For more than 86 years, James Tisdale Washington, Inc has manufactured wood stoves for mobile home use. In recent years, with the influx of energy prices, President Barbara Smith has witnessed sales quadruple. This increase has made it tough for Barbara to maintain quality in all her wood stoves and related goods in Tulsa, OK. Unlike other organizations that manufacture and sell wood stoves, JTWI has not made any updates to their business model. Barbara expresses some areas of concern for the organization in the areas of cost containment, risk management, globalization, technology, and customer relationships. Eric Jones, the Central Procurement Officer, feels that the company should refocus on strategies and ojectives related to supplier innovation, supplier relationships, e-Procurement, managing cost/price and managing global supply base. Richard Phipps, the Manager of Operational Excellence feels that some of the organizational enablers are e-Sourcing, global buying groups, and business unit leaders. Although he feels that these enablers could benefit the company, he is concerned about maintaining privacy and holding onto proprietary information, which could be compromised by using the previously mentioned strategies. Barbara feels that e-Sourcing, global buying groups, and business unit leaders are key to the companies success in the upcoming year. These strategies will help them with their current need to develop stronger supplier relationships, outsourcing options, and maintaing professional control over the purchasing process. Eric believes that centralized purchasing and leveraging purchase volume for better pricing from suppliers will yield benefits for the JTWI. The inventory turnover ratio has been excellent for JTWI this year.

What is an inventory ratio discussed in the scenario?

cost of goods sold divided by the average inventory.

How would e-Procurement be beneficial to James Tidsale Washington, Inc. if they were to enter into the global market?

EDI was developed to improve the purchase process. It is an Internet-based e-Procurement system that would connect them with international and local suppliers. This would assist with relationships, cost, and risk.

What are three reasons to make your own products instead of purchasing them?

There are several reasons: better quality control; proprietary technology; competent suppliers; control of lead time; cost of warehousing and transportation; overall lower cost.