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Memo

To: From: Date: RE:

Aung Kyaw Moe Francois Damba 29 May 2013

TASK 6 PROCUREMENT

Report on supplier capabilities


After analysing the information we get from the suppliers, we can see their various facets in the following table of comparison.

Supplier A Type of Supplier Small Manufacturing Company

Supplier B national manufacturing company

Supplier C seller of a wide range of food products head office in Chagong and it has warehouses in Dhetra, Chagong and Jumna Port Trading Company

Supplier D international manufacturing company

Location

Rajpur

Dhetra

based in Homeland

Ownership

Family owned

Local Company

Int'l Company The original company, which manufactured sugar, was started in 1950; the current company was set up in 1985

Established since

30 years ago

Production Site

Small factory at the centre of town

three factories on the edge of the town

It buys and imports the products from a range of different manufacturers. These manufacturers are based both in Betaland and in other Countries in the region

It has two factories in Betaland, one in Teni, manufacturing sugar and the other in Dhetra, manufacturing dyes. It has two factories in Deltaland manufacturing salt and sugar, one factory in Alphaland manufacturing dyes and three factories in Homeland manufacturing salt, sugar and dyes.

Type of Production

Labour intensive/ local labour force

The factories are modern and the operation is gradually being automated to reduce labour costs and to improve efficiency

holds small quantities of the full range of its products at each of the warehouses but it will also accept orders for larger quantities of product, which it will then source from a manufacturer.

High Tech Modern way of production

Sourcing of Raw Materials

The sugar cane is supplied by local farmers and the company have annual contracts with these farmers to ensure a constant regular supply.

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Ranges of Supplies

crushing and grinding of rock salt to make a range of common salt and edible salt products

Main Customers

shops and wholesalers in the Rajpur area and also to shops in the eastern suburbs of Dhetra

wide range of products including salt, sugar and spicesSalt products include refined salt, common salt, free flow iodised salt , industrial salt and iodized salt The company supplies products in bulk to wholesalers and to industries throughout Betaland service and delivery is very good but there have been rumours that they have had some quality issues with the salt products

wide range of food products including salt, flour, sugar , rice and spices

high quality Iodised Edible Salt/ Table Salt and Industrial Salt. The products include Edible Salt, Iodised Edible Salt, Common Salt, Iodised Common Salt, Industrial Salt, Free Flow Salt.

Business Image

very good reputation for quality, reliability and service

has a good reputation for supplying good quality products at low prices

The company prides itself in producing high quality products in safe and hygienic factories; with the majority of the products being sold to large industrial and commercial companies. It has not supplied humanitarian aid organisations but you understand that they have been asked to tender for supplying humanitarian aid organisations in the past.

Experience with NGOs

have in the past supplied salt to local NGOs in Betaland.

no experience of supplying to humanitarian aid organisations.

The local NGO in Mugla has had experience of using this supplier for supplying small quantities of rice. They were happy with the price and service they got from the supplier

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Analysis of Information Supplier A Finding Supplier A is just a family owned small scale manufacturing business that was established since 30 years ago. Their way of production is not high-tech based and it is mainly labour intensive because the labour force is cheaply available in the country. They produce very basic level of salt by means of crushing and
grinding of rock salt to make a range of common salt and edible salt products.

Recommendation Although Supplier A has very good reputation for quality, reliability and service, it has the limited capacity and if we
want large scale supplies, this company is not a right choice. Supplier B

Finding This supplier is better than previous one since it is a national manufacturing company that produce
a wide range of products including salt, sugar and spices. This company mainly based itself in Dhetra and has three factories on the edge of the town. So its production capacity is recognizable and seems to be reliable. This company has the largest crushing capacity in Betaland and the company procures its raw materials from local farmers by Annual Purchase Contracts, so it can safeguard the availability of sugarcane for the whole year. Since 5 years ago, it started producing spices, and then within 2 years it grows to produce sugar products and in this year it can establish a salt manufacturing factory. So we can estimate that this company is financially growing and expend a lot. In terms of production, it starts to reduce the labour cost and moving to modernize its production technology gradually.

