2 a) I ) Grower - Many farmers and ranchers provide fresh food and floral products to the hospitality

industry.

Ii ) Manufacturer - Controls the production of an item from raw materials. For example, a paper
products manufacturer can take wood materials and create paper napkins, bags, and placemats.

iii) Processor - Sometimes referred to as a "fabricator," takes one or more foods and assembles them
into a new end product. For example, a processor could combine flour, water, yeast, tomato sauce,
cheese, and seasonings to produce frozen pizzas. This new end product is usually referred to as a
"convenience," "efficiency," or "value-added" food. Some processors are also manufacturers, but not all
manufacturers are processors. The difference is that processors always work with food products.

B) List SIX (6) important factors that need the attention from the Purchasing manager when

performing the purchasing activities.

I) Supplier Analysis

The starting point for strategic purchasing is to benchmark how the business is currently performing,
how resources are being used, and what the purchasing costs are per department, team or job function.
The purchase manager will then look at the company's growth trajectory and come up with a plan to
help the business perform better and/ or save costs.

At the same time, the purchasing manager will analyze the supplier's market to see if the company is
using the right supplier, at the right price point, to meet its business needs. The team might compare
multiple suppliers, including those based in other countries, to prepare a shortlist of possible suppliers.

II) Ordering and Inventory Control

It's essential to have the right quantities of raw materials in the warehouse or the right quantities of
products on the shelf at exactly the time when the customer walks through the door. Running out of
products means you lose sales, and your customers may turn to competitors to get the products they
need. Overstocking means you potentially will have to pay more in storage costs, and you run the risk of
the product becoming obsolete before you have the opportunity to use or sell it.

Generally, the purchasing manager will have systems in place which trigger a stock order whenever a
certain quantity of inventory is reached. For those that use a merchandise management system, the
minimum stock and the order quantity are generally predefined and are automatically ordered by the
software.
 III) Quality Control

Quality control is an essential part of the procurement process. The purchase manager needs to
continually inspect the quality, performance and reliability of the supplier to ensure they do not lapse
into complacency. For suppliers in other countries, this might include monitoring workers' right,
compensation and working conditions. It's important to be clear where accountability lies.

IV) Best Possible Price

A purchasing manager also is charged with continuously evaluating whether it is receiving these
materials at the best possible price in order to maximize profitability. This can be challenging for a small
business that may purchase in lesser quantities than a larger vendor and which thus may not receive the
same type of bulk discounts. A purchasing department in a small business needs to shop around to find
the best vendors at the most reasonable prices for the company's particular size orders.
 Section B
1. Receiving, storage, and preparation are all important sections of a food safety flow chart and
receiving of products is your first step when developing a flow chart. The following are
important elements to consider when receiving products in general. Each group of food,
whether dry foods, dairy products, fresh produce, or meats, requires a slightly different
procedure. No matter what the product type, the principal component in a receiving procedure
is accuracy. Any carelessness or half-hearted attempts at checking the delivery will render the
whole process useless. Decide whether a well-planned receiving program contribute to cost and
quality control for foodservice

A well designed receiving process is important to cost and quality control, and warrants careful planning
and implementation:

 Coordination with other departments

Purchasing, production, and accounting are three key areas that need a well defined working
relationship with receiving personnel

 Personnel

Qualifications of the receiving clerk should include knowledge of food quality standards, written
specifications, and documentation procedures

 Facilities, equipment, and sanitation

A well-planned receiving area should be close to the delivery docks and storage. Cleaning and sanitation
procedures for the receiving area should be defined by policy.

 Scheduled hours for receiving

The purpose of defined receiving times is to avoid the busiest production times.

 Security

Unauthorized personnel should not have access to the receiving area.

