Read case study and answer the following 3 questions

POSITIVE PIPING INC. THE IMMEDIATE ASSEMBLY DECISION In late December 2021, James Barrett, Director of Supply Chain at the Positive Piping Incorporated in Kitchener, Ontario, was reviewing the design drawings provided from the engineering team. A primary customer has reached out to the sales team to complete an urgent gas chemical upgrade to one of the existing sites. In order to maintain the positive customer relationship, Positive Piping sales team agreed to expedite the project for them. James had been asked to source out the assembly material and fabrication components immediately, for an expedited assembly in-house at Positive Piping Inc. POSITIVE PIPING INC. Kitchener, a city in Southwestern Ontario, was known as a vibrant community housing many of Canadas leading innovative companies and with local economy reliant on manufacturing sector. Positive Piping Inc. is a manufacturing facility specializing in fabrication of piping spools, innovating welding techniques and machining design Positive Piping is one of Kitcheners largest supporters of innovation in local manufacturing economy working in multiple industries including city development, energy sector, health sciences and multiple Research and Development projects. INDUSTRY Times were turbulent for the manufacturing industry in Ontario, being especially hit hard by the pandemic. Significant reliance on workforce and an often-complex supply chain has led to production restrictions, and in some cases closures. While these are significant challenges, many companies were faced with budget cuts, downsizing and even closure. Thankfully Positive Piping had been able to withstand these pressures in large part through its commitment to a high quality and efficient operation processes. INVENTORY COSTS In recent months several newspaper articles had printed reports on raw material shortages, global economy and the increasing costs after the events of the pandemic. The shortages raise questions about whether some companies have been too aggressive in harvesting savings by slashing inventory, leaving them unprepared for whatever trouble inevitably emerges. The shortages in the world economy stem from factors beyond lean inventories. The pandemic has sidelined port workers and truck drivers, impeding the unloading and distribution of goods made in global factories to ship across the world. The main issues currently affect all supply chain departments: Current Inventory Availability, Global Sourcing and Large Increase in Price. THE PURCHASING DEPARTMENT James Barrett, a graduate from the University of Western Ontario, had been at Positive Piping in his current position of Director of Supply Chain for two and a half years. (Refer to Exhibit 1 for an organizational chart.) Purchase decisions were based on comparisons of all suppliers that provided a quote. If a difference in price was five per cent or less, preference was given to local suppliers. Barrett wanted to move to a further strategic sourcing with a focus on the needs for the business. Working with the Operations team, the Supply Chain Department needs to source out suppliers with reliable delivery, highest quality and strong supplier communication. The company wanted payment terms of Net 45 to optimize cashflow. With the increase in budget cuts the purchasing department had a very tough decision to lower raw material assembly spend by eight percent, while increasing the current supplier performance quality. THE IMMEDIATE ASSEMBLY DECISION Positive Piping had had a long-term, problem-free relationship with many of its current suppliers, but the pandemic has caused many shortages and outrageous price increases on many products. When several operational staff members complained assembly material was not available on the shop floor, James Barrett questioned the suppliers and inventory shortages. James was very concerned about this lack of communication between Positive Piping and its suppliers since consistent on time delivery was major concerns for the company and the customers. Following the operations meeting, James had asked the purchasing team to source out new quotes for the urgent gas chemical upgrade project and asked the team to comparing the supplier responses received. All suppliers would need to deliver according to the production schedule, and offer the best payment terms on invoicing. The Procurement team was required to research the suppliers, keeping in mind the needs of the production team.

QUESTIONS:

1) What is the current supplier environment for Positive Piping?

2) With high quality crucial, how important is budget to the procurement team?

3) What are KPIs for the purchasing department?