In applying a critical analysis of a wide range of principals, skills, techniques and practice, discuss how Alan can reduce the spiraling transaction cost during the procurement cycle, while it continues to maintain a supplier relationship, especially with their key vendors.

I need a 6000 word Harward referenced essay answering 6 questions in supply chain management and logistics for a diploma program The Case of Foodie Global Introduction Foodie Global is a well-known retail hyper store which started as a small family grocer in Manchester UK some 50 years ago. The organization’s business model has grown exponentially over the past ten years, opening new outlets in Liverpool, London, Oxford, and Birmingham. Within recent times, they have also diversified into nontraditional products, at least for them, selling a new brand of light weight folding bikes called Foldie Smart, from a large bespoke bicycle manufacturer based out in Pontypridd, Wales called Bikeinc. In 2018, profits rose to 1.3 billion pounds with many sales at the time coming from walk in shoppers, especially on holidays. However, by the end of 2019, many shoppers chose to buy online. Foodie Global has never offered online shopping in a major way and had lost significant sales and market share due to this. Over the years, the relationship with their first-tier vendors were not properly managed, with key suppliers swearing never to do business with them again. This had led to shortages and high prices, since they were forced to buy from third party sources. The CEO at the time, Lisa Foodie, in her last board meeting, indicated that supply chain drawbacks of the hyper market was the main cause of their poor performance in 2019, which was expected to continue throughout the following year. She said one of the long-term goals of the retail chain was to understand the customers’ requirements and meet them in the most cost-effective manner. She said vendors have been complaining about late payments and rush orders every Monday, coupled with software breakdowns and login challenges of the FG’s enterprise platform. Lisa later recognized that the supply chain lacked the much-needed integration which everyone, including suppliers, believed was one of the main causes of the supply chain challenges the outlets were facing. In continuing the issues surrounding suppliers, over the years, Foodie Global adopted the strategy of widening their scope for competitive prices. This has led to the growth of a supplier base of some 500 vendors, many of them supplying similar and identical goods, both locally and internationally. In a recent meeting with the CEO, it was then reported that the transaction costs and the diligent management of the supplier portfolio was urgently needed. Transaction costs had spiraled significantly where in some cases, it costed more to acquire the good than the actual purchase price. Lisa subsequently made it clear that they were not in a financial position to increase staff to manage such a large vendor portfolio and included the task of having Alan, her newly appointed supply chain manager to immediately present workable solutions to resolve both issues. Lisa Foodie, being the great granddaughter of Anthony Foodie, the founder, was keen on bringing the business back to its glory days. She believed that diversifying into other products and services could potentially turn the organization around. She felt that the bicycle sales, which could only be ordered through their stores, could be expanded into cycling accessories and even a range of electrical bikes that could be sold by them exclusively. But there was a problem with Foldie Smart orders from Bikeinc, their current bicycle dealer. Firstly, customers would order via a third-party online site called Spot Bike. From there, the customer will be directed to Foodie Global. This was a make to order arrangement where Bikeinc afforded a range of customization for these units. Customers were complaining about lead-times exceeding the stipulated time of arrival and many products of late were being returned due to faulty brakes. For some reason, Lisa preferred a methodological approach to resolving this issue but chose to take on the task on her own. With many of their competitors now trading online, Lisa felt that Foodie Global must revamp their current supply chain model and adopt the most suitable technology to transform their business swiftly. Alan Harvey, the newly appointed supply chain manager who worked many years in the manufacturing industry was held in high esteem. Alan, though new to the retail sector business, had a strong ICT background and had successfully established long term relationships with global automobile vendors. This was partly due to his strategy of allowing ICT to improve collaboration and communication. But Alan’s problems extended to other major issues. Two of their major meat suppliers based in Australia, reportedly hiked their prices by 15%, which was not the usual market price of the industry at the time. Negotiations had failed recently with the last supply chain manager Tim O’Neal who eventually quitted the job after this outcome. Lisa Foodie was not at all pleased, believing that with the right negotiation skills, they could get the supplier to agree to more favorable terms. During the job interview, Alan had then boasted of negotiating with several first tier suppliers in the automobile