BLOZIS COMPANY

Executive Summary:

Blozis Company a manufacturer of highly technical equipment made $16 million gross

sales by the engineering department. The supply department consisted of the supply

manager, a buyer and two clerks. Multiple problems led up to the main problem in this

case, one of those is the fact the engineering and production departments would contact

the expediter in ordering instead of going through the requisitioner. This in turn caused

faulty paperwork on items leaving the stockroom and the books would start to get out of

order. Another problem was that there isn’t enough communication between departments

and this has led to drop in efficiency. Everyone claims they did their job correctly but

there isn’t a paper trail to prove it.

Assumptions:

The supply manager had no technical training on the job which is highly technical in

nature, it was assumed that he had a fair grasp of the engineering terminology used in the

field and so she could handle the department. She definitely was dealing with as little as

she understood and so the expeditor took over the procurement process bypassing the

important part of the process.

The expediter who was formerly one of the technicians in the production shop and had

some technical training in the army but had no background in strategic procurement

processes was often contacted on ordering problems, he was not following the requisition

procedures.

Defining the issue:

The main issue and statement of problem here is the expediter performing several

daunting roles for which he is not properly trained i.e. playing the role of engineering by

substituting components from the stock room, and converting oral description into

commercial specifications. He also played the role of requisitioner, carrier, transporter,

records keeper, buyer and materials disposer. These multiple and diverse roles are

most certainly overwhelming for an individual to perform A second problem is the

system of “confirming orders” after pick up. Obviously, this is bad business practice

which exposes supplier to business risks as there is no legal documentation of the

transaction. As well it recreates aftermath invoicing, accounting and reconciliation

problems . It is a reactive business strategy rather than a proactive one.

The supply function is not properly organized, there is inefficiency

and miscommunication within the company. Blozis company hasn’t strictly enforced

company’s policy. The president is running the company in a very informal way and

when the incidents occurred, no disciplinary action was put in place. The supply

department was always too slow in processing orders, they did not understand technical

specifications and the expediter is being overworked. The managers did not know what

materials were being charged to their departments until they see the monthly accounting

statement. There was lack of communication as the engineering and personnel

department do not know when materials come in. It is apparent that lack of control has

caused minor problems to snowball into bigger ones. The supply department was not

educated enough and so did not keep up with changing technologies to retain top

efficiencies.

Criteria:

 A stricter policy must be put in place or enforced within the company so that any

problems that arise will be dealt with sooner than later.

 The expediter seems to be doing too much in the company, he needs to focus

more on fewer tasks.

 The supply department needs to be educated more on the products they are

dealing with.

 There must be a better communication within the various departments of Blozis

company.

 Reset employees’ responsibilities and job titles.

In this case, a good decision will result in evenly distributing the workload and job

responsibilities to the right individuals which will lead to the correct materials being

ordered and not missing; purchase being issued at the right time to avoid“confirming’

situation, supplier invoices being paid on time and materials budget not being

exceeded.

Analysis:

The supply function is not properly organized. It is neither strategic nor tactical in nature.

When company allows one personnel perform five to six roles at once, there is

fundamental problem. There should be clear roles and responsibilities and the right

resources assigned to same. In addition, there needs to be proper forecast and planning

from the engineering side to ensure more proactive and strategic procurement. For

instance if the engineering and production team got their forecast and planning right,

there would not be the need for “rush orders” and/or “confirming orders” after pick up.

With immediate effect, the purchasing procedure at Blozis should be revisited and

refined. It should be changed because in the long run, it saves the company from financial

losses in terms of investing in fabricating equipment with the wrong specifications;

availing them to discounting opportunities via efficient receiving procedures; improving

supplier relationships and preventing missing materials.

These changes will be realized if the right technical resource is hired to determine and

approve the right specifications for different designs; instead of allowing a one-time

technician with no continuous training do the job. As well, one or two more buyers

should be hired to match the work flow and place the orders as requisitions are received.

Expediter should be responsible strictly to pick up rush orders and supervise the stock

room– nothing else. There seems to be some problems between the receiving clerk and

expediter’s roles, which must be clarified. The receiving clerk and the expediter must

align themselves as to the point where their roles intersect. For clarity, once items are

received at the receiving dock from supplier, receiving clerk signs for and takes

ownership for it. Expediter must sign for materials whenever he is moving them from the

receiving dock to the plant. Also there must be attestation to prove who expediter delivers

material to in the production plant. That way, there is traceability and tracking– and no

problems. The goal is to create accountability and resultant cost savings. This will please

the president.

Alternatives:

Blozis company faces the option of either hiring more resources which means spending a

little extra upfront to prevent long run and perhaps even more devastating loss of profit,

good will and image. Investing more on the right resources and personnel will be less

expensive than losing major capital equipment which disappeared by a sheer lack of

supply structure and eventually running out of funds to keep the business running. Recommendation and Implementation:

I strongly recommend resetting employees responsibility and job titles that is a procedure

of clarifying job roles, descriptions and responsibilities and strictly hold everyone

accountable for their job portfolio, in addition to hiring the right personnel and resources

to ensure a strategic supply function.

Implementation/ Plan of action:

This plan of action would take several weeks to be put in place:

Week One: Meet with internal stake holders including team members from the

productions, IT, engineering, operations, and finance and supply chain groups to advice

on above recommendation for opportunities to improve.

Week Two and three: Begin restricting training and roll out sign off documentation for

immediate use by receiving and delivery teams

Week four: Begin hiring advertisement

Week Five and six: Conclude interview and hiring process

Week Seven: On-boarding, training, and full implementation of new procedure. Monitor and Control:

A monitoring and control tool that will be beneficial is to check whether assigned budget

levels are significantly exceeded. This will set off a positive or negative trigger to

progress or bring up new strategies.

Another monitoring tool will be scheduled review and progress reports to check for any

lapses or gaps in the new procedure such as missing equipment, wrong specification or

delayed payment of supplier invoice re-occurring. If any of these problems is identified, a

re-strategy is bound to reoccur.