Word Count : 3000 words
Learning Outcomes to be Assessed:
- Evaluate common challenges faced by procurement and supply chain managers and how to overcome them.
- Appraise main contracting issues and the legal implications for major programmes and projects for successful completion.
- Critique the main legal issues that relate to the formation of relationships in supply chains.
JDPi Automotive Manufacturer
JDPi is an automotive manufacturer and it has been operating a particular IT system for the
past 5 years for some of its administration and payment arrangements. More recently
though, it has been hit by an increasing frequency of system breakdowns and consequent
periods of down-time. This has led to increasing loss of data and de-motivation of operating
staff.
JDPi has decided to replace the existing system with the latest version. A business case
was produced and approved at the appropriate levels of management. The supplier who
had sold JDPi the existing system (Capgemini UK PLC) was asked to provide a feasibility
study to assess how the system could be upgraded with a view to several objectives being
satisfied, namely:
• Significant (and measurable) improvements in its general efficiency/effectiveness
• Response times being speeded up considerably
• Integration with other IT systems operating within the company to allow for sharing of information internally and externally with several suppliers and customers.
The head of procurement, Ben Clegg, has formally stated that a competitive tendering exercise should be done to create a competition for the new software in accordance with JDPi’s procurement policy. A dispute between the head of human resources and Ben has arisen as the head of human resources was unable to understand why JDPi cannot negotiate a deal with Capgemini UK PLC and why there is a need to delay things so that
other quotes can be received.
Ben replied that ‘It is our normal policy for purchases costing in excess of $5,000, which this will be on a yearly basis, to run a competition between suppliers. This ensures we have a proper, fair competition in accordance with our procedures. I will need your help in developing a plan for sourcing this service from interested suppliers as we will need to create appropriate selection criteria that prequalifies interested suppliers. We also need to
create award criteria as we should consider other factors in addition to the price for licensing the software. We should then operate a competitive tendering process in our normal way and ensure compliance with any necessary technical standards such as data protection.The stakeholders of JDPi have indicated that they will support the new tendering exercise as they have heard about an e-auction (reverse auction) system which is used to obtain bids on
line and believe that this could save valuable time.
Refernce : BU Harvard