Identify the major issues and problemsMake sure you have the real problem - not just symptoms (getting the problem right is half thebattle.)Most of the cases have both an immediate, short-term problem or scenario as well as a longer-term, underlying problem that will need to be dealt with. Be sure that you are addressing bothtypes of problems in your analysis.*(last part of page was cut off, I'm posting it below):Task List for the Purchasing Department Duchess UniversityPurchasing Organizational/Responsibilities Review Task Expected Outcome ? Eliminate the reprocessing of data.? Analyze the purchasing data.? Analyze the data from central supplies.? Review the supplier master file.? Eliminate forms (paperwork).? Update authorizations and limits system.? Train new university employees.? Further develop the Web site by integrating software solutions.? Train purchasing employees on PeopleSoft.? Increase the number of systems contracts.? Review systems contracts that have ended.? Standardize purchasing processes across buyers.? Segregate procurement from nonprocurementactivities.? Rewrite job descriptions.? Free up people power; reduce costs.? Maximize purchasing effectiveness.? Maximize purchasing effectiveness.? Save costs because of early payments. ? Reduce costs.? Ensure functioning of the department.? Utilize resources outside the department onpurchasing processes.? Reduce costs and speed up processes.? Improve effectiveness of personnel. ? Reduce costs.? Reduce costs.? Achieve uniform best practices.? Improve daily operations.? Reflect past changes. Gain promotion compensation. of promotion opportunities, as promotions to the senior buyer level led to salary increases of about 25 percent.? On the basis of the meetings, Jim had generated a task list for achieving the goals, which is shown in Exhibit 2. Jim felt that now the goals and the task list were complete, but he was not sure how to implement them. He wondered to what extent restructuring the department would address issues on the task list.? In September, the purchasing department would face an upgrade of PeopleSoft. Moreover, the department would have to gear up for Web-based processing ofpurchase requisitioning that would start within the next year. Jim stated:"Like in previous years, it is going to be tough. We will have to work very hard just 'to keep the train on the tracks' while implementing the new systems."WHAT WAS NEXT?Jim wanted to restructure the department before September. He asked himself: "What exactly should the outcome of the restructuring of the department be? And, if I changed the structure, how should I do it?"

52 Purchasing and Supply Management 2-1 1 of 3 ness University zil, the purchasing department at Duchess Moreover, the government had reduced its grants in University lost 3 of its 14 employees because of death and recent years and had put a cap of 2 percent on tuition personal reasons. Jim Haywood, head of the purchasing increases for the next five years, thus, constraining the department, saw these unexpected personnel changes as university's major re an opportunity to address an issue that had bothered him for a while: "Should I reorganize the structure of the THE PURCHASING DEPARTMENT department and, if so, how?" The Web site of the purchasing department stated its mission: "Our objective is to look after your needs. We want COMPANY BACKGROUND: to provide you with the right goods or services, at the right DUCHESS UNIVERSITY time, at the right price, and on a continuing basis." To accomplish its goals, the department (1) purchased goods Duchess University was a public institution, with about and services such as computer and business products, lab 3,000 full-time employees and about 25,000 students, that supplies. photocopiers, furniture, and travel for the provided undergraduate and graduate education in all university; (2) managed central supplies, which were major academic disciplines. The total university budget bought in bulk, stored, and redistributed, as required; was about $500 million and purchases were about $120 (3) was responsible for ensuring the economic and timely million. Currently, the university faced major challenges: delivery of goods and services; (4) maintained an asset increased demand for university education; at the same inventory; and (5) managed the disposal of goods. time many faculty members were nearing retirement and Exhibit 1 provides the department organization chart. it was difficult to find replacements at acceptable costs. Junior buyers had a purchasing limit for a single purchase EXHIBIT 1 Jim Haywood Purchasing Director of Purchasing Department yn Ryan Organization Admin. Assistant Chart Theo Vaslow Vacant Purchasing Manage Purchasing Manager Physical Plant General Campus Recently hired Rick Waters Laurie Hass Peter Jacobs Senior Buyer Senior Buyer! Head Central Senior Buyer Construction Delivery Supplies computer Printing Jack Miller Vacant Elvira Castor Tara Stender Clara Saudoin Jasmin Gold Junior Buyer Junior Buyer Asset Inv/ Central Clark Junior Buyer Decor, Cleaning