Mini Case Study

Junxi Wang
BLOZIS COMPANY
As a supply manager, I would communicate with production and engineering
department to identify all the severe systematic operation issues step by step. By
updating and clarifying the responsibilities and procedures, the problems will be
solved.
The weak points of material control are showing in different procurement key steps
such as need recognition, ordering, monitoring, receiving, delivering and payment.
For the need recognition step, the expediter is handling almost all the technical
specification and rush orders because the supply department does not have such
ability. In addition, the requisitions sometimes are not done correctly. The managers
occasionally get confused about which material was being charged to their
departments.
For the ordering Step, There are times that expeditor creates purchase order by
himself or picks up confirming orders without notifying the supply department.
Then the supply department will not be aware of the arriving item or the invoices for
confirming orders, so the buyer will not keep tracking the shipment status. For
example, it took six months for those two special micrometers to arrive which could
properly be faster if the purchaser keeps updating the shipping status. Also, the
relationship between suppliers and the organization is not healthy because of these
past due payments.
There are also receiving issues that are spotted. The expeditors have received the
orders by himself without notifying the warehouse and the purchasing department,
plus the proper receive recording system is missing, which create errors on
inventory control.
Furthermore, the departments are not receiving the required material on time. The
particular incident was again the special micrometers missing, and the company
could not investigate any further for lacking of the evidence.
Because of all the systematic issues, the overall supply management performance
is poor. There are lot of areas in all the departments need to be fixed and corrected.
Solution:
The first step of the correction should starts from supply department. Both of the
supply manager and the buyer need proper technical training in order to be able to
understand the complex technical specifications. Otherwise, the communication and
understanding between supply department and the users will never be successful.
In term of the responsibility in establishing and interpreting technical specifications,
the buyer should be able to fully understand the technical requirements and process
rush orders. For the supply manager, the in depth technical training is required in
order to handle the specialized design problems.

After the improvement of supply departments technical training, the second

important step is to clarify the responsibilities for each department. First,
requisitions should only be created by the users in production and engineering
department directly. The requisition form should shows the essential details such as
the date, quantity, account to charge, the complete description of material and so
on. This could avoid accounting issues completely. Then the supply department
should be the only one to process the requisition and order the materials, so all the
orders could be monitored.
Once order arrived, only warehouse staff should be allowed to receive the order and
send the receiving report to the supply department immediately. Meanwhile, the
status and details of the processed requisition need to be shared and updated with
warehouse, production and engineer department. The warehouse staff should also
be responsible for delivering the committed material to the internal user and the
delivery document requires signature and date by the receiver. In consequence, the
inventory will be a lot more precise and the supply department will be able to pass
the bill to the accounting on time for the payment.
Once the responsibilities were clarified and the details were synchronized with all
the departments. The expeditor should be responsible for strategic development
such as improving the departments integration and communication. The expeditor
should support supply department with specialized design problems and make sure
the requisitions are satisfied. For the inventory, the expeditor should monitor the
usage of the material and updates the min/max of the stock level. Furthermore, the
expeditor needs to communicate with production and engineering for the feedbacks
about the accuracy and quality of the ordered material. In general, the expeditor is
the manager of the whole supply department for the company in order to provide
qualified product and service to the customers.