UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF SUPPLY CHAIN MANAGEMENT

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1 UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF SUPPLY CHAIN MANAGEMENT SCM Purchasing and Supply Management SCM A01 Mnday and Wednesdays 4:00 t 5:15 Winter 2017 Rm: Rm 104 Instructr: Allan Amundsen Office Hurs: Call fr appt. Rm TBD Telephne: (204) r (204) (wrk) allanamundsen@gmail.cm a.amundsen@uwinnipeg.ca COURSE OBJECTIVES: Purchasing r supply management has been cnstrued histrically as a secndary functin t what were perceived as mre imprtant functins in rganizatins, such as direct prductin. In many rganizatins, it still is perceived as a semi clerical functin. In this curse, students will becme aware f the substantial paradigm shift that has ccurred in purchasing, with purchasing nw having a key strategic rle. This curse pens with this fcus then flws t tactical and strategic cnsideratins related t rganizatinal relatinships, specificatins, surcing, ttal cst f wnership make r buy, price, cst and quality, relatinship management and infrmatin technlgy. TEXT:Purchasing and Supply Management Jhnsn, F.; Leenders, M.; and Flynn, A. 15 th Editin. McGraw-Hill Irwin. ISBN # ACADEMIC INTEGRITY It is critical t the reputatin f the I. H. Asper Schl f Business and f ur degrees that everyne assciated with ur faculty behaves with the highest academic integrity. As the faculty that helps create business and gvernment leaders, we have a special bligatin t ensure that ur ethical standards are beynd reprach. Any dishnesty in ur academic transactins vilates this trust. The University f Manitba Undergraduate Calendar addresses the issue f academic dishnesty under the heading Plagiarism and Cheating. Specifically, acts f academic dishnesty include, but are nt limited t: using the exact wrds f a published r unpublished authr withut qutatin marks and withut referencing the surce f these wrds duplicating a table, graph r diagram, in whle r in part, withut referencing the surce paraphrasing the cnceptual framewrk, research design, interpretatin, r any ther ideas f anther persn, whether written r verbal (e.g., persnal cmmunicatins, ideas frm a verbal presentatin) withut referencing the surce cpying the answers f anther student in any test, examinatin, r take-hme assignment prviding answers t anther student in any test, examinatin, r take-hme assignment taking any unauthrized materials int an examinatin r term test (crib ntes) impersnating anther student r allwing anther persn t impersnate neself fr the purpse f submitting academic wrk r writing any test r examinatin stealing r mutilating library materials accessing tests prir t the time and date f the sitting changing name r answer(s) n a test after that test has been graded and returned 1

2 submitting the same paper r prtins theref fr mre than ne assignment, withut discussins with the instructrs invlved. GROUP WORK AND GROUP PROJECTS Many curses in the I. H. Asper Schl f Business require grup prjects. Students shuld be aware that grup prjects are subject t the same rules regarding academic dishnesty. Because f the unique nature f grup prjects, all grup members shuld exercise special care t insure that the grup prject des nt vilate the plicy n Academic Integrity. Shuld a vilatin ccur, grup members are jintly accuntable unless the vilatin can be attributed t a specific individual(s). Sme curses, while nt requiring grup prjects, encurage students t wrk tgether in grups (r at least d nt prhibit it) befre submitting individual assignments. Students are encuraged t discuss this issue as it related t academic integrity with their instructr t avid vilating this plicy. In the I. H. Asper Schl f Business, all suspected cases f academic dishnesty are passed t the Dean s ffice in rder t ensure cnsistency f treatment. AACSB ASSURANCE OF LEARNING GOALS AND OBJECTIVES AACSB Assurance f Learning Gals and Objectives. The Asper Schl f Business is prudly accredited by AACSB. Accreditatin requires a prcess f cntinuus imprvement f the Schl and ur students. Part f student imprvement is ensuring that students graduate with the knwledge and skills they need t succeed in their careers. T d s, the Asper Schl has set the learning gals and bjectives listed belw fr the Undergraduate Prgram. The checked gal(s) and bjective(s) will be addressed in this curse and dne s by means f the items listed next t the checkmark. Gals and Objective in the Undergraduate Prgram 1 Quantitative Reasning A. Determine which quantitative analysis technique is apprpriate fr slving a specific prblem. B. Use the apprpriate quantitative methd in a technically crrect way t slve a business prblem. Gals and Objectives Addressed in this Curse C. Analyze quantitative utput and arrive at a cnclusin. 2 Written Cmmunicatin A. Use crrect English grammar and mechanics in their written wrk. B. Cmmunicate in a cherent and lgical manner C. Present ideas in a clear and rganized fashin. 3 Ethical Thinking Curse Item(s) Relevant t these Gals and Objectives Case assignments Quantitative analysis in case assignments Case Assignments Written case assignments Written case assignments and grup presentatin Written case assignments and grup presentatin 2