 2. The hotel industry is a huge industry which has a global footprint. Thus, the purchasing
and supply management in the hotel industry can be extremely complicated especially
for the large hotel chains. As a manager, you need to think on how to establish strategy
when you are facing with these situations:  Do you know what are the requirements of
your hotel for the next year?  How many blankets would be required to be replaced? 
What about the cutleries?  How much perishable goods would be required based on
occupancy forecast?  What is inflation like, and will the prices change in the future for
the products?  Who are the suppliers and are they reliable? As you know, procurement
is one of the keys and one of the most important tenets of overall purchasing and
supply management. Therefore, discuss FIVE (5) elements on how the hotel industry
could execute best practices in the procurement.
Answer :
Procurement practices are used in the logistics and supply chain industry to support operational
needs of the company by focusing on how purchasing is done, how the product is received from
suppliers, building relationships with vendors and managing the procurement process by
identifying opportunities and managing internal operation.

i) Distribution Management

The role of distribution management is to get the right goods, to the right customer, at the right time.
Distribution management is used as a strategy to minimize the transportation costs required to move
goods from its network of suppliers to the company for consolidation, before being sent to the customer
Retailers like Target continue to build distribution centers at strategic locations .Target uses its
distribution management to supply a majority of its inventory to its stores, which helps provide
replenishment faster.

The hotels make sure they frequently monitor picking operations which involves selecting foods orders
for the chef, special request from guest, and for various restaurants in the property, throughout each
shift and make needed adjustments, like moving pickers from full pallets to case picking depending on
the workload. Anytime products are moved in the warehouse, they make sure the move is reflected by a
transaction. This helps prevent any integrity issues with the inventory and also implemented a cycle
count program to help eliminate physically taking inventory count which has helped them in the area of
costs saving and time,

ii) Logistics Management

Logistics management practices focus on areas like transportation management and picking of orders.
Effective logistics management operations lead to a higher revenue flow, costs structure improvements,
and reduction in transportation costs if all operations are streamlined correctly. The integration of
operations with suppliers has helped hotel properties achieve the utmost throughput and highest
efficiency, in the least amount of time. Another key factor working with suppliers has helped provide
products designed for easy management within their facility due to issues like space and staffing.
 iii) Inventory Management

Inventory management practices help companies place orders accurately as well as maintain different
assortments of products and supplies. Inventory management systems are used to create reports and
track costs on which suppliers and vendors have the best costs as well as used to reconcile or adjust
inventory after physical counts. Inventory management strategy is to stay well stocked with the supplies
and products they need to run their operation since this helps provide consistent service to their
clientele. Their strategy focuses on keeping a proactive eye on usage and communication on a regular
basis with their internal and external customers. Inventory management practice of buying what they
need depending on its use, which helps establish a correct par-level based on their 72 hour forecasting.
The company continues to update its inventory management systems to do different things like track
sales and available inventory, and as well as communicate with suppliers in realtime. Also to ensure that
costs arising from inventory are minimized, they have adopted the first in-first out (FIFO) inventory
policy.

iv) Green Supply Chain

Green supply chain focuses on how companies require their suppliers and distribution partners to
deliver final products in areas of manufacturing, transportation, and saving money by optimizing with
green solutions. Green supply chain management in the hotel industry can be seen in three different
areas; procurement, manufacturing, and distribution activities. These days green supply chain is an
important logistics and supply chain strategy, that helps companies achieve profit and market share by
using green practices

v) Information Technology

Information technology practices focus on the information available within the supply chain. Companies
integrate and use multiple systems to distribute information about customer orders electronically which
help to save costs. For example, information technology has changed the manner in which businesses
interact with suppliers and customers.
 3. A large set of activities besides purchasing is part of supply chain management. Each of these
seemingly diverse activities has one important feature in common— it is part of a network that
will define how efficiently and effectively goods and information flow across a supply chain.
Deliberate the activities that are known as elements of the concept called supply chain
management.

ANSWER :

Supply chain management is the management of the flow of goods and services and includes all
processes that transform raw materials into final products. It involves the active streamlining of a
business's supply-side activities to maximize customer value and gain a competitive advantage in the
marketplace. SCM represents an effort by suppliers to develop and implement supply chains that are as
efficient and economical as possible. Supply chains cover everything from production to product
development to the information systems needed to direct these undertakings.

Typically, SCM attempts to centrally control or link the production, shipment, and distribution of a
product. By managing the supply chain, companies are able to cut excess costs and deliver products to
the consumer faster. This is done by keeping tighter control of internal inventories, internal
production, distribution, sales, and the inventories of company vendors.

