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Assignment 2 (Part B) – Report (Individual)
Assignment 1:
Since your company experienced quality issues with an existing supplier, you as the procurement manager
must now provide a report on how to source new suppliers for a similar product. The aim of this initiative
is to ensure quality in production and manage all the process of introducing a new supplier or supplier to
the company’s supply chain.
On receipt of your initial proposal, management have now requested a full report outlining the company’s
procurement strategy for this specific project.
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Met criteria to an Met criteria to a Did not meet
excellent standard Met criteria to a satisfactory criteria
Part A: very good standard standard
Report Mark
Writing A B C F
(30 – 25.5) (25.4 – 21) (20.9 – 18) (17.9 – 0)
(20 – 17) (16.9 - 14) (13.9 – 12) (11.9 – 0)
(10 – 8.5) (8.4 – 7.0) (6.9 – 6.0) (5.9 – 0)
Identification of
sourcing Comprehensive and Some good arguments A satisfactory Poor or no explanation is
strategies and strong arguments are are presented on explanation is presented presented on different
presented on different different sourcing on different sourcing sourcing strategies and
best one for the
sourcing strategies and strategies and a strategies but the least strategy for the company
company
the most appropriate somewhat appropriate appropriate strategy for
strategy for the company strategy for the company the company is provided
20 Marks is provided is provided
Departments that
need to be The departments and The departments and A satisfactory The departments and
consulted on people that consult on new people that consult on explanation of the people that consult on new
suppliers are explained in new suppliers are departments and people suppliers are related to
sourcing new
excellent detail and relevant and are linked that consult on new scope of the project are not
suppliers
specifically related to the to the scope of the suppliers is provided explained correctly or at all
scope of the project. project and includes only some
20 Marks basic points related to
the scope of the project
Details included The information included The information required The information required The information required a
in a Supply in a supply agreement in a supply agreement in a supply agreement supply agreement contract
Agreement contract and an invitation contract and an invitation contract and an and an invitation to Tender
to Tender document is to Tender document is invitation to Tender document is not explained
contracts an
explained in excellent explained in appropriate document is explained correctly or at all and does
Invitation to
detail and relates detail and relates to the in satisfactory detail but not relate to the project
Tender Document specifically to the project project relates only slightly to
and the project
20 Marks
The importance of SLA’s The importance of SLA’s The importance of SLA’s The importance of SLA’s
are evaluated to a high evaluation are mostly evaluation are loosely support the earlier
standard and is clearly connected to the specific connected to the specific evaluation are not
connected to the specific project project connected to the specific
Evaluate & project project
importance of Key performance Key performance
KPI’s & SLAs Key performance measurements for measurements for new Key performance
measurements for new measurements for new raw material suppliers measurements for new raw
30 Marks raw material suppliers are raw material suppliers are identified and material suppliers are not
identified and evaluated to are identified evaluated evaluated to a identified or are evaluated to
an excellent standard. to a good standard. satisfactory standard. a poor standard.
The report format The report format The report format The report format does not
complies with formal complies with formal complies with only some comply with formal report
Report layout and
report guidelines. report guidelines. of the formal report guidelines. Information is
report
Information is excellently Information is presented guidelines. Information not presented adequately,
presentation presented, flows well and can be easily is reasonably well does not flow appropriately
appropriately and can be understood. presented and can be and cannot be clearly
10 Marks clearly understood. adequately understood. understood.
APA 6 referencing is
APA 6 referencing is mostly correct. APA 6 referencing is APA 6 referencing is not
correct. poor. correct or no reference
used.
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Contents
............................................................................... 1
Introduction:- ............................................................................................................................................. 6
Sourcing strategies:- .................................................................................................................................. 6
1- Make or Buy: .......................................................................................................................................... 6
2- Single Sourcing: ...................................................................................................................................... 7
3- Dual Sourcing: ........................................................................................................................................ 7
4- Multi Sourcing: ....................................................................................................................................... 7
5- Global Sourcing: ..................................................................................................................................... 7
6- Partnership Sourcing: ............................................................................................................................. 8
The departments consulted with raw materials suppliers:- ...................................................................... 8
1- Quality control department: .................................................................................................................. 8
2- Finance department:.............................................................................................................................. 9
3- Production department: ........................................................................................................................ 9
4- Sales department: ................................................................................................................................10
Information included in Supply agreement contract and Invitation to tender document:- ...................10
1- Term: ....................................................................................................................................................11
2- Minimum quantities: ...........................................................................................................................11
3- Inspection and Acceptance: .................................................................................................................11
4- Pricing: .................................................................................................................................................11
5- Delivery of the product/Shipping: .......................................................................................................12
1- Terms and condition of contract: ........................................................................................................12
2- Bill of quantities ...................................................................................................................................12
3- Terms and conditions of the contract:.................................................................................................12
4- Specification: ........................................................................................................................................12