3 A. Identify ethical issues in a prblem r case situatin B. Identify the stakehlders in the situatin. C. Analyze the cnsequences f alternatives frm an ethical standpint. D. Discuss the ethical implicatins f the decisin. Chapter 15 Chapter 15 Chapter 15 Chapter 15 4 Cre Business Knwledge Entire curse CONDUCT OF THE COURSE: The curse will cnsist f lectures, grup mini-case analyses, grup presentatins and guest speakers. Students are expected t be in attendance fr all classes as marks will be made fr class participatin. The class will be divided int 6 grups. Each grup will be respnsible fr preparing a grup paper and presentatin n the tpics as listed belw plus a 20 minute mini-case analyses during the term. The assignment f the grup presentatins are as fllw: Grup Presentatins Each grup will make a presentatin n the fllwing tpics during the last sessins f the curse. The tpics are as fllws: Grup 1: Yu are the Supply Chain Manager fr a Crwn Crpratin that has recently amalgamated with a similar Crwn Crpratin. The premise is that this will save taxpayer dllars. What are the types f challenges yu nw face and where d yu find pprtunities t find ptential cst savings, efficiencies, and increased service levels? What types f peratinal activities d yu nw have t lk at keeping in mind plitical visibility, and the verall premise f taxpayers dllar savings. Grup 2: Yur Supply Management grup is respnsible fr the surcing f prducts fr a Natinal Warehuse and Retail Distributin Chain f stres in the Hardware, tl cmmdities. Describe the cmpnents f the prcurement prcess yu wuld use. What srt f challenges, supply markets and special circumstances d yu have t cnsider in rder t maximize in stck psitins fr the retail stres, the distributin centres, and minimize csts and als ensure the highest rate f return fr sharehlder investments? Grup 3: As a supply chain prfessinal (Prfessinal Purchaser) yu have recently been hired by the MFN (Manitba First Natins) t set up a system f prcurement fr a nrthern reserve that is nt accessible by year rund rad access. Yur reserve has been successful in btaining a grant t build a sq. ft recreatin cmplex. Yur rle will be t assist the prject manager and team t btain supplies and services fr this build. Discuss in detail the challenges yu will face. What wuld yu recmmend t the MFN t imprve prcess fr this and ther like prjects in the future? Grup 4: As a Senir Prcurement Agent fr a large city in Western Canada, yu have been requested by the city administratin t find an alternative lcatin t a crumbling building that currently huses the City s plice headquarters. What are the steps yu nw have t g thru in rder t nt nly btain a new lcatin but als nce lcated, issue cntracts fr the remdel t make the facility usable fr this new tenant? What are the challenges, regulatins, etc. that yu have t cntend with? Grup 5: Diamnds are a Girl s Best Friend! This desn t seem t be the case fr the Senir Buyer with a Diamnd Mine in the Nrthwest Territries. Cming frm an il explratin cmpany in Alberta, she assumed that nrmal purchasing cnditins wuld apply in her new psitin. Discuss what is different, what is similar, and hw she must rethink her previus supply management experience as it nw applies 3

