The Oakland School District

Topics: Purchase order, Flowchart, Order fulfillment Pages: 7 (2230 words) Published: April 24, 2012


MARCH 6, 2012

In reviewing an analysis of his school district’s paper buying habits, supply manager Gene Smith uncovered some interesting statistics regarding the Oakland School District’s supply ordering habits. Through the growth of the school district, purchase orders for supplies had risen to astronomical levels. Over the course of the previous year, purchase orders (including original orders and change orders) had grown to an astounding 36,842, or nearly 3,100 orders per month. These orders came from one or more of approximately 1,300 suppliers.

Even more astonishing was the low average value of each of these orders. 35 percent of the orders placed were valued between $30 and $100 and 23 percent of the orders were below the $30 mark. Over half of all of the orders placed were for less than $100. This business practice is cost-effective for no company involve; neither the Oakland School District nor any of their suppliers are making good use of their time and resources by continuing to fill these small orders. PROBLEM / OPPORTUNITY

The order fulfillment process is convoluted and requires streamlining to create a process that is economically sound for both the Oakland School District and its suppliers. POSSIBLE SOLUTIONS
The first recommendation being made is to streamline the purchase order process to reduce the number of small orders and the number of suppliers to create a more cohesive ordering process throughout the district.

To begin this process, it is recommended that a cross-functional team of representative users from each point of the process (including but not limited to engineers, buyers, clerks, accounting clerks, controllers, the district treasurer, director of operations, and the district superintendant) meet for a one day meeting to map out the process used for each type of order.

As with all attempts at procedural change, especially across multiple departments, upper level management’s full support is essential. Since both the director of operations and the district superintendent are interested in updating the organizations’ ordering methodologies to create a better system, they should be marked as the “Champions for Change” for the process. This will help convey the importance of the panel meeting to all of those chosen to be involved.

The purchase order process mapping should be completed utilizing process flow charts to create a visual for everyone involved that shows where hang ups lie, bottle necks form, and where non-value-added activities create work where less is needed. A process flow chart should be created for each type of purchase order or purchase order change function encountered on a daily basis.

After the process flow charts have been created, the team members should be able to harness the concepts of continuous improvement to determine where changes, large and small, could be made. Since someone from each function of the process will be present at the meeting, issues with proposed changes could be addressed immediately. For the larger procedural issues that cannot be solved in one day, a list should be made with someone assigned to manage the completion of the issue which should be met on within 5 business days.

It will not be an easy process, but at the end of the day, some agreement should be able to be made to implement some changes to the order processing system for the betterment of the organization. Reduction of the number of small orders and/or the number of suppliers should be easily achievable.

These two things are the low-hanging fruit in the process of continuous improvement and should be able to be reduced quickly and efficiently. It is necessary to adjust these functions internally immediately before constraints (ie: minimum order charges) are placed upon the district by fed up suppliers end up costing the district more money and time.

For all of the strengths...

Bibliography: * Supply Management 8th Edition by Burt, Petcavage, and Pinkerton
* The Oakland School District case study
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