SCM is based on the idea that nearly every product that comes to market results from the efforts of
various organizations that make up a supply chain. Although supply chains have existed for ages, most
companies have only recently paid attention to them as a value-add to their operations.

In SCM, the supply chain manager coordinates the logistics of all aspects of the supply chain which
consists of five parts:

 The plan or strategy

 The source (of raw materials or services)

 Manufacturing (focused on productivity and efficiency)

 Delivery and logistics

 The return system (for defective or unwanted products)

The supply chain manager tries to minimize shortages and keep costs down. The job is not only about
logistics and purchasing inventory. According to Salary.com, supply chain managers, “make
recommendations to improve productivity, quality, and efficiency of operations.”
Improvements in productivity and efficiency go straight to the bottom line of a company and have a real
and lasting impact. Good supply chain management keeps companies out of the headlines and away
from expensive recalls and lawsuits.

Supply chain management is often described as having five key elements: planning, sourcing of raw
materials, manufacturing, delivery, and returns. The planning phase refers to developing an overall
strategy for the supply chain, while the other four elements specialize in the key requirements for
executing on that plan. Companies must develop expertise in all five elements in order to have an
efficient supply chain and avoid expensive bottlenecks.

4. Create a model on the relationship of purchasing and supply operations with supplier
management. Discuss in depth about your model and support with the literature reviews from
the journal articles.

Answer :

Model for Developing and Implementing Successful Supply Chain Relationships:

For purposes of illustration, let us assume that the model is being applied from the perspective of a
manufacturing firm, as it considers the possibility of forming a supplier relationship management with a
supplier of logistics services (e.g., transport firm, ware¬houseman, etc.).

Step 1: Perform Strategic Assessment

This first stage involves the process by which the manufacturer becomes fully aware of its logistics and
supply chain needs and the overall strategies that will guide its opera-lions. Essentially, this is what is
involved in the conduct of a logistics audit, The types of information that may become available as a
result of the audit include the following:

 Overall business goals and objectives, including those from a corporate, divisional, or logistics
perspective.

 Needs assessment to include requirements of customers, suppliers, and key logistics providers.

 Identification and analysis of strategic environmental factors and industry trends.

 Profile of current logistics network and the firm’s positioning in respective supply chains.

 Benchmark, or target, values for logistics costs and key performance measurements.

 Identification of “gaps” between current and desired measures of logistics performance

(qualitative and quantitative).

Given the significance of most logistics and supply chain relationship decisions, and the potential
complexity of the overall process, any time taken at the outset to gain an understanding of one’s needs
is well spent.

Step 2: Decision to Form Relationship

Depending on the type of supplier relationship management being considered by the manufacturing
firm under consideration, this step may take on a slightly different decision context. When the decision
relates to using an external provider of logistics services (e.g., trucking firm, express logistics provider,
third-party logistics provider), the first question is whether or not the provider’s services will be needed.
A suggested approach to making this decision is to make a careful assessment of the areas in which the
manufacturing firm appears to have core competency. For a firm to have core competency in any given
area, it is necessary to have expertise, strategic fit, and ability to invest. The absence of any one or more
of these may suggest that the services of an external provider are appropriate.

If the relationship decision involves a channel partner such as a supplier or customer, the focus is not so
much on whether or not to have a relationship but on what type of relationship will work best. In either
case, the question as to what type of relationship is most appropriate is one that is very important to
answer. Lambert, Ernmelhainz, and Gardner have conducted significant research into the topic of how
to determine whether a partnership is warranted and, if so, what kind of partnership should be
considered. Their partnership model incorporates the identification of “drivers” and “facilitators” of a
relationship; it indicates that for a relationship to have a high likelihood of success, the right drivers and
facilitators should be present.

Drivers are defined as “compelling reasons to partner.” For a supplier relationship management to be
successful, the theory of the model is that all parties “must believe that they will receive significant
benefits in one or more areas and that these benefits would not be possible without a partnership.”
Drivers are strategic factors that may result in a competitive advantage and may help to determine the
appropriate type of business relationship. Although other factors may certainly be considered, the
primary drivers include the following:

 Asset/Cost efficiency.

 Customer service.

 Marketing advantage.

 Profit stability/Growth.