4 t the unique prduct, the envirnment, and the lcatin f the mine. Grup 6: As a senir Supply Chain Manager fr a schl district yu are being asked t find vehicles t transprt students t and frm schl. Discuss the prcess, challenges, regulatins and any ther cnsideratins that yu have t satisfy while btaining these vehicles. Presentatins will ccur as during class sessin 22(Grups TBD) and class sessin 23 (Grups TBD). Each grup is t prepare and submit a page paper n the day f their presentatin alng with their PwerPint presentatin. The paper and presentatin cmbined will be the basis f the mark assigned. Each paper must have at least 2 references frm surces ther than the textbk r materials we have cvered in class. Case Analysis hand-ins Each grup will be respnsible fr writing a case analysis during the term. Cases are expected t be written in the Harvard Business Schl Case Analysis mdel as nted belw: Immediate Issue Assciated/Basic Issues Issue Analysis- Qualitative and Quantitative Analysis Alternatives with Prs and Cns (the prs and cns can be in pint Frmat) Recmmendatin and curse f Actin ( can cmbine ne r mre Alternatives but have t justify Picking the alternatives that slve The Immediate Issue- and als Cnsider Assciated Issues(usually Strategic issues) Implementatin Mnitr and Cntrl Overall presentatin and Cntinuity f case Cases: A Suggested Apprach t Analysis I. Descriptin/Majr Facts (Describe at a high level the cmpany. State here the majr facts as yu see them. Make statements clear and cncise fr yur wn understanding as well as fr the understanding f the ther students and the instructr.) 4

5 II. Majr Prblem (Immediate Issue Identificatin) (State here the majr prblem as yu see it. Emphasize the present majr prblem. Yu may wish t phrase yur statement in the frm f a questin. In a few cases, there may be mre than ne majr prblem. A gd prblem statement will be cncise, usually nly ne sentence.) III. Pssible Slutins (Use the questins t answer as guidance) A. (List here the pssible slutins t the majr prblem. Let yur imaginatin cme up with alternative ways t slve the prblem. B. D nt limit yurself t nly ne r tw pssible slutins. These slutins shuld be distinct frm each ther. C. Hwever, yu may wish t include prtins f ne slutin in anther slutin, as lng as each slutin stands alne. Only in this manner will yur subsequent chice be definitive. D. Briefly nte advantages and disadvantages f each pssible slutin, etc. IV. Chice and Ratinale (Recmmendatin) (State here yur chice, A r B r and the detailed reasns fr yur chice. Yu may als state yur reasns fr nt chsing the ther alterative slutins.) V. Implementatin and Mnitr and Cntrl (When requested, prepare a plan t implement yur chice) Case Assignments Grup 1 Sabr Inc. If yu were in the psitin f Ray Sles, what wuld be yur assessment f the Marcnil situatin and what strategy wuld yu adpt? POSSIBLE DISCUSSION QUESTIONS 1. What is the price that a purchaser has t pay fr prcurement flexibility? 2. Hw can supply be guaranteed in a perid f market shrtages? 3. What shuld the criteria be fr establishing lng-term cntracts? 4. What are the real risks f being withut marcnil fr Sabr? 5. Why are the suppliers interested in btaining lng-term cntracts? 6. What strategies are available t Ray Sles in this situatin? Grup 2: Erica Carsn Case 1-2 If yu were in the psitin f Erica Carsn, what actin, if any, wuld yu take regarding Killran s bid? 5

