LOG317: The GLUEIT company is a producer of resin for the wood panel industry. The company has been using a food-grade mineral X: Procurement Strategy and Policy Assignment, SUSS, Singapore

The GLUEIT company is a producer of resin for the wood panel industry. The company has been using a food-grade mineral X in its production for the longest time. Due to recent geopolitical events, the company is experiencing cost pressure and supply disruption. The next concern is probably more urgent – the natural deposit of Mineral X is forecasted to dwindle in the coming years. The procurement director suggested to the product development team to explore using technical grade mineral-X. Early indication is favorable.

There is no adverse reaction to the stability and performance of the finished product. Technical grade mineral-X is 35% cheaper per unit m/ton and has a wider supply source. Existing suppliers (there are two) focus on the food processor industry, carrying mainly food-grade ingredients. Qualification of new supplier will take up to 8 months. The company consumed 200 m/ton per month per plant – a significant volume for food grade specification. However, this demand is considered fair for the industrial, technical grade market.

1. Propose the appropriate procurement approach (Procurement Chessboard framework) for the GLUEIT company going forward.
2. The procurement manager is concerned that current suppliers might be unable to support the operation. Appraise the employment of the (3-dimensions) Risk Management framework in this scenario.
3. Besides the customer base, the supplier is the company’s next most important group of players. Design a supplier management plan specific to the supply of mineral X.