Importance of having SLA’s between the company and their suppliers and having specific key
performance for the new suppliers:- ...............................................................................................................13
Bibliography .....................................................................................................................................................14
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Report (Assignment 2 Part B)
Introduction:-
The aim of this report is to identify the different sourcing strategies and give details the best strategy for
my case “to request new raw materials for Bobbi brown cosmetics”, explain the consulted departments
with regarding new raw materials suppliers, identify the information included in the agreement contracts
and offer to tender document for the new relationship and last will evaluate the importance of having
service level agreement between the company and the new suppliers and identify specific key performance
Sourcing strategies:-
Once the procurement department finished collecting the Supply chain and procurement planning data, it
will combine them to identify the organization requirements for purchasing the product or services
needed. And then, this data will be analyzed so it can be used as the foundation for an effective sourcing
strategy development. Also, this data will help in controlling the volume and timing issues in the purchasing
process (CILT, Lesson4). There are six strategic methods I will explain them and choose the best two for
1- Make or Buy: The procurement department in the company will decide either to produce the
product or to buy it, depending on the cost and availability of the production capacity. The
organization can choose to buy the product if it is cheaper to purchase it than manufacture it. Also,
if the company does not have a sufficient amount of the production capacity to produce it
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Moreover, the factors that make the company to select to buy a product rather than manufacture
it includes, lack of in house capability, little requirements volume, the need of multi sourcing, and
the element that may the product may not be critical. In the other hand, there are some factors
that drive the organization to produce the items than purchasing it such as, existing production
capacity, good quality control and proper technologies to produce the products (Anonymous,
2- Single Sourcing: The Company prefers to buy an item from one supplier, whereas there are lots
of suppliers that sell the same product. For example, when the company wants to buy the product
from a specific supplier such as DELL for computers, that will be a single source purchasing. Also,
when the company is dealing with single supplier it will be easier to change your supplier
3- Dual Sourcing: The organization will deal with two different suppliers that provide the same
product. This strategy will minimize the risks if one of the two suppliers did not perform well there
will be a backup trader to provide the company with the items needed. Additionally, the company
must consider the conflict in the product quality and the hard work to manage two suppliers that
4- Multi Sourcing: Usually when the company has several suppliers to purchase the products
needed from them, they make a healthy competition between the suppliers, in order to get a
better item quality with cheaper price (Anonymous, Sourcing Strategy , 2011).
5- Global Sourcing: The Company will purchase the goods externally from any country that can
manufacture the products needed in an economical way. On the one hand of the cost, it will be
cheaper to buy or manufacture a product in lower developed nations because the labor,
transportation and raw materials are cheap unlike in the developed countries. Also, in the low
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developed countries the government has less oversight on the product production and there are a
wide range of skilled workers (Anonymous, Global strategic sourcing demystified, N.D).
6- Partnership Sourcing: The aim of partnership is to transform the short term relationship
between the customer and the supplier to focus on lower the cost and improve the delivery to long
term cooperation. This will lead to a trust between both of the parties in which quality, innovation
In our case, as the procurement department manager of Bobbi brown company I will choose the best two
sourcing strategies for the company, Multi source and Global source. Because the company will purchase
some of their raw materials from other countries that are famous of producing and selling a specific
product with cheaper prices and because in the cosmetic foundation industry needs different type of raw
materials so the company will need to deal with more than two suppliers to purchase the raw materials
four of the important departments in the consulting regarding to raw materials suppliers and their
relationship with the procurement department. The four important departments are the Quality control,
It is important for the buyer to identify the specifications of the product in order to receive the final
1- Quality control department: The importance of the quality control department procedures
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Figure 1 Quality control
for the products the company produce, will help in increasing the demand and growing the sales.
Moreover, the quality control department is responsible for the further inspection on the
production process to reduce the production costs. Also, they will keep a record for every testing
2- Finance department: This department is responsible for all the business deals that happen every
day also it will manage any government reports. The finance department will help to manage the
company cash flow and it will check the funds if it is meet the day to day payment or no. Most of
Figure 2 Finance will manage the purchase and the cash need. Also, they
will keep a record about the items the company purchased. This department also will release a
financial statement within a specific period of time (Anonymous, Finance theory, N.D).
In our case, Bobbi brown will need to have a payment policy for the suppliers they will deal with.
3- Production department: The function of the production department is to transform the raw
materials into a complete item through a series of production process. The managers must make
sure that all the raw materials needed are available and made into complete product in an
effective way. It is important for the procurement department to provide the components and the
equipment needed to make the production process run smoothly, without the management of the
procurement department the production process will stop working and if there was any shortage in
the raw materials the production department will inform the procurement department to make
sure that the process won’t stop. Moreover, the production department will monitor the quality
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In my case, Bobbi brown production department will look after the quality and the quantity of the
4- Sales department: The most significant role of the sales department is to tighten the relationship
between the organization’s customer and the services the company provide that satisfies the
customer needs. Sometimes the sales department will work with customers that already know
Figure 3 Sales
call or meeting there must be a setting up to build positive relationship with the customers. The
sales department made the forecast that will include the amount of products this information will
be shared with the production and procurement departments (Anonymous, The Important Role of
Sales In An Organisation, N.D). Moreover, the procurement department will inform the sales
department about any increase in the products prices so the sales department can manage the
prices of the selling goods. Additionally, if the customers have any issue or a problem they will
directly contact the sales department to solve their problems and to answer their questions
(pressbook).
