American Food and Grains: Commodity and Ingredient Procurement
American Food and Grains: Commodity and Ingredient Procurement
Background
The company was founded in 1969 as a flour milling company, after some diversifications the company has today three major groups: Consumer foods, Agricultural foods and Restaurants.
Quality
The company’s most important measure of performance is the food safety and quality.
They use a broader concept of quality: Quality of people, products and performance. Quality is a big issue for the company.
Quality sector: QA (Quality Assurance).
Procurement
Procurement has five areas: commodities, ingredients, capital goods, packaging and MRO (maintenance, repairs and operating parts). The major area is commodities, followed by ingredients, creating the C&I department.
Buying the commodities involves two sets of activities. Hedging in the commodities market and working with the commodities suppliers.
Before 1972, quality was not a concern for Procurement. The mission was get the lowest prices in the supplies and let quality with the QA.
In 1974 they hired Carl Reichers to be the risk manager. He created a Commodity Analysis department to analyze and predict the market trends.
In 1978 he hired Leah King for the department, because her experience and market knowledge.
In 1978 the company hired Stuart Erikson, to be the director of the C&I department. He changed the low-cost and risk-management orientation of the firm to a focus on supplier relationship, quality and total value orientation. Erikson had a good relationship not only with buyers and vendors, but also with marketing and R&D.
Sometimes Reichers didn’t agree with Erickson, he thought Erickson was getting too close to the suppliers.
Tom Hill, from R&D, started helping to build the link between R&D and Procurement, using monthly “R&D updates”, that helped the link with QA as well.
Bill Nesbit is the vice president for R&D, and he wanted to take this information exchange even further. He wanted to share
Background
The company was founded in 1969 as a flour milling company, after some diversifications the company has today three major groups: Consumer foods, Agricultural foods and Restaurants.
Quality
The company’s most important measure of performance is the food safety and quality.
They use a broader concept of quality: Quality of people, products and performance. Quality is a big issue for the company.
Quality sector: QA (Quality Assurance).
Procurement
Procurement has five areas: commodities, ingredients, capital goods, packaging and MRO (maintenance, repairs and operating parts). The major area is commodities, followed by ingredients, creating the C&I department.
Buying the commodities involves two sets of activities. Hedging in the commodities market and working with the commodities suppliers.
Before 1972, quality was not a concern for Procurement. The mission was get the lowest prices in the supplies and let quality with the QA.
In 1974 they hired Carl Reichers to be the risk manager. He created a Commodity Analysis department to analyze and predict the market trends.
In 1978 he hired Leah King for the department, because her experience and market knowledge.
In 1978 the company hired Stuart Erikson, to be the director of the C&I department. He changed the low-cost and risk-management orientation of the firm to a focus on supplier relationship, quality and total value orientation. Erikson had a good relationship not only with buyers and vendors, but also with marketing and R&D.
Sometimes Reichers didn’t agree with Erickson, he thought Erickson was getting too close to the suppliers.
Tom Hill, from R&D, started helping to build the link between R&D and Procurement, using monthly “R&D updates”, that helped the link with QA as well.
Bill Nesbit is the vice president for R&D, and he wanted to take this information exchange even further. He wanted to share