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Looking for a SWOT analysis of this Southwest Research Institute Purchasing and Its Customers Background: Southwest Research Institute (SwRI) is an applied Research and Development

Looking for a SWOT analysis of this

Southwest Research Institute

Purchasing and Its Customers

Background:

Southwest Research Institute (SