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Iowa Elevators Case

In: Business and Management

Submitted By aguo718
Words 1305
Pages 6
Summary:
A summary of the current situation at Iowa Elevators from a purchasing and inventory cost perspective is that Iowa Elevators is currently in charge of two divisions—grain-handling and marketing and farm supplies and the company has been experiencing decreasing profitability. Scott McBride was asked to re-evaluate the purchasing department and implement a five year cost-savings plan to save the business.
Analysis:

Current Problems
To get an understanding of the presentation I would give at the executive management meeting I have to outline the current problems at Iowa Elevator. There are currently five problems I have identified with Iowa Elevators. 1.) With human resources, there are currently certain staff members have too many roles. There are certain individuals responsible for supplier selection, product mix, branding, and promotion and assisted elevator and marketing center managers in the areas of promotion, new product development, and inventory planning. There are four managers who do all of these roles when in reality this role could be held by 6 different people. 2.) Another issue is that there is a surplus of suppliers. Currently there are 1,500 suppliers because purchasing is decentralized. The top 20 suppliers account for 45% of total purchases and the top 5 suppliers account for 35% of total purchases. Why are there 1,480 other suppliers? 4.) The numbers that Cathy collected are inaccurate. In exhibit 2, the total annual purchases showed an annual spend of $728,273 million with farm supplies accounting for $254,406 million. On exhibit 3 however, the annual purchases for the farm supplies division totals $310,783 million which means there are IT and data management issues. 5.) There are also high amounts of inventory which means the purchasing department is purchasing high amounts even though there are still high amounts of inventory left....

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