Procurement and Supply Management
Case Study Blozis Company
PMAC ID# 304012
September 28, 2012
Instructor: Nikki Raycraft
TABLE OF CONTENTS
TABLE OF CONTENTS
ENVIROMENTAL AND ROOT CAUSE ANALYSIS
ALTERNATIVES AND OPTIONS
MONITOR AND CONTROL
Blozis Company has grown from a small manufacturer into a very successful manufacturer, exceeding sixteen million dollars in business annually. The rapid growth has created some problems. Some suppliers are complaining about long overdue payments on materials received by Blozis Company. In most cases, this was caused by Blozis Company placing orders without issuing a purchase order number, and following verbal orders with an order confirmation. Another contributing factor is related specifically to the receipt of materials, and not controlling the records, and communicating with accounting in a timely manner. It’s my job to solve this problem. The late payments are being caused by a lack of process and controls in place, both when orders are placed, and when goods are received. In some cases, people are performing tasks of others in order to satisfy the needs of their internals customer, but neglecting their own tasks which are equally important. I have identified two main areas for improvement, Purchasing Procedures and Receiving Control. Effective immediately, Blozis Company is implementing a Purchasing Procedure, which includes, but is not limited to the use of purchase requisitions, more control of materials incoming and how they are stored for production, as well as a new process for letting accounting know materials have arrived with weekly report of actual receipts from the previous week. The second issue is the definition of roles and responsibilities for all key roles with the company, specifically the Expeditor. This report will define the Expeditor’s role more clearly. Purchasing will be responsible for placing orders with vendors and suppliers, based on specifications provided to them by engineering. The expediter monitors the orders to be sure that the materials are delivered in the specified amount of time. Organizations that maintain lean inventories rely on vendors to deliver materials as they are needed. The expediter plays a vital role in making sure that production has the resources it needs to run. With these new processes, and continued and monitoring, and with the support of everyone in the Supply Chain Group, I am confident, Blozis Company will quickly resolve the accounting issues related to overdue accounts, and will soon return to focus on growing the business for Blozis Company in the future. Please feel free to contact me at any time to discuss the progress of the plans detailed in the attached report.
Suppliers are complaining about long overdue payments on materials received by Blozis Company. In most cases, this was caused by Blozis Company placing orders without issuing a purchase order. As well, sizeable payment discounts are missed because invoices cannot be paid within the discount period. Also, Blozis Company is also extremely late on several supplier accounts. The issue is due to a lack of receiving reports being created and submitted to accounting for payment processing. Currently, accounting is relying on the memory of the Expeditor and Stock Clerk as to when and if materials were received. Often, materials have been delivered, but go missing in the warehouse, or are brought into the engineering department. If this occurs on a constant basis then eventually suppliers may not want to do business with Blozis. Roles and responsibilities are not clearly defined for the roles of Expeditor and Store Room Clerk. Expeditor types some of his own purchase orders, and picked up rush items. Often, engineering and...
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