can be very frustrating. “I still need to police the contr acts.” Aloke Bhandia, senior director of product managemen t for Ketera Technologies, the Santa Clara, Calif.-based e-procurement provider, sees online applicati ons mutually exclusive to the buyer-supplier relationsh ip. “You can still have solid supplier relationships and still improve the procurement process with e- commerce tools,” says Bhandia, who emphasizes there is no substitute for a strong supplier relationship. “E-procurement should supplement the relationship, not replace it.” “Chemicals can be extraordinarily complex and the I nternet has significantly allowed the rapid sharing of information in everything from compounds to mol ecular structure to images of the chemicals themselves,” s ays Eric Zoetmulder, the director of supplier network services for Cary, N.C.-based e-procurement firm SciQuest, which supports the scientific community. “Some scie ntists build their own chemicals.” Zoetmulder says that one chemical may have 25 related styles and co mpanies need to be able to support information on everythin g from proper routing to certificates of compliance. According to Zoetmulder, purchasing chemicals onlin e is much more than just the actual transaction. “Advanced search tools on online supplier catalogs ha ve enabled chemical users almost instant access to the informa tion that they need, eliminating a manual and time consuming process.” Zoetmulder also sees the automa tion of workflow as one of the important parts of online pr ocurement, especially when it comes to a company’s regulatory compliance. “The relationship with our chemical suppliers is th e most important part of the purchasing process,” s ays Milan, Italy-based Luca Guzzabocca, director of procurement for GlaxoSmithKline’s European operatio ns and a SciQuest user. “We need to make sure there is alignment within the chemical purchase, and that includes R&D, as well as with the buyer and the sup plier.” Supplier compliance, says Guzzabocca, needs to include GSK’s requirements as well. “We depend on our suppliers to support our compliance and regulatory requirements. The actual online transactions are not that big of a deal.” What it Means to Buyers: Buying chemicals online is not like other commodities—do your homework up front. If done right, e-sourcing should supplement supplie r Chemical Buyers: Heed caution signs on road to e-so urcing – 2008-04-10 … http://www.purchasing.com/article/227374-Chemical_B uyers_Heed_caut… 1 of 2 1/14/2010 11:35 AM Average Rating: (0) Rate this: Resource Center Browse Categories Browse Companies relationships, not impede them. Chemical distributors can play a role in e-sourcing of chemicals. Talk with your distributor partners abou t it. Online sources can provide better access to technic al and compliance data for chemicals buyers. RELATED CONTENT TOPICS AUTHOR TOP RATED SPONSORED LINKS Featured Company Lombardi Lombardi is a leader in business process management (BPM). We offer award-winning BPM technology and s ervices to help our customers, partners and government agencies around the world succeed with t heir process improvement initiatives. Our products… more Most Recent Resources Measuring The Impact of Procurement Training However You Slice It, Buying Energy is Unique Breaking Through the Relocation Cost Reduction Para digm: The Total… Using Data to Identify Risks & Opportunity Enterprise-wide Trade Data Management TALKBACK » SUBMIT FEEDBACK The point that chemicals (even commodity chemicals) cannot be approached like an MRO good in an e-auct ion may seem obvious, but we see many people miss this obvious point. Our firm, ChemConnect, has conducted thousands of e-auctions for all different types of chemical over the last 8 years, but for every successful event, we know there are at least 5 fail ed events. Thanks for reiterating this point, especially that, if properly used, an e-auction can actually strenghten relationships with your chemical distrib utors. We have used e-auctions to better organize c hemical buyers’ supply channels, pushing more spend to distributors when it makes sense. Michael Ereli – 5/13/2008 3:46:00 PM EDT » SUBMIT FEEDBACK Chemical supplier qualification just got more diffi cult 02/11/2009 Top 100 Chemical Distributors: Chemical distributor s prepare for recovery 01/14/2010 Chemical buyers measure supplier performance 09/12/2007 Chemical distributors look to make the most of reco very 01/14/2010 The Top 100 Chemical Distributors: Demand remains s trong despite high prices 05/03/2006 Chemical Buyers: Heed caution signs on road to e-so urcing – 2008-04-10 … http://www.purchasing.com/article/227374-Chemical_B uyers_Heed_caut… 2 of 2 1/14/2010 11:35 AM

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