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Assessment Cover Sheet

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Assessment Title

Assignment 2 (A)

Programme Title:

Bachelor of International logistics management

Course No.:

TLB 5302

Course Title:

Introduction to Supply Chain Operations and


Procurement

Student Name:

Majeda Ali Yusuf

Student ID:

201401171

Tutor:

Emanuelle Blanchetot

16th of May 2015


Due Date:

16th of May 2015


Date submitted:

By submitting this assessment for marking, either electronically or as


hard copy, I confirm the following:
This assignment is my own work

Any information used has been properly referenced.


I understand that a copy of my work may be used for moderation.
I have kept a copy of this assignment
Do not write below this line. For Polytechnic use only.

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Table of contents
1.0 An overview of the project and explanation of procurement process.....3
2.0 Key equipment and services ..........................................................................3
3.0 Type of market analysis .................................................................................. 4
4.0 Conclusion.......................................................................................................... 4
5.0 References......................................................................................................... 5

1.0 An overview of the project and explanation of


procurement process
The aim of this proposal is to identify the scheme needed to carry the project
according to the customer requirements. Since the firm is taking the contract, the
companys lack of facilities and equipment required needs to be solved. Therefore, the
period from now until August 2016 must be used to build a new warehouse that fits
global ambient and chilled food warehousing.
Initially, the companys management department have to give the specification of the
items needed to the procurement department in order for the team to work on finding
the appropriate suppliers. Once that information are gathered, the procurement team
analyze the marketplace of the warehouse industry in order to understand it, be aware
of its regulations and highlight the available opportunities. Then, the procurement
team search for the items and start preparing a list of the best supplier that provide
them. Afterwards, this list is shown to the management manager to compare between
the different items and suppliers and to declare the sourcing strategy. In purchasing
items, the procurement team calculate the operating cost combined with the actual
price to find the total cost. After considering the sourcing strategy given by the
company, the procurement deal is decided.
Once the company is settled on the chosen items and suppliers for each item, the
procurement team start sending the purchase orders if it is a one-time purchase.
However, for fixed suppliers the company have to sign a contract with the supplier.
Those documentations specifies the payment date, the price, the delivery date and all
the requirements. After sending the PO, the procurement staff keeps in touch with the
suppliers on a daily basis to ensure that the items delivery will be safely received on
time. Once the order is received, the company pays the bill as per as the delivery
receipt. However, the company pays for fixed suppliers on monthly basis since they
have signed contract that includes the period the company have until payment is due.

2.0 Key equipment and services


To run this project, certain equipment and services are required. As for equipment,
forklifts are needed to lift items for short distance. Forklift machines can be either
purchased or rented. Another mandatorily equipment is the cold room as a storage
unit since the items stored are be ambient food. Furthermore, racks with shelves,
which are the most excessively used equipment in the warehouse. Therefore, it must
be made of aluminum and steel that can withstand the weight of the stored items. In
addition, technological equipment such as, telephones, computers and iPads are
needed for installing the warehouse system, communicating globally with customers
and uploading information of distribution and items. (Suttle, 2015)
As for services, the warehouse needs employees with experience in logistics as it is an
advantage for the company. For example, in case of any mistake in the receiving or

distribution process, a person with expertise in logistics and knowledge of a


warehouse environment and procedures can notice such mistakes

(MyJobSearch.com, 2015). Employees like the drivers of forklifts must be trained as


well by having forklifts driving license for safely usage of the machine. To ensure this,
the company must implement OSHA Safety Training Program that trains employees to
follow certain safety procedures in order to avoid loses (trucks, 2015). Moreover, the
company needs the Radio-Frequency Identification system. This system works when it
is installed on device, which sends radio waves to locate the RFID chip pasted on the
item in the warehouse. Using this system enable the warehouse operations to be
consistent and prevent items from getting lost by keeping track on timings of the
ongoing and incoming items (Scanco, 2013). Furthermore, maintenance services by
either the same company of the purchased item or another company. The company
needs as well some governmental services, like water and electrify to run its
warehouse operations. In addition, construction and ready mix services are required to
plan and engineer the warehouse. This has advantages on the company; one is that
the building is insurance covered while building. Another benefit is that contractor
buys wholesale items, which reduces the items price. In addition, it is time saving
because contractor is taking care of the whole building process as per the company
requirements.

(goalconstruction, 2013)

3.0 The type of market analysis that should be


carried out on potential suppliers
The aim of market analysis is to have an insight about the market nature to benefit
from it in decision-making. For example, knowing the number and size of competitors
in the market makes the company aware of its negotiating power with the supplier.
Therefore, the SWOT analysis is the best fit to implement on the suppliers.
SWOT analysis contains four sections, strengths, weaknesses, opportunities and
threats. In the first part of the analysis, the suppliers list is categorized into two
groups. First is the strengths category, where suppliers have characteristics that is
considered as an advantage for the company. The second category is weaknesses
where suppliers have characteristics that is considered as a disadvantage in the
market, which ultimately affects the companys performance. Another reason why
SWOT is the best fit is the acknowledgment of suppliers status in the market. Knowing
the strong suppliers makes the procurement team hold on to them as an assist for the
company and knowing the weak suppliers makes the procurement team implement
the multiple sourcing strategy on them to avoid loses.
The second part of the analysis is external factors that affect suppliers in the
marketplace. First is opportunities, which are the chances the suppliers have to
improve in a way that benefit the company. The second is threats in the market sector
that effects the suppliers productivity and progress. Such as, governmental
regulations, economic and market changes and trade unions. This risk assessment is
beneficial to the procurement team and the company as a whole as it enables them to
prepare the solution for those threats from a planned standpoint. (Kokemuller, 2015)

The overall benefit from this analysis is being aware of the suppliers resources
statues and act upon this acknowledgment. Vendors of services or products are
chosen wisely according to the lowest cost, known brand name, great quality and
having a competitive advantage. This strategy result in having more productivity and
cost saving.

4.0 Conclusion
To conclude, the procurement deal and the sourcing strategy are important to have a
great suppliers performance, which raise the success percentage if this contract is
taken. In addition, there are important equipment and special service needed for this
project succeed. Moreover, conducting a SWOT analysis clarifies the blurred image of
the suppliers by knowing information that helps the procurement team before and
while dealing with the suppliers.

5.0 References
goalconstruction. (2013, August 14). Advantages of Hiring a General Contractor.
Retrieved from GOALCONSTRUCTION:
https://goalconstruction.wordpress.com/2013/08/14/advantages-of-hiring-ageneral-contractor/
Kokemuller, N. (2015, 5 16). The Advantages of SWOT Analysis in a Strategic Plan.
Retrieved from CHRON: http://smallbusiness.chron.com/advantages-swotanalysis-strategic-plan-25672.html
MyJobSearch.com. (2015, 5 14). Warehouse Assistant. Retrieved from
MYJOBSEARCH.COM: http://www.myjobsearch.com/careers/warehouseassistant.html
Scanco. (2013, 5 3). What is Radio Frequency Identification? Retrieved from SCANCO:
http://www.scanco.com/what-is-radio-frequency-identification-rfid/
Suttle, R. (2015, 5 14). How to Start a Warehousing Business. Retrieved from CHRON:
http://smallbusiness.chron.com/start-warehousing-business-37016.html
trucks, Q. l. (2015, 5 14). QUALITY LIFT TRUCKS. Retrieved from Forklift safety &
training why is it important?: http://qualitylift.com/forklift-safety-training-whyis-it-important/