Case3-1 Iowa Elevator

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Case 3-1: Iowa Elevators Name: _xiaoxia Li Group: __6_ Date: ___02/01/2013___ ------------------------------------------------- Situation: * Scott McBride, director of purchasing at Iowa Elevators, prepared for a meeting with the executive management team to present a five-year plan for the purchasing department. * Iowa is a large grain-handling company with annual revenues of $2.3 billion and more than 2,500 employees. * Two business units are grain-handling and marketing division and the farm supplies division. * Grain-handling and marketing division operates approximately 300 grain elevators in Midwest and represented approximately 75% of total company revenues which has declined by 20%. * Farm supplies division has doubled its revenue over the past five years, but operating margins had remained flat. * Most recent fiscal year; loss of $11 million and sharp decline in working capital due to lower volume and increased completion in its grain-handling and marketing division. * The data collection focused on two questions: * How much money did Iowa Elevators spend with its outside suppliers? * How much inventory did the company carry? * 1,500 suppliers, with 20 accounting for 45% of the total spend and the top five representing 35% * Farm supplies inventory of $120 million with annual purchases of $310 million * Plan must reduce cost and increase profitability Basic Issue: 1. managing organizational change in supply 2. managing direct and indirect spend 3. Sourcing and commodity management 4. teaming for supply management 5. Supply research 6. Supply strategy 7. Human resources requirements 8. Change management 9. Project planning 10. Inventory management 11. Tactical planning 12. Turnaround management 13. Transition planning 14.
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