Read the Case Study below and answer the question that follows.

Supply Chain improvement at DONE Limited

DONE Limited (DL) is a large producer of farming equipment and its range includes (mainly) heavy goods and machinery such as tractors, diggers and farm vehicles. Their turnover is R2,5 billion with an operating profit of R4 million.

DL presently has an extended suffoly chain of about 5 000 suppliers globally. They have two key suppliers, APPLE Limited and GHD Limited, who account for 55% of procurement spend. There are 50 staff in the central procurement team.

The procurement team and systems at DL have recently undergone a purchasing audit, which looked at strategic and operating aspects of the procurement team, including the use of electronic purchasing. The results were poor with the auditors noting that the supply chain operation of DL is outmoded, lacks innovation, and is not fit for purpose.

/In addition, the auditors felt that there was poor communication between the DL procurement department and key functions such as marketing, finance, and design. Evidence was also supplied by the auditors of the poor market and supplier involvement, especially in the early part of the procurement cycle (identification of needs and specification development were emphasised for being particularly weak).

The report concluded with a review of how the procurement unit in DL interacts strategically with the supply base when monitoring areas such as quality, price, delivery and sustainability and there was little evidence of any sort of effective 'non- contractual' relationships within the supply chain. Within the report, it was highlighted that the assessment of key suppliers was particularly poor with no evidence of modern techniques or financial reporting being utilised.

Concerning costs, the auditors were unable to find any evidence of clear financial data on suppliers or any evidence of long- term demand planning, especially between sales and procurement.

question -

You have been appointed as the new procurement director for Done Limited (DL). Your CEO has asked that you provide him with a plan explaining the actions you will take to rectify the current situation in the Procurement Department. Propose a range of measures that you could utilise to improve the supply chain using examples from the case study, supported by relevant theory.

Allow for interpretation by the student, provided there is proper academic referencing. 20 marks in total. A maximum of 2 marks for introduction. 2 marks for the conclusion, 16 marks for references to the case study supported by additional theory.