9/3/2019 MNP3701

Semester 2 - Assignment 1 -897524

Question 1
Name and discuss two purchasing and supply pillars Air Chefs excels in with a
quotation from the case study :

• Real-Time Collaborative Technology Capabilities

Air Chefs has focused on improving their technological capabilities both in terms of
hardware advancements and the latest improvements in supply chain
management . They use dedicated trucks that serve a particular purpose well and
have implemented a state-of-the-art communication network to ensure work is
carried out efficiently. It is clear that they implement systems such as lean logistics,
lean operations, and lean supply by locating their trucks close to the ramps . This
ensures faster response and delivery times which ultimately improves customer
satisfaction.
“ All units are located less than two kilometres from the ramp, allowing for faster
delivery and response times to last minute crew requests. A fleet of high loader
trucks and support vehicles, as well as a state-of-the-art communications network,
complement this.”

• Capable Human Resources

A crucial aspect of any company is its employees. The level to which a company
excels is solely dependent on the quality of its human capital. Air Chefs ensures
that it maintains competent and qualified staff that excel in their respective fields
which can be seen by their acquisition of an ISO 22000 certification. This was only
possible through close collaborative relationships with suppliers and the
competence of a well informed quality assurance team. As humans there is always
something new to be learnt and Air Chefs supports and invests in improving its
human resources through ongoing training programmes.
“ Top management believes that this is the cornerstone of their success and
therefore, they recognize and reward their employees for their hard work. They
also believe in the upliftment of their employees by providing ongoing training for
growth opportunities.”
Question 2
Provide Air Chefs with an outline of issues that needs to be taken into account in
an environmental and social responsibility programme, which could lead to an
effective, efficient and sustainable supply chain process :

The best way to provide an outline of issues that need to be taken into account is
by first actually understanding the concept of sustainable management.
Sustainable development can be regarded as the way we use resources to meet
our current needs without compromising the ability of future generations to meet
their needs. So we can thus view sustainable management as being the level to
which sustainable development is taken in to account and implemented at various
stages during the selection, evaluation and management of a company’s supply
base.
So then what are the issues that need to be outlined and how can this relate to Air
Chefs maintaining an environmental and social responsibility programme which
leads to efficient and sustainable supply chain processes ?
• Evaluation of suppliers environmental performance
For any company, it is vital that the impact of all business processes on the
environment are understood . A major factor that should not be overlooked is the
way a company’s supply base carries out its business activities. A company is but a
link in a much larger chain and therefore the consequences of poor environmental
management procedures have repercussions way beyond that of only the
company in question. For Air Chefs to maintain a sound environmental programme
they can make various requests to their suppliers to prove that they are compliant
in performing business in an environmentally friendly and sustainable manner.
➢ ISO certifications have been implemented and standardized across the globe
for this very purpose. Air Chefs can request ISO 14000 certification from
their suppliers and if they aren’t certified yet , Air Chefs can incorporate a
plan within their supplier development framework to assist suppliers in
attaining such certification.
➢ The business processes of many suppliers produce waste as by-products.
Sometimes this waste is hazardous and must be disposed off correctly and
 safely. Air Chefs can request formal waste reduction plans from their
suppliers to assess whether it is up to standard.
➢ Along with the disposal of hazardous waste comes the issue of non-
hazardous waste management. Air Chefs can encourage its suppliers to
recycle waste and possibly reuse that recycled waste internally or provide
access for smaller businesses to profit from the recycled material. Air Chefs
can also stipulate to its suppliers that a certain percentage of materials that
are purchased must be of a recycled nature.
➢ The business processes of suppliers should be evaluated holistically including
the analysis of product life cycles. Areas to improve environmental
sustainability can be identified and capitalized upon. Programs can be put in
to place to minimize or completely stop the use of ozone-depleting
substances.
➢ It should be part of Air Chefs supplier policy that any and all prior
involvement in any environmental mishap be disclosed.

• Suppliers Social Responsibility

Air Chefs, being a major company with established knowledge and best practice
processes, can share this with their suppliers through development programmes to
ensure that their suppliers comply with their social responsibilities. Air Chefs can
train their suppliers in the use of appropriate performance measurement tools so
that they can monitor their progress and strive to do better both socially and
environmentally. There are also ISO certifications that Air Chefs can request from
their suppliers which serve as proof of a company’s commitment to high levels of
social responsibility initiatives.

• Implementation of certain conditions in Purchasing policies

The purchasing function within any company has the power to dictate who to buy
from as well as what to buy. This is important not only from a financial perspective
so that products and materials may be sourced cost effectively but also from the
perspective of sustainable management. There are systems which can be put in to
place to guide employees on making decisions which enhances a company’s
direction towards conducting business as sustainably as possible both
environamentally and socially.
➢ Purchasing managers should be open to sourcing from a variety of different
categories of suppliers to encourage a more holistic outcome of supplier
development. Air Chefs can achieve this by possibly ensuring purchases are
made from female owned businesses or businesses owned by persons with
disability. This ensures diversification of their supply base.
➢ A focus should be on first looking to source from local suppliers rather than
international suppliers . If something is unable to be sourced locally it can
then be bought from an overseas supplier ,however, an effort can be made
to uplift local suppliers over the long-term to be able to supply that
particular item in future.
➢ BBBEE is a major component of any business in South Africa. Air Chefs
should preferably want to conduct business with level 1 suppliers but also
assist in developing other suppliers to attaining a level 1 BBBEE status.

Air chefs is committed to becoming a recognized supplier that focuses on

sustainability. It has already proved this through various initiatives that it has
implemented. They are contributing to environmental conversation by using an
energy reduction programme. They are also looking to install solar panels to
harness natural, renewable energy.

Question 3
In the search for possible sustainable local suppliers, one of the suppliers bought
coffee and lunch for Air Chefs purchasing and quality assurance specialists.
Explain whether it was ethical or unethical behaviour proposed by the local
supplier and motivate your answer :
I believe it was unethical behavior.
Ethical behavior is usually good for business and involves respect for principles
such as honesty, fairness, equality, dignity, diversity and individual rights. The
decision of the suppliers to buy something as simple as coffee and lunch gives of
the impression to Air Chefs purchasing team that this supplier does not respect
those ethical values. The premise of buying that for them is to gain an unfair upper
hand over other suppliers to hopefully win more business. They would not be
winning the business on the merit of their company but rather through what can
be seen as a bribe.
 Sources

➢ Monczka, RM, Handfield, RB, Giunipero, LC & Patterson, JL. 2016. Purchasing
and supply chain management. 6th ed. United States: South-Western Cengage
Learning.