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Problem
#74695

Planning & Sourcing

Your efforts with Midland Hospital have paid off! The corporation has hired SPI and your staff to provide supply chain management consulting services. Your team has begun analyzing the existing processes, and you've been tasked with developing the purchasing policies and procedures, with focus on ethics in the supply chain.

Remember: from a supply chain management perspective, a company produces services or products. Clearly, Midland Hospital produces a service. This means that sourcing analysis must consider the raw materials necessary for producing this service (e.g., bandages, needles, blood, and medical equipment).

Using course materials and other resources, develop a paper for the hospital management consisting of the following sections:

1)  Discuss the importance of identifying the best suppliers by explaining the impact of source selection on supply chain performance.

2)  In conjunction with #1, discuss whether the hospital will insource or outsource its sourcing needs.

3)  Develop a high-level ethics policy for the purchasing department at Midland Hospital, identifying general responsibilities and prohibited behaviors.

Thanks, please see attachment!  

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scenario.doc
Scenario:

Congratulations on your recent promotion to Engagement Manager for
Strategic Procurements, Incorporated. Your new role will leverage your
skills in supply chain management consulting, logistics, and procurement
for various industries, which will offer many challenging opportunities.


In 1985, Drake Porter founded Strategic Procurements (SPI), a 120-person
consulting firm based in Louisville, Kentucky, with a core group of four
procurement specialists and a client base of one automobile parts supply
chain. Since then, Strategic Procurements has expanded its client base
to other auto supply store chains, as well as specialty retail stores
across the nation. In 1994, Strategic Procurements developed a
proprietary niche software application called PlanTranstic that is used
for inventory planning and forecasting for the auto supply store
industry. Strategic Procurements' mission is to facilitate the
development and implementation of procurement strategies that reduce
delivery time, inventory cycle times, and costs associated with supply
chain management for its customers.

To accomplish its mission, Strategic Procurements is structured into two
core consulting areas represented by a sales force led by the engagement
manager. The core consulting areas are responsible for executing the
assigned project work and generating possible leads for follow-up by the
engagement team. The engagement team is responsible for expanding the
current workload with existing customers and nurturing new
opportunities. The engagement team and consulting areas often exchange
personnel, as one group or another often requires specific, key
expertise in supporting a client. The two core areas are auto parts
supply and specialty retail. The auto part supply group has 55 people,
including a technology team that supports PlanTranstic. The specialty
retail group has 24 staff members, while the engagement team is staffed
with 10 sales and logistics experts. Strategic Procurements consultants
primarily work on a time and materials basis, with a few fixed price
contracts, depending on the nature and duration of the work. The
majority of projects are six months to a year in duration, with a mix of
on-site (customer location) and home office work. The deliverables for
these efforts are studies or analyses with key recommendations for
improving the client's supply chain management situation. The project
team will often identify technology tools, as well as recommend specific
strategies for the client. Additionally, the PlanTranstic software is
customized for specific customers where appropriate.

The engagement team is primarily focused on keeping the auto parts and
specialty retail pipeline filled with consulting projects. Yesterday,
Drake Porter approached you and requested a briefing on the two-year
plan for these core areas. Additionally, he wanted to know how prepared
Strategic Procurements is to expand their industry opportunities.
Specifically, Drake wants to extend Strategic Procurements' SCM
expertise to the medical consulting area, as well as develop expertise
in the industrial manufacturing industry. Are these viable areas, and
would Strategic Procurements' capabilities translate well into these
areas? You've agreed to examine these possibilities and meet with
existing and new clients to better understand the industry needs.
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