Referencing Styles : Harvard MOTOMES GROUP The Motomes Group manufactures a high-quality range of caravans. Seven months ago, it recruited a new engineering design manager who initiated a design review of the whole range of caravans. This has led to significant changes to the bills of materials for each product within the range. At a recent trade show at the Birmingham International Exhibition Centre, the new range was shown to trade buyers. The demand has been exceptional and the current year’s sales are already showing an increase of 24 per cent. This has led to the five-year business plan being revised. Year-on-year, sales are predicted to carry on rising by at least 15 per cent. The managing director called a senior management meeting which included you as the procurement manager.The meeting dealt with the increase in production and its impact on existing skills and manufacturing facilities and the discussion then focused on procurement issues. The engineering design manager voiced the view that, given the increase in quantities, the purchase prices should ‘come tumbling down’. He mentioned the learning curve as being very relevant and proposed that your department immediately undertake an investigation into how the purchase prices could be dramatically reduced. This point was supported by the managing director. The manufacturing manager then said that some existing manufacturing lines would have to be outsourced because he could not create the necessary production facilities in the available time. The Motomes Group has never previously outsourced and has seen no requirement for any form of electronic purchasing infrastructure. However, an internal group is well advanced with the development of an EBS (Enterprise Business System) and this is your opportunity to state a case for e-Procurement. The managing director has asked you to prepare a report to deal with the outsourcing actions and the managing director understands this will be a major challenge for you and your department. You have promised within a month, you will have a report on the purchasing strategy for the nominated 10 lines to be outsourced as declared by the manufacturing manager. Questions: Using the facts presented above for Motomes Group, write a 3000-word (+/- 300 words) business report which addresses the following questions: 1. Write a business Executive Summary that provides a clear and concise summary of the major points of the report. 2. Present the actions you would include in the project plan to ensure your department's capability to deliver effective strategic procurement. 3. Explain the theory of ‘make or buy’ and ‘outsourcing’ and state which theory (or it may be both) you are going to use and why. 4. Using Kraljik’s procurement model, assess the importance of the ‘ten (10) lines with considerable sub-assembly work’. 5. Define Supply Relationship Management (SRM) and explain how technology enhances SRM. 6. Having considered your position, make detailed recommendations to the managing director. Note that this is to presented as a Business Report (do not include the above 6 points as headings in your report); and with the following structure adopted: Executive Summary This section provides a 500 (+/- 10%) word summary of the major points of the report. You are required to write this as a Business Report specific for Motomes Group and it will NOT include any academic references or new work; it is a summary of your report. The purpose of an Executive Summary is to enable the reader to understand the pertinent elements of the report being methodology and findings, at a glance, without having to read the whole report. The recommendations of your academic research will be summarised here as action points, without the detail of your research, or references, all of which are provided in the body of the report. At the end of this section, provide a word count of the Executive Summary. Project Plan You need to develop an overall project plan (this is NOT the Outsourcing Strategy as this topic is covered in the next section). Topics that could be considered may include (but are not limited to), procurement strategy, structure of the procurement division, teams, partnering, adoption of electronic support, buying from overseas, etc. This is your opportunity to advise the managing director how you want to set up the structure and actions of your department. 'Make or Buy' or 'Outsourcing' Strategy Your department is going to grow and there is little time to think about strategy, so you need to learn fast. The decision to ‘Make or Buy’ and/or ‘Outsource’ is very complex and these theories are supported by robust academic research that includes both a commonality and a distinction between these two theories. As we do not know in detail about the ’10 lines’ other than they include sub-assemblies, academic theory will enable you to develop the strategy on what you are going to do and why. Explain using the theory why and how you are going to implement a ‘make or buy’ and/or an ‘outsourcing’ strategy and clearly state which strategy you will use. Kraljik Procurement Model Research the Kraljik (Note: some academic sources also spell as Kraljic) model using at least 2 most recent academic journal articles (published within the last five years) and apply the model to the case study. You will need to draw the model as part of your explanation (graphical brilliance not required) and position the ’10 lines’ as a collective described as ’10 lines’ on the model. You will use the academic research to support your explanation of the positioning on the model. It is advised that you adopt the Kraljik model published in academic journals (and the course content), rather than those found on the internet using Google Search. Internet models will not be acceptable for this assessment.. Supply Relationship Management (SRM) The 21st century model of SRM mandates the relationship between buyer and supplier be increasingly conceived as a collaborative partnership. Explain SRM and provide detail of how your e-Procurement strategy will enhance SRM. Recommendations This section will outline your recommendations to the managing director on your strategy and will contain NO new work or references. This is a list of your recommendations as to your strategic direction. Merely providing ‘bullet points’ is not sufficient; you will need to structure this section with an opening statement, the recommendation/s with a statement (brief) as to reasoning for the recommendation/s and a summary statement to close off the whole report. Conciseness is important in this section. Word Count At the end, please provide a word count (excluding the Executive Summary, Reference list or any figures/diagrams). Reference List All references must be listed in accordance with the UniSA Harvard Referencing guide Requirements for Assessment 2: Use Arial Font size 12 with 1.5 line spacing. Reference list on a separate page after recommendations. Use the UniSA Harvard Style of referencing only. Do NOT use footnotes. Print your name and student ID in a header on each page. Number each page. Do not include the Cover Page or Feedback form in your submission. Marking criteria and standards: The report will be assessed on the following criteria: Understanding of the procurement issues. Application of procurement theory and model to the case study. Critical analysis. Recommendations. Presentation and referencing. Executive summary and understanding of the issues (25 marks) Project Plan (15 marks) Explanation of the strategy ('make or buy' or 'outsourcing') to be adopted (15 marks) Application of the Kraljik procurement model (10 marks) Effective research on SRM (15 marks) Recommendations (10 Marks) Referencing and presentation (10 marks) TOTAL 100 marks