Sidharth Kundathil Prasannakumar

A20426508 Assignment 2 INTM 543

What do you do in the first 60 days? Give specific examples.

So, to start things off, I should get a clear idea of where we stand right now, what our current
situation is, possible areas for improvement and then take necessary steps to implement changes
(if at all required)

We have a total of 3 branches with their own purchase managers and clerical staffs, so we must
study all the documentations, our clients, their locations our suppliers, the agreements,
transportation options etc. this will take a few weeks.

The next step is identifying the bottlenecks, and the possible improvement areas. Centralizing
process means major rearrangement of things and reduction of the available labor. Conduct
meetings with other departments, and how they do things in the company, remove the excess
steps and streamline the processes.

I would contact the local vendors and clients, try to come up with purchasing agreements and
deals or we could even look for new fresh vendors, and make purchases through a common
platform within the company, instead of different local vendors. This could benefit the company
with better discounts that come up with bulk purchases.

E.g.: Purchasing of the components, there would be plenty of parts that are common on all
production processes. A better organized inventory system could be achieved

Once the planning phase is complete, we could do a trial run with the new process, all the while
making improvements and streamlining the activities. If the system works out, implement the
changes and standardize the processes.

What internal relationships will be critical to your success?

A clear communication within the departments and between the departments is crucial for
implementing any kind of changes. Here, transparency is the key. A major re-construction
involves compromising on certain things and activities which would require the support of
everyone in all involved areas.
The Supplier relationships and the buyer relationships is also very important.
E.g.: If a company is going through some improvement activities, delays in processes are
unavoidable. A better understanding with the buyers and suppliers will help in avoiding losses.

How would you organize the purchasing department?

The goal is to centralize the purchasing department. If there is just one department to source the
raw materials and distribute to the production centers across the region, it would help in
reducing man-power and work.
Sidharth Kundathil Prasannakumar
A20426508 Assignment 2 INTM 543
I would contact the local vendors and clients, try to come up with purchasing agreements and
deals or we could even look for new fresh vendors, and make purchases through a common
platform within the company, instead of different local vendors. This could benefit the company
with better discounts that come up with bulk purchases. The inventory will remain organized and
there will be uniformity in prices of materials among different centers.

What cost savings approach would you take to reduce the cost of the major commodities?

1. Order common things of operations like Sheet metal and things at bulk and distribute it
with our transportation facilities among different factories around the region whenever required.
2. We would choose a list of vendors who can provide the best prices and terms. This would
help in eliminating incompetent suppliers who are unable to provide a quality service at the
terms.
3. I’d employ quality standards, i.e., Total Quality Methods, which means the vendors will
have to provide an ever-increasing quality service with zero errors. The supplier will have to adopt
purchasing best practices for their products using several tools such as six-sigma. This helps in
eliminating waste and reduces production costs
4. Higher discounts from vendors because of the bulk orders.
5. Shipping costs are reduced because purchases are consolidated.