Supply Chain Management

Procurement Case

PROBLEM STATEMENT:

A SCM Manager of a Beverage Manufacturing company is required to come up with the least landed cost for the demand requirements of certain SKU in one region in the Philippines. There are three(3) sources of major raw materials abroad. With the additional data given on the attached sheet, please provide your sourcing plan. There are also 3 Plants to be considered in producing the product namely Fast, Furious and Speed.

FORECAST:

Sales dept is projecting a monthly volume requirements of region elective of 2400k cases of product X. Due to forecast inaccuracies, sales is requiring a 3 days and 7 days minimum and maximum inventory level at sales offices respectively.

IN BOUND PROCUREMENT DATA:

• Major Raw Mat Raw Mat x accounts for 75% of total RM Cost

• 25% of other raw mat cost are source locally and have negligible impact

• 1000kgs of rm x per 1500cases product X

• Quality of three source is the same

• FTH = Ph0.50/kg/km

• Holding cost is 40% per annum

• Landed cost/ton excluding tariff

• 1USD =Ph45

• Ordering cost is Ph25k /order

• Payment upon placement of P.O. To Suppliers

Raw Mat X Source	Landed Cost/Ton @ Phil Port (USD)	Tariff (%)	LC + Tariff	Lead Time	Suppliers Reliability
Asia	30.88	3	31.81	23 Days	Ave 7 Days Delay / Shipment
Europe	27.62	15	31.74	90 Days	Zero Delay
USA	27.52	15	31.63	60 Days	Zero Delay

1. Assess which of the following suppliers to source out the Materials

2. Assess to which plant to produce the product of the business