Recommendation Although this company has no experience of dealing with humanitarian organization, we can see that this company is surely potential supplier for us. We heard that it has reputation for service and but the quality of its products, especially salt products, is not very sure. We have to clarify more about this rumour. Since it is a local manufacturing company that can have the full capacity to supply the amount we need, we should keep it as our potential supplier. It is a manufacturing company so it has more control on the production and it can manages decisions on the volume of goods they produce.
Supplier C

Finding This supplier is a Trading company that import and sell wide varieties of goods such as rice, salt, sugar and spices. Since it is a trade company it can import from many countries and it can supply many sort of products at the very fair prices. It has reputation for its service and the quality of products it supplies. The good point for that supplier is that it has many warehouses in Chagong, Dhetra, and Mugla, and it can maintain a level of stock in its warehouses. It can manage to accept orders for larger quantities of product, which
it will then source from a manufacturer.

Recommendation

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When we look at the information we get, we can see that even it is a trading company, it has a good reputation for supplying good quality products at low prices and one local NGO in Mugla has had experience of using this supplier for supplying small quantities of rice. This NGO give positive feedbacks about that supplier. But as a just trading company, it is not at the source of goods because they do not manufacture. That is the weak point for that supplier that we cannot get consistent level of quality of our products since it acquires the supplies from various manufacturers, both local and international. Supplier D Finding This supplier is an international manufacturing company which has operations and factories in Betaland, Alphaland, Deltaland and Homeland. As a matter of fact, that company is biggest among other suppliers because this company is one of the major manufacturers, exporters and suppliers of salt, sugar and dyes in the Region. It produces these supplies under 3 divisions. It is not only a well experience international company that can produce many types of products such as Edible Salt, Iodised Edible Salt, Common Salt, Iodised Common Salt, Industrial Salt, Free Flow Salt and many types of sugar. Its lines of production are fully automated by modern machineries and means of production. Recommendation The advantages for this supplier are that it produce high quality products in safe and hygienic factories and has many connections with other large industrial and commercial companies. It has humanitarian spirit and social commitment to help the poor and needy people even though it does not have experience with the humanitarian organizations. But it is an overseas company; it has been producing sugar in Betaland. It produce salt and sugar in Deltaland, so if we need to buy salt from that company we need to import from Deltaland and it will involve cost of freight and transportation. But this is a large scale manufacturer that can handle big orders, it should also be counted as our potential supplier.

Additional information from each of the suppliers


From Supplier A How and where they purchase Raw Materials Is there a workable Quality control system Does labour force conform with the humanitarian standards/criteria Economic and Financial strength From Supplier B Past Experiences of production Plan for industrialization Is there a workable Quality control system Performance History From Supplier C Performance history Sourcing of Raw materials Major customers it deal with and track record Economic and Financial strength

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From Supplier D How and where they purchase Raw Materials Major customers it deal with and track record Is there a workable Quality control system

Supplementary Questions to ask the Suppliers


We have to pay Supplier Visit to the respective suppliers to know more about the following points, by interviewing the responsible persons there: Size of Business and production Capacity/ Tonnage per week/month Financial data/ yearly turnover and accounts Ownership, Legal status Location and size of factories and premises Policy and systems of quality control Procedures for security, Hygiene and Environmental preservation Size of workforce/ Staffing level General information about Human Resource Management and Training System of Management Information Technology Usage Level of Morales and attitude of staff Procedures of Good Commercial Practices Pricing and Market Positioning Production Lead-Time/ Delivery Schedules Minimum stocking level and product availability Certificates of Professional bodies Transport Management Market Experience and dealing with humanitarian organizations

Aung Kyaw Moe Logistics Officer SCILaid Betaland

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