Facilitators are defined as “supportive corporate environmental factors that enhance partnership
growth and development.” As such, they are the factors that, if present, can help to ensure the success
of the supplier relationship management. Included among the main types of facilitators are the
following:

 Corporate compatibility.

 Management philosophy and techniques.

 Mutuality of commitment to relationship formation.

 Symmetry on key factors such as relative size, financial strength, and so on.

In addition, a number of additional factors have been identified as keys to successful relationships.
Included are factors such as exclusivity, shared competitors, physical proximity, prior history of working
with a partner or the partner, and a shared high-value end user.
Step 3: Evaluate Alternatives.

Although the details are not included here, Lambert and his colleagues suggest a method for measuring
and weighting the drivers and facilitators that we have discussed. Then, they discuss a methodology by
which the apparent levels of drivers and facilitators may suggest the most appropriate type of
relationship to consider. If neither the drivers nor the facilitators seem to be present, then the
recommendation would be for the relationship to be more transactional, or “arm’s length” in nature.
Alternatively, when all parties to the relationship share common drivers, and when the facilitating
factors seem to be present, then a more structured, formal supplier relationship management may be
justified.

In addition to utilization of the partnership formation process, it is important to conduct a thorough

assessment of the manufacturing company’s needs and priorities in comparison with the capabilities of
each potential partner. This task should be supported with not only the availability of critical
measurements and so on, but also the results of personal interviews and discussions with the most likely
potential partners. Although logistics executives and managers usually have significant involvement in
the decision to form logistics and supply chain relationships, it is frequently advantageous to involve
other corporate managers in the overall selection process. Representatives of marketing, finance,
manufacturing, human resources, and information systems, for example, frequently have valuable
perspectives to contribute to the discussion and analysis. Thus, it is important to ensure a broad
representation and involvement of people throughout the company in the partnership formation and
partner selection decisions.

Step 4: Select Partners.

While this stage is of critical concern to the customer, the selection of a logistics or supply chain partner
should be made only following very close consideration of the credentials of the most likely candidates.
Also, it is highly advisable to interact with and get to know the final candidates on a professionally
intimate basis. As was indicated in the discussion of Step 3, a number of executives will likely play key
roles in the supplier relationship management formation process. It is important to achieve consensus
on the final selection decision to create a significant degree of “buy-in” and agreement among those
involved. Due to the strategic significance of the decision to form a logistics or supply chain
relationships, it is essential to ensure that everyone has a consistent understanding of the decision that
has been made and a consistent expectation of what to expect from the firm that has been selected.

Step 5: Structure Operating Model.

The structure of the relationship refers to the activities, processes, and priorities that will be used to
build and sustain the relationship. As suggested by Lambert and his colleagues, components “make the
relationship operational and help managers create the benefits of partnering.”5 Components of the
operating model may include the following.

 Planning.

 Joint operating controls.

 Communication.

 Risk/Reward sharing.
  Trust and commitment.

 Contract style.

 Scope of the relationship.

 Financial investment.

Step 6: Implementation and Continuous Improvement

Once the decision to form a supplier relationship management has been made and the structural
elements of the relationship identified, it is important to recognize that the most challenging step in the
relationship process has just begun. Depending on the complexity of the new relationship, the overall
implementation process may be relatively short, or it may be extended over a longer period. If the
situation involves significant change to and restructuring of the manufacturing firm’s logistics or supply
chain network, for example, full implementation may take longer to accomplish. In a situation where the
degree of change is more modest, the time needed for successful implementation may be abbreviated.

Finally, the future success of the supplier relationship management will be a direct function of the ability
of the involved organizations to achieve both continuous and breakthrough improvement. Several steps
should be considered in the continuous improvement process. In addition, efforts should be directed to
creating the breakthrough, or “paradigm-shifting,” type of improvement that is essential to enhance the
functioning of the relationship and the market positioning of the organizations involved.

Reference :

Cooper, M. C., Lambert, D. M., & Pagh, J. D. (1997). Supply chain management: more than a new name
for logistics. The international journal of logistics management, 8(1), 1-14.

Mentzer, J. T., Min, S., & Zacharia, Z. G. (2000). The nature of interfirm partnering in supply chain
management. Journal of retailing, 76(4), 549-568.