industry, successfully negotiating long term contracts with a list of favorable concessions for his company. Alan was now expected to meet with the suppliers in Sydney in three weeks, but not before he developed a negotiation strategy. Alan was also reminded by Lisa, that he must have a BATNA (Best Alternative To a Negotiated Agreement) in the event that things don’t work out. One such BATNA would be to select new suppliers from the Australian market. Port issues at Felixtowe had affected the stores severely, another contributor to the decline in profits. These disruptions have seemingly gone beyond the control of the group. However, Lisa was keen on having Alan develop a long-term plan to mitigate against further vulnerability, especially around the Christmas season where stock build up was common. Lisa also felt that another port could be considered along with a revamping of their logistics and transport system. There have been other challenges as it pertains to the movement of goods, not only from the port but from the manufacturers and suppliers. Traditionally, FG has done business mainly with NVOCCs but Lisa thinks that freight forwarders can do a better job ever since several of their shipments have been arriving damaged or never arriving at all under the present arrangement. Alan needs to advise Lisa on which arrangement might be best for the organization going into the future. With other projects on his agenda Alan had decided to bring Susan Wilson, another recent hire who just completed her first degree in business. He felt that she must be trained to gain an in depth understanding of the importance of containerization and other key aspects of logistics before she could be assigned to the port issues project. With plans to expand their imports from China and the Far East, the use of LCs was quite common. Susan would also be exposed to this form of payment. There were some concerns though since there have been instances where the details of the LCs are ignored with the relevant information not being shared by the parties. Mistakes were also made in choosing the most appropriate incoterms, which increased financial risk for FB At the end of it all, Lisa requested that Alan present to the board, an in-depth report on the status of their supply chains, providing recommendations and describing several theories that can be applied. You must now answer the following questions which will assist Alan and Lisa. a) Learners must critically analyze some principal theories, concepts and principles of supply chain management and the contribution they can make towards FB’s objectives. You must go on to discuss why it remains important for large retail hyper markets such as FB to have an effective supply chain, considering the fact that supply chain objectives must be linked to the organization’s business strategies. With FB’s current siloed approach to its supply chain, discuss the features and boundaries of an integrated supply chain and the benefits it can bring in resolving some of FB’s challenges. [15 marks] b) With the urgent need for Alan to address the current situation at the organization, critically assess how Alan’s ICT solutions, applied in his previous role could improve the supplier relationships and online communication. In applying a critical analysis of a wide range of principals, skills, techniques and practice, discuss how Alan can reduce the spiraling transaction cost during the procurement cycle, while it continues to maintain a supplier relationship, especially with their key vendors. [15 marks] c) Evaluate how Lisa can correctly apply a JIT methodology along with forecasting systems, to provide a seamless operation to the bicycle deliveries. You must as well, critically discuss a range of complex skills, techniques and practices, that could be applied to reduce lead times, something that would be welcomed by the Bikeinc’s customers. Finally, you must help Lisa develop an original and creative project-based strategy towards successful supply chain management, focusing on addressing the current JIT concerns. [15 marks] d) In the event that Alan is unsuccessful with the negotiations in Australia, he must proceed to develop a supplier selection strategy. Critically review and research the importance of a robust supplier selection process and the relevance of a collaborative buyer / supplier approach after contract award. Alan is also expected to develop an effective negotiation strategy, developing a list of steps that must be entailed. [15 marks] e) With Lisa now hinting the need to revamp the logistics and transport system, even considering a new port for their business, you must critically discuss the expected challenges of a port selection, along with the issues surrounding the movement of various goods along with the choice of transport mode. [10 marks] f) Critically review the advanced and specialized skills required by Susan to carry out shipping procedures in an international market. You must also discuss the strategic role of containerization and NVOCC in helping FB regain their competitive edge. Considering concerns raised with LCs and shipping terms by FB, conduct a critical review of a host of complex and new issues that are now surrounding LCs and shipping overseas, especially from China, along with the interpretation of shipping terms. [15 marks]

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