On April 11, 2002, Rob Pincombe, Purchasing Manager at Unifine Richardson was notify by their main honey supplier Harrington honey that Canadian Food Inspection Agency (CFIA) has found traces of Chloramphenicol in Chinese honey. As a result to the contamination of Chloramphenicol in Chinese honey, Harrington honey has decided to discontinue importing Chinese honey. Consequently, Mr. Pincombe has to consider on a long term contract to lock down on a specific price. The recommendation will be base on factors such as price, quality (taste), custom predictability & transportation risk (flexibility), political risk, work ethic and overall attractiveness. Not only that, they have to consider on a strategic perspective on building more suppliers to give them choice and flexibility, retain control, better pricing and growth for the business. Issues
Harrington Honey has decided to discontinue importing Chinese honey due to the contamination of the honey with Chloramphenicol. Since the honey was 50-50 blend of Chinese and Canadian honey, Mr. Pincombe would have to consider alternative options. Environmental and Root Causes
The world supply of honey has decreased by 20% resulting in higher honey prices (non-Chinese) and there are still concerns about product availability regardless of price. Chloramphenicol contamination of the Chinese honey is the root cause to the world shortage of supply. Alternatives and/or Options
Three options were offered to Mr. Pincombe as follows: 100% Canadian Honey at $1.75/lb, 100% U.S. Honey at $1.10/lb in U.S. dollars and 50-50 blend of Canadian and Argentinean Honey at $1.42/lb. In addition, Mr. Pincombe was asked to consider the possibility of a long term contract to lock down on a specific price. The option with the highest weighted score is 100% Canadian honey due to these following criteria: quality, custom predictability, transportation cost or risk, political risk, work ethic and overall...