The manufacturing of peanuts is an effortless process. The peanuts are bought at varying prices on the world markets in advance of the requirement at their processing plants. The procurement department is at the Toronto headquarters, and it distributes the peanuts to their eight plants across Canada. At each plant, the peanuts are crushed and then blended with various preservatives.

The sales team in Toronto travels the country securing sales with food wholesalers. Once the orders are received, they are divided among the plants depending on which is closest to the customers and has excess capacity and are held responsible for ensuring that the promised delivery dates are met.

The company sets aside a certain amount of money for annual bonuses to all members of the management team based on ability to meet their budgeted cost and /or revenue targets.

The plant managers are treated as profit centers. Their main complaint is concerned with how their net profit is determined. As one plant manager said “I do not buy the peanut, nor do I sell them, but I end up being evaluated on both these things.”

The annual targets for the salespeople are set by negotiation between the CEO and the salespeople. They usually begin by looking at the sales for the previous year and adjust based on expected changes for the upcoming year.

The purchasing agents in Toronto are responsible for buying peanuts on the world market. They typically sign contracts agreeing to accept delivery of a certain grade and quantity of peanuts at a future date. Because the world market price fluctuates significantly, they try to predict what will happen to peanut prices for the upcoming year and buy at the lowest possible cost while keep certain minimum quality levels. During a typical month, the purchasing unit will receive 30 or 40 different shipments of peanuts at varying prices.

The peanuts required in the plants are shipped out following inspection and the remaining peanuts are sold on the open market. The purchasing units usually buy more than the plants are expected to use - just to be sure that the plants are fully loaded and operating to capacity.

The open market price for excess peanuts always exceeds the price paid by the company and part of the evaluation of the purchasing unit is based on the profit they make on these transactions.

Question

1. Determine the Key Result Areas (KRA), the Critical Success Factors (CSF), and the corresponding metrics - Key Performance Indicators (KPI) for the firm.

2. Examine their organizational structure 3， Should focus on Product Leadership Operational Excellence / Customer Intimacy, or Disruptive Technology？

Answer rating: 100% (QA)

1 Procurement manufacturing sales and bonuses are the primary areas of focus for the company in term... View the full answer