Late in the afternoon of August 23 rd , Dennis Cooper, Purchasing Manager at Canada Plastics watched

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Question:

Late in the afternoon of August 23^rd, Dennis Cooper, Purchasing Manager at Canada Plastics watched the boss angrily leave the room. It was the second time in a week that Dennis had been blamed when the plant had run out of raw materials, and he wondered how he should address the inventory control problem at the nova Scotia plant.

Canada Plastics was a large multinational supplier of plastics compounds, which constituted the raw materials, such as polypropylenes, polyethylene's, styrene's and nylons. These compounds were used to manufacture a variety of products, such as automobile bumpers, dash boards, helmets, packing materials, and hard-shell suitcase.

The company had pursed a growth strategy, mainly through acquisitions during the last decade. Currently, Canada Plastics owned 13 manufacturing plants in North America, Europe, Latin America and the Asia-Pacific region with combined sales volume of 1 billion dollars. The company employs approximately 2000peopl worldwide.

The Canada Plastics Nova Scotia was about 110 000sq. ft. and sat on about 25acres of industrial land with access to rail siding. A total of 85 people worked at this plant.

During the last decade, Canada Plastics and its suppliers had moved to a just -in-time system which required Canada Plastics to work closely with its to schedule delivery of raw materials. The result had been to trend towards lower supply chain inventoried.However, this also increased the risk of stock outs, which could result in expensive downtime for Canada Plastics.

Until two years ago, purchasing at Canada Plastics had been a decentralized function, where each department was responsible for ordering its own raw materials. Because of inventory control problems, such as excess inventory for some products while experiencing frequent stock outs of other, management decided to make a change. Therefore, Dennis Cooper, as production supervisor at the plant with 16 years' experience, was moved to take over the control of a newly created centralized purchasing department for the Nova Scotia plant.

The materials management system at Canada Plastics had not been properly integrated with the other parts of the Canada Plastics organization or with its suppliers. Dennis found the inventory control system to be unreliable, frequently contribution to stock outs. While it was good at processing regular shipments, it could not handle unexpected requirements adequately. In addition, a parallel "handwritten" system was in effect, which required Dennis to spend two or three hours a day filling out forms. In his first year, Dennis developed a series of spreadsheet applications to automate some of the repetitive and error prone tasks.

As the plant expanded, the number of products that Dennis had to keep track of rose from 300 to 575! Even with his new spreadsheet, it became increasingly difficult for Dennis to manage the inventory levels accurately.

Dennis was even criticized when a stock out occulted, even though he believed that most of the time it was not his fault. Often, the inventory control system was a couple of days behind real time, so it did not reflect current inventory levels. At other times, transportation problems, especially the unreliability of the Canadian rail system, caused shipments to be delayed. The plant only had a 10 silo capacity for raw materials and sometimes used rail cars full of materials as a temporary warehouse, when necessary. Dennis felt that inventory levels were high, but he had never been criticized for having "too much" inventory.

Both of this week's stock outs were typical. The first had occurred because production had not informed Denis that a prime customer had suddenly order twice its usual requirements a week earlier, and had failed to record the quantities with drawn from inventory correctly. This Dennis's records showed a significant amount of inventory on hand.

Today's incident had involved a shipment by rail from Montreal, that should have arrived for days ago, but which had "mysteriously" disappeared in transit. The supplier had shipped out the order on the proper date and was not at fault.

Question:

1. If you were in the position of Dennis Cooper what would you do? ( Explain in detail )