Question
Company presentation : Founded 25 years ago in Aix les Bains, and established for over 12 years in Lyon, FREE ZONE distributes mountain and bike
Company presentation :
Founded 25 years ago in Aix les Bains, and established for over 12 years in Lyon, FREE ZONE distributes mountain and bike equipment .
The company was acquired three years ago by Richard H, employee for 12 years in society.
The market mainly covers France and Belgium.
Free Zone employs 14 people and has an annuel turnover of 4,9 millions euros. It is a family owned business.
Recognized for its technical requirement, the company selects the best European and global brands, leaders in their field. By constituting its brand portfolio, FZ offers its distributors a sophisticated, but global, offering.
Historically specialized in the world of mountains, the team has transposed its know-how in the field of rescue into perilous environments and personal protective equipment, as well as in the field of cycling. In addition to the judicious choice of products offered, FZ also offers communication tools, sales aids, technical datasheets, sales animations, etc. and focuses its policy on service and responsiveness. Its targeted customers are sports retailers (B to B to C) but also working at height professions (e.g: rope access technician) and fire men (public procurement). FZ is distinguished by its strong involvement: partnerships, project support, presence in the main sporting events, close relations with federations.
You are an procurement specialist, and you have been appointed as a consultant to help and support the company in the development of a new purchasing action plan and eventually implement sustainable procurement.
In order to prepare your diagnosis, you have met and interviewed the companys CEO and the buyer. You have collected data and market information.
You have taken notes as presented
2 warehouses , one is subcontracted so it must be able to absorb the flow variations
Seasonal business ( for B to C) with a pick in volume at Christmas time: importance for inventory management. Specific attention for Chinese importation forecasts (problem :stock shortage at Christmas 2018 for some products imported from China)
Packaging: primary packaging delivered by the manufacturer, secondary packaging provided by Free Zone to protect goods (high value products) and prepare individual orders. Difficult to eliminate packaging as the company sells high value products that need to be protected. It is part of the company image
Main contributors to the carbon foot print: transportation of goods
Small suppliers base, the company prefers long term relationship based on transparency
Choice of suppliers in countries where child labor is prohibited
Selection criteria: quality, performance and location (affecting transport and stocks)
New labels development for clothing. e.g: blue sign
Few quality problem except with supplier Alpha ( 5 product recalls)
No quality control before shipping, all suppliers sell EXW except suppliers Beta, Mike and Sierra who send goods free of charge.
No written contracts , only unformal agreement
40% B to B (firemen, window washers, army ... ) and 60% B to C through a network of sports shops and other resellers ( leisure market).The market mainly covers France and Belgium.
The sales representatives are the products specialists. They test the products before adding the product in the catalogue
Growth on Bicycle Market especially for high quality products
Growth on professional climbing market: demand is increasing for security products: harness, belts
Decrease in the B to C climbing market
Growing interest of competitors for the sustainable development approach: Millet ropes with recovery policy, Patagonia and 1% for the Planet, Vaude range and 100% Green Shape
High security regulation for climbing and cycling products
Increased packaging Eco contribution
Compliance with Battery Directive, RoHs and WEEE: some products are concerned by the directives such as helmet with lighting, torches, barbecue, gas stove
| Caterory | Suppliers competition | Substitution or New suppliers | Legal pressure | Environmental impacts | Social impacts |
| Bike | Medium | No substitution, but possibly new suppliers | None | High | Medium |
| Bike trailer | Very few suppliers on the market with a high level of quality able to guarantee security | No | CE regulation | High | Low |
| Camping accessories | Medium | No | None | Medium | Medium |
| Climbing accessories : snap hook, trekking pole, magnesia, winch, rope | No | No | Ce regulation | Low | Medium |
| Clothing | Medium | Yes | None | High | High |
| Cycle accessories | Medium | No | None | High | Medium |
| Helmet | Very few suppliers on the market with a high level of quality able to guarantee security | No | Compliance with Battery Directive, rohs and WEEE: some products are concerned by the directives such as helmet with lighting, torches | High | High |
| Climbing Shoes | Medium | Yes | Increased packaging Eco contribution | Medium | Medium |
Diagnosis
Based on the information provided, develop a SWOT analysis for the purchasing function
Supplier Market Analysis
You plan to source in France. Based upon the information collected in the Xerfi document , build a French supplier market analysis. Explain what the main influencing factors that need to be analysed and how to measure them.
ABC analysis and Kraljic matrix
Based upon the figures provided in the excel document, develop a pareto analysis per category then build a Kraljic matrix and position helmet and clothing category
Country risk
You have decided to source clothing articles in Turkey or in Morocco, explain where you find relevant information to define the country risk: explain in which country you are going to source
RFI
your client need to have a more accurate vision of the supplier market, and more specifically of the textile industry. All suppliers in their current portfolio have been assessed through a self -declaration questionnaire (see appendix 1). As a consultant, you have been assigned to review the portfolio and improve this RFI (request for information). To submit the RFI, you have to develop a questionnaire including questions related to CSR issues relevant for the industry. Remember that this template document will be filled up by the suppliers, questions have to be clear, not misleading, justified, realistic, measurable and organized by topic. 
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Principles Of Financial Accounting (Chapters 1-17)
Authors: John Wild
25th Edition
1260780147, 9781260780147
