Purchasing and Supply Case Studies

Topics: Procurement, Purchasing, Ford Motor Company, Supply chain management, Logistics / Pages: 5 (1119 words) / Published: Aug 4th, 2013
Southeastern University
In this case, we are focusing on Southeastern University, one of the largest universities in the state, and its purchasing department. There was recently an issue with a purchase made, because the transaction not gone through the correct procedures a purchase must follow. The purchasing process begins with a purchase request being submitted to the purchasing department, where a clerk stamps and checks it. The policy was to solicit at least two written quotations for purchases in excess of $7,500 and a minimum of three quotations for purchases in excess of $15,000. A request for quotation form is then made and has specified details, such as product or service description, quantities, FOB point, and terms of payment. The purchasing department maintained a list of approximately 1,200 approved suppliers, which were adjusted every three to five years. Heather Sloman was one of the buyers and stated the main objective of the purchasing department was to achieve the greatest cost savings. Something that I found incorrect in the department was that although it was university policy that approval from the department was required before any commitments could be made to suppliers, it was not unusual for university personnel contacted suppliers directly. Every year there were around 275 cases where contracts were signed without prior approval of purchasing. Usually, after getting details of the purchase, they are stuck because nothing else can be done. The machine in question was a $14,000 purchase, almost needing three quotations if handled correctly. Also, the supplier of the machine was not on her approved supplier list. After getting three quotes that varied from approved suppliers, I would not imagine Heather was very happy at the situation. With little time before her meeting with Glen, she was in a bind and had to come up with some strategies to resolve this situation and have something in mind to avoid future problems of this type.

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