Question: COMMUNICATION AND SUPPLIER SELECTION PROCESS Sam has been working in shipping and receiving for 18 months. Recently, a job opening came up in the purchasing

COMMUNICATION AND SUPPLIER SELECTION PROCESS

Sam has been working in shipping and receiving for 18 months. Recently, a job opening came up in the purchasing department and Sam is hired as a new Junior Buyer.

As Sam is learning the job, he discovers there is a problem: A supplier is delivering late on a regular basis. Sam speaks to the buyer who had the job previously. He is very happy about his promotion and advised there are at least 4 capable suppliers listed in the files that "could do the job tomorrow". Sam reviews the files and confirms what the previous buyer had said. Sam is very confident this is an easy change to make and will get things back on track quickly. It is important to prove to his boss that he has the skills and knowledge to fix these problems.

Sam meets with the supplier's sales representative and advises they are aware of the late shipments. He asks the sales representative "What is your plan to start meeting our delivery dates?" The sales representative becomes a bit agitated and advises they are working overtime now to meet our demands, but that is all they can do. The sales representative left it there and the meeting wrapped up shortly after that.

Sam issues an RFP to the current supplier and 4 others to ensure a thorough and fair job is done. Sam identifies the following business needs: Consistency of supply with a 2-week lead-time, proof of quality with every shipment and any down time or late deliveries will result in charges for those expenses. This will guarantee the success of the new choice.

Time goes by quickly. Sam has a 2-week vacation scheduled, so prior to leaving, the new supplier is chosen, and everyone is very happy. The process even resulted in a cost reduction, which was equal to Sam's salary.

Sam comes back from vacation and discovers the new supplier has not delivered on time once per the due date on the purchase order. In fact, all 5 deliveries were not received when needed.

Sam is upset and calls the new supplier and advises them that penalties are being calculated and the penalties will be substantial. In addition, a written corrective action plan is required in a week. The supplier advises that is unacceptable. No penalties will be entertained, and no corrective action report will be completed. Sam is shocked and asked WHY? The supplier advised we never once gave them the 2-weeks' lead-time stipulated, and we breached the agreement on 100% of our orders.

Read the case study.
Write short paragraphs to answer the following questions:
- List 5 key facts and explain briefly why you think that each key fact is important.
- Use the purchasing process from Figure 7.3.1 to outline what steps were taken. What steps were missed?
- In your opinion, what was the most serious misstep in the process described in the case?
- Some of the causes for the scheduling department not being able to provide the correct lead-time could be due to:
  - lack of process (tools)
  - lack of training (skills)
  - Incorrect system input files (for example wrong usage rates or incorrect lead-time)
  - poor communication internally
  - poor communication externally
  - inaccurate inventory records
  - internal quality problems
  - receiving errors
  - schedules are not frozen for any period of time

Question: COMMUNICATION AND SUPPLIER SELECTION PROCESS Sam has been working in shipping and receiving for 18 months. Recently, a job opening came up in the purchasing

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