Conglomerate Essay

Materials manager at Captiva Conglomerate, A1 Carpenter, is holding a meeting with his Inventory and Spares manager, Sam, his Supply manager, Aaron, vice president of Operations, Jason, vice president of Finance, Monica, and director of Information Technology, Jana, to discuss the contract with SOS for an inventory management and spare parts management system. – Sam, from Inventory and Spares, believes the spare parts system is not useable for him and his personnel, plus the delivery of the system is four months behind schedule. The information technology department believes the system works great from the perspective of Jim. – The inventory management system is 10 months behind schedule and repercussions towards the supplier are minimal due to a lenient and poorly written contract, which stated verbiage such as â€Å"best efforts† and â€Å"whenever possible. † – The contract with SOS has used the entirety of the $1 M allotted, even though the supplier has accepted 17 unpriced change orders. Jason, from Operations, specifies that the new system ould provide him better support, uptime, and cut inventory while providing improved support. – The question about who wrote the specification for the contracts is brought up and it is pointed out by Aaron, from Supply, that they were drafted by the supplier and initialed by Jana, from Information Technology Can Captiva Conglomerate produce better written and produced specifications, solving the problem of poorly written contracts, by implementing cross functional teams integrated by the pertinent members of all areas of the organization involved in the respective procurement? Best Solution: Establish a multi-functional team to include the purchasing manager, finance, a legal representative, IT, operations, and inventory & spares to come up with a plan and strategy to definitize and clear up the SOS contract requirements. After this is ccomplished, re-engage with SOS to establish the new clear path for moving forward through a new agreement in order to achieve the deliverables needed by Captiva. Immediately following, a standard operating procedure would be created to establish guidance on putting together multifunctional teams for any major acquisition. Advantages: Clearing up the requirement documents will help Captive achieve the desired results it was looking for through the contract with SOS. – This approach will also help establish a firm and final price for the deliverables needed. Involving all epartments in the acquisition process aids in establishing realistic lead times, improved specification writing, and proper financial planning. – Creating a standard operating procedure will avoid the mistakes of the SOS contract in the future. – Multifunctional teams create an environment of efficiency and effectiveness for solving large problems or tackling complex large requireme nts. Disadvantages: Additional time, resources, and cost will be incurred to clear the mess Captiva currently has. – The contract with SOS will require additional funding in order to eceive the final deliverables. Additional coordination with other departments will require additional effort. – There is always risk in trying to enter a new agreement with SOS and resistance could be encountered without a guaranteed result. Alternate Solution: Establish a new training on the approach towards new acquisitions and who should be involved in the process. Centralize the procurement process in Captiva, as it seems that the acquisition of the system through SOS was done solely by the Information Technology department and the president. Provide additional funding to the SOS contract in an attempt to finalize it. Advantages: New conditions will improve the writing of specifications and statements of work. – The centralization of purchasing will produce specialization and better accountability of procurements. – The current goal is still to receive both deliverables from SOS, while maintaining a good working relationship. Disadvantages: Cost of completing the contract will continue to increase as no set path to fixing it has been established. – Time and cost of establishing a new training program