6 POSSIBLE DISCUSSION QUESTIONS 1. What imprtance is the check printing t the bank? 2. Hw wuld yu d a cst analysis n a check printing rder? 3. Hw wuld yu evaluate a supplier f check printing fr this bank? 4. Hw many suppliers are desirable fr check printing? 5. What alternatives are pen t Erica Carsn here? 6. What actin will yu take? Why? Grup 3: Iwa Elevatrs Case 3-1 If yu were in the psitin f Sctt McBride, what wuld be yur analysis f the situatin at Iwa Elevatrs and what wuld yu present at the executive management team meeting n June 11th? Include yur annual cst savings estimates, departmental budget and specific actin that yu wuld take t achieve yur bjectives. POSSIBLE DISCUSSION QUESTIONS 1. Where wuld yu start? With which f the purchase categries? 2. Hw much mney d yu think yu can save in each f the next five years? 3. What are the inventry turns fr farm supplies? What kind f imprvements can be made in inventry management and hw? 4. What changes wuld yu make t the rganizatin? 5. What are the risks t achieving yur bjectives? 6. Why hasn t Sctt McBride prpsed a cst reductin plan in the past? Grup 4: Russel Wisselink Case 9-2 (please read Trjan Technlgies case in chapter 14 as a backgrunder t this case) 1. As Russel Wisselink, what is yur assessment f the ptins available t yu regarding the pending shrtage f UV4 quartz sleeves frm Junta? 2. What wuld yu recmmend t Randy Haill cncerning the delivery prblem with Junta? 3. What changes, if any, wuld yu recmmend t Trjan s glbal surcing plicies? POSSIBLE DISCUSSION QUESTIONS 1. Are yu prepared t sign a ne year cntract with AMS? What is the cst cmpared t surcing frm Junta? 2. Hw can we prevent this prblem frm ccurring again with ther prducts? 6

7 3. Is it reasnable t expect Trjan s Nrth American suppliers t cme t their rescue when they have prblems with suppliers frm China? 4. Are the savings thrugh glbal surcing wrth the risks? What can Russel d differently t reduce the cmpany s risk expsure while still benefiting frm glbal surcing? 5. Wuld yu cntinue t d business with Junta? D yu think they knew abut the change in gvernment plicy in advance? Culd they have prvided mre warning? 6. Hw lng yu prepared t wait t see hw lng the gvernment ban lasts befre surcing sleeves in Nrth America? Grup 5: Marshall Insurance Cmpany Case As Kara Murphy, hw wuld yu respnd t the prpsal frm David Callum? Are yu prepared t prvide him the infrmatin he needs? 2. What criteria wuld yu use t evaluate the prpsal? 3. What cnditins, wuld yu place n the relatinship? POSSIBLE DISCUSSION QUESTIONS 1. What are the advantages f cntrlling kit assembly and printed materials inventry in-huse? What are the advantages f utsurcing? 2. Is kit assembly critical t MAC? 3. Is there anything wrng with Gilmre printing mst r all f the frms and prmtinal materials under and utsurcing arrangement? 4. What majr csts savings frm utsurcing? 5. What is yur reactin t David s estimate f $3 per kit? 6. What cnditins wuld yu place n Gilmre if yu were t prceed with utsurcing? Grup 6: Carsn Manr Case 6-3 If yu were in the psitin f Elaine Taylr, what wuld be yur analysis f this situatin? What actin wuld yu recmmend and why? POSSIBLE DISCUSSION QUESTIONS 1. Discuss the bjectives f this study and the rle f PSD in achieving them. 2. Evaluate the prpsals and recmmend a cnsultant fr selectin. Be prepared t justify yur chice. 3. Was the prcess used t slicit prpsals effective? If nt, hw culd it be imprved? GUEST SPEAKERS Guest speakers frm utside f the University may be making presentatins during the term. Materials discussed in these presentatins will be subject t examinatin. Students are encuraged t ask questin f the guest lecturer related t their particular firm and its strategic purchasing practices. 7