buyers need in a certain period of time and with a specific price whereas, the buyer must approve
to purchase the goods totally from this supplier during that time. Moreover, this contract will
include necessary information such as, Product delivery, Terms of payment and any other aspect of
Additionally, the supply agreement contract will protect the rights of the seller and the buyer. For
example, relating to our case Bobbi brown company will know from the supply contract how the
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goods they purchase will be delivered to the company. In the other hand, Bobbi brown suppliers
will know the needs and type of product the company wants and the payment method from the
This contract will include important information such as, Term, Minimum quantities, Inspection
1- Term: The agreement will identify a specific number of years for the term to run and a time
period for the raw materials will be supplied. Also, whenever the contracts ends the agreement
can be renew automatically. This option must be included in the agreement by identifying the
length of the renew term and the number of notices that is needed to stop the renew term
In our case, the term of the agreement will last for 7 years and there will be a possibility for
2- Minimum quantities: Bobbi brown company must identify the minimum amount of raw
material they will buy in a specific time and the seller must agree with it. Also, the agreement
must include a damage amount in case of, if the company could not buy the minimum amount
of raw material they must pay a certain amount of money to the supplier whereas, if the
supplier could not provide the minimum amount of raw materials to the company they must
3- Inspection and Acceptance: In the supply agreement contract there must be a specific
period of time that gives the company a chance to check the product and to decide whether
the raw materials for the cosmetic foundation are acceptable or not. And the company will
have the right to ask for replacement for the product or refund the money.
4- Pricing: While the company is negotiating with the suppliers on the raw material prices they
must keep in their mind the taxes and fees are included within the price. The supplier is
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responsible for the insurance and storage charges. Moreover, the pricing list must be attached
5- Delivery of the product/Shipping: The time, date and place of the raw material delivery
must be defines in the contract. The supplier is responsible for the delivery and for any delays
and damages occur in providing the materials in the time or date that is identified in the
agreement. Whenever the materials reach to the delivering points (Organization), Bobbi brown
Invitation to tender (ITT, is the method the organization use to select their suppliers based on the product
provisions. It will involve a document that helps in managing the supplier selection process. Also, ITT
document gives the organization the ability to select best supplier available and it will include documents
such as, the statement of work, request for information and request for proposal. Moreover, according to
our case Bobbi brown company will need an external supplier so the company needs a formal invitation to
tender to showcase that the selection for their supplier done fairly (Anonymous, Tender Process, N.D).
1- Terms and condition of contract: ITT document will identify the responsibilities of both parties
2- Bill of quantities: This document uses as the basis of submitting the tenders and with all the
prices shown in the document. Each contractor will showcase their prices for the bill of quantities
so the company can decide immediately between each tender. This gives the company the ability
to check which one of the tenders has the best value and who is not.
3- Terms and conditions of the contract: The contractors must read this document because it will
4- Specification: It will set out the standards, policies and procedures. It will describe the raw
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Importance of having SLA’s between the company and their suppliers and having specific key
performance for the new suppliers:-
Service level agreement is a document will include a description of the service level that is expected from
the supplier to provide it to the customer and there must be a penalties if any of the levels that have been
agreed to did not be achieved. For example, one of the raw materials supplier that Bobbi brown company
Figure 4 SLA's delivery could not be achieved by 99.9 percent because there
will be unpredictable problems can be occur that may cause delays, so the percentage should be more
realistic such as a percentage of 90%.Moreover, if the supplier did not met the percentage agreed with
then there must be a penalties (Lynn Greiner, 2007). The main service requirements are on time delivery,
The SLA’s helps in clarifying the metrics, responsibilities and expectations. Additionally, service level
agreement will protect both parties and it will set boundaries between them. SLA’s will help to satisfy the
customers and reduce the chance of disappointing them by understand and define the promises. Also,
promising the customer to provide for them the product or services they want will help the organization to
focus on their consumer requirements and they have to ensure that the internal processes are in the
correct direction. Also, the service level agreement will set very clear and measurable performance
standards so the internal objectives become an easy to measure (Why A Service Level Agreement Is 7).
Key performance indicators (KPI), is a measurement the company use to measure their performance over
time. It gives the ability to compare between other companies financial statement and performance.
Furthermore, in every company they must have a KPI goal so the executives should visualize the business
KPI’s in order to check if the company is meeting their goals or not. Within the organization departments
they also must have KPI’s but they have to be aware about the things the managers will be measuring them
on (Anonymous, Key Performance Indicators - KPI, N.D). The role of KPI is to provide internal and external
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customers to the organization with specific metrics the clients can reach easily and a customizable formats
they can use to risen their operations efficiency (Williams, 2011). Better scheduling and redesigned the
operations can result in reducing the lead time. It is important to decrease the lead time in order to reduce
the agency cost (J.Lederer and E.Semon N.P). Moreover, the KPI will measure how many times the product
delivered on time and how many times the product did not deliver on time (Mizrahi, 2011). By doing
surveys the customer can rate their satisfaction of the product or services, the customers with high rate
they are the ones who gets the best service and the customer with lower rates they are unsatisfied with
Bibliography
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