gating, Electrical Delivery Supplies Lab & Scientific Furniture Plumbing Disposal Supplica, Travel Leenders-Johnson-Flynn-Fearon | 2. Supply Organization | Text The McGraw Hill Purchasing and Supply Companies, 706 Management, 13th Edition Chapter 2 Supply Organization 53 of $2,000; employees at the senior buyer level, $25,000. senior buyer position, but the replacement would not Purchasing managers had a purchasing limit of $50,000. arrive until late May. He had not yet decided what to Jim Haywood noted that the current department structure do with the remaining two vacant positions. Right was a result of "patching up" in the last four years, in now, his staff was down to 10 employees. which the department had been extremely busy. In CAPS data showed that the purchasing department addition to its daily tasks, the department had to absorb had significantly improved over the past six years. the continuous introduction of software systems. The For example, the total revenue per professional consistent work overload had prevented Jim Haywood employee of $50 million was above the benchmark from attending to his nondaily responsibilities, including value of $30 million. Similarly, the total amount of a systematic revision of the department structure. purchases per buyer of $12 million had steadily improved over time and was now at the benchmark JIM HAYWOOD value. CAPS, however, also indicated that the Jim Haywood had assumed the position of director of department was still performing below average on purchasing six years earlier after working 17 years in the several other parameters, such as cycle time and the university's financial services area. As director of number of suppliers per employee purchasing, he still reported to the director of financial . After the consistent work overload during the previous services, with whom he had a good relationship. When four years, there was now an opportunity for reevaluating Jim took over the purchasing department, it was in the department and catching up on nondaily respons turmoil: The previous director had taken early retirement sibilitics. Among other things, Jim reevaluated his goals after senior management had voiced distrust in the for the department and its restructuring: department, and purchasing agents had strongly resisted "First, I want to reconsider the people issues in our changes to improve the department's efficiency. Moreover, department. I need to find a way to foster the careers of the department staff was dispersed in two buildings. my employees. They have been with me for a long time, When Jim came in, his goals included the reduction of know what they do, and deserve recognition. Second, the middle management layer (that is, the purchasing I still see room for improving the "value added' in the managers), the introduction of an online purchasing department. We do too much work that does not system, the integration of the department in one location, increase our effectiveness. Third, we have to react to a and the benchmarking of the department's performance. current budget cut of 2 percent and future anticipated For the most part, Jim had achieved these goals. By budget cuts between 3 percent and 5 percent." January of the current year, through intra-university To share these goals and to get input on how to transfers, early retirement, and attrition, the number of achieve them, Jim had already met with his superior. purchasing agents had been reduced in two from six, and He also had had meetings with his three remaining the total number of employees was 14, down from 20 in senior employees Theo Vaslow, Rick Waters. and six years. PeopleSoft, a software package for business Peter Jacobs-both individually and as a group. In process applications, was in use. So far, however, addition, a staff meeting with all employees had taken PeopleSoft supported the current work processes, but place reengineering to optimize PeopleSoft had yet to get under way. Moreover, all employees worked now in one location. In these meetings, several issues surfaced. Jim, as Finally, Jim had introduced a Center for Advanced well as the purchasing agent Theo Vaslow, felt that Purchasing Studies (CAPS) benchmarking system. they had to do too much supervising. Despite the reductions in personnel, the morale in the purchasing THE CURRENT SITUATION department was good. Most employees had been with the department for more than 10 years, and generally At the end of April, Jim Haywood faced the following employee commitment to their department and their situation: jobs was high. Jim generally viewed his employees as high performers who had done their best to keep the In April, one purchasing manager had died; purchasing department running in extremely busy furthermore, a senior buyer had left after her hushand times because of the introduction of software was transferred, and a junior buyer had left after her systems. Some employees at the junior buyer level, husband retired. Jim had hired a replacement for the however, had indicated their frustration about the lack