Milestone Seven - The Improve and Control PhasesRoot cause identified:
The case is about the ABC Pvt. Ltd which manufactures the cement. The organization needs to improve the purchasing procedure, and the loopholes are discussed in detail which is the actual root cause. The basic problem is the requirement of the cement is fixed in the marketplace, and it is easily affected by the economic situation of the country. Hence, it is difficult for the purchase manager to calculate the requirement of the material as well as to predict the requirement of the cement.
In the given case, the company follows the past trend of the purchasing but does not follow the requirement of the cement. Another root cause in the given case is, the company does not have any identified group members in the procedure of the purchase those who are responsible for the complete system. The accountability is on an individual, and he has to look after the entire system, and in this case, he is unable to handle the complete structure efficiently alone.
The main root cause I realized in the given case is that material suppliers are not advised by the organization to offer the estimate of the material. The Company also chooses the suppliers without doing any kind of market research as well as do not check quotation of the competitors. As the organization does not have any assigned team for controlling the purchasing system they do not prepare any budget also and it leads to the problem of losing the control over the cost of purchase. Organization does not keep any kind of record of purchase, and they order without keeping any kind of records.
(Nathan, n.d.)
Plan to improve the process:
The organization must follow the procedure where they should have a specific team dedicated to maintaining the system of the purchase order. The beginning point of purchase procedure is the need obtained from user section who utilizes the substance brought. After getting the categorize, it is moved to store section those who accumulate the products, if the collection has needed the amount of substance then no buy will be done however on the another side if the collection is not obtainable store section will support the order obtained. Purchases sections of receiving of order inquire for the quote from different suppliers at the confirmed cost as well as then suitable suppliers are chosen for a supply of necessary product.
Attachment:- Assignment.rar