|University||Singapore University of Social Science (SUSS)|
|Subject||LOG317: Procurement Strategy and Policy|
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.
- Propose the appropriate procurement approach (Procurement Chessboard framework) for the GLUEIT company going forward.
- 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.
- 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.
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