Central Purchasing Case Study
Globalization trade, technological improvements in manufacturing and communications areas, customer expectations and preferences, as well as the growing demand for social and notably environmental responsibility are changing the international competitive landscape. As a consequence, companies are changing their business processes.
Due to the intense international competition there is a need from European manufacturing companies to investigate all the best possibilities regarding cost reduction, quality and efficiency improvement. As a result, managers are becoming really aware that the largest part of their end product cost exists to the raw materials and services purchased from suppliers. For this reason, companies try to reconsider their core activities by developing and offering a special value proposition to their focused customers and increasingly outsourced to specialized suppliers. This puts consequently purchasing and supply management in the foreground (Van Weele, 2010).
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It has sold over 6 billion of liters of non-alcoholic beverages out of which close to one quarter was juices (Refresco Gerber, Annual Report 2014). The inbound flows of its raw materials to supply its production factories are therefore assumed to be substantial both in terms of volumes and logistics costs. Company’s Central Purchasing department will therefore investigate if any added value / benefits can be grasped in this area. There is a need for the evaluation of all the best possibilities regarding cost reduction, quality and efficiency improvement which makes the associated Purchasing Managers of Refresco Gerber to start investigating deeper. A proper understanding of the current inbound flows picture is Company’s primary concern which includes the mapping of the flows, volumes, constraints that apply and costs
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