8 ATTENDANCE Students are expected t attend all classes and prepare ntes. Where grup presentatins r guest lectures are speaking, students are t arrive at class 5 minutes early. Attendance will be taken n thse days. Students wh fail t attend r are late t a guest lecturer r case presentatin may be dcked 5% f the curse ttal fr every such failure. If yu are unable t attend, apprpriate medical dcumentatin will result in the 5% grade deductin being waived. 10% f the final grade cnsists f participatin marks. Yu are encuraged t participate and t prvide a name tag fr yur desk. CLASS TESTS Class tests will measure students understanding f the cncepts cvered in lectures. Each test will cnsist f a series f true/false and multiple chice questins t be answered n a cmputer bubble sheet. Tests are nn cumulative in the sense that succeeding test will nt test specific material cvered n preceding tests. They are cumulative in the sense that material learned fr a test may depend n knwledge gained frm the material previusly tested. Fr example test 4 will nt test specific material cvered in tests 1, 2 and 3. Hwever, t understand the material cvered fr in test 4, a student will have t have gd knwledge f the material cvered in tests 1, 2 and 3. There is n final exam in this curse. Students may nt have pen (at the time f writing), any test in this curse: textbks, additinal ntes r ther extraneus material designed t supplement their wn knwledge f curse material. Students may nt have any electrnic equipment such as cell phnes, calculatrs, translatin devices turned n at their desks r expsed n the flr beneath their desk during tests. DEFERRED TESTS AND EXAMINATIONS: Deferred tests will nly be given if the instructr is advised within 3 wrking days f the test date and receives suitable dcumentatin including a Faculty f Management Medical Absenteeism Frm, which must be submitted t supprt absence due t illness. GRADING Grades will be assigned based n the fllwing scale: A+: 91% r greater, A: 84% t 90%, B+: 77% t 83%, B: 70% t 76% C+: 63% t 69%, C: 56% t 62%, D: 50%- 55%, F: 49% r less Grades will nt be curved. Grades will be determined based n the 4 tests and tw case presentatins as fllws: Tests: 65% f the ttal grade (Test 1= 15%, Test 2=15% Test 3=15%, Test 4=20%) Class participatin: 10% f the ttal grade Mini-case hand-in 10% f the ttal grade Grup presentatin and paper: 15% f the grade Ttal: 100% Sample Test Questin: 8

9 22.Which f the fllwing is a reasn t engage in bidding instead f negtiatin? A) When any f the five prerequisite criteria fr cmpetitive bidding are absent B) When many variable factrs bear nt nly n price but als n quality and service C) When the supplier is nt invlved in the design prcess D) When the business risks and csts cannt be predetermined E) When a custmer firm is cntracting fr a prtin f the seller's prductin capacity 9

10 COURSE SCHEDULE Class Activity sessin 1 Jan 18 Discussin f curse utline and case requirements, Intrductin t curse 2 Jan 23 Purchasing and Supply Management Chapter 1. 3 Jan 25 Supply Strategy, Chapter 2 4 Jan 30 Supply Organizatin, Chapter 3 5 Feb 1 Supply Prcesses and Technlgy, Chapter 4, 6 Feb 6 Make r Buy, Insurcing, and Outsurcing, Chapter 5 7 Feb 8 Test 1 8 Feb 13 Need Identificatin and Specificatin, Chapter 6 9 Feb 15 Quality, Chapter 7 10 Feb 20 Luis Riel Day n classes 11 Feb 22 Spring Break n classes 12 Feb 27 Quantity and Inventry, Chapter 8 13 Mar 1 Delivery, Chapter 9 14 Mar 6 Test 2 15 Mar 8 Price, Chapter Mar 13 Cst Management, Chapter 11 - hand in f first case 17 Mar 15 Chapter 12- Supplier Selectin Supplier Evaluatin 18 Mar 20 Supplier Relatins, Chapter Mar 22 Test 3 20 Mar 27 Glbal Supply Management, Chapter Mar 29 Special Guests frm Industry, discuss ethics prblems 22 Apr 3 Legal and Ethics, Chapter Apr 5 Other Supply Respnsibilities, Chapter 16, 24 Apr 10 Supply Functin Evaluatin & Trends Chapter Apr 12 Grup presentatins, Grups 1-6( t be drawn in class) 26 Apr 17 Grup presentatins, Grups 1-6( t be drawn in class) 27 Apr 19 Test 4 28 Apr 21 Final case hand in- f grup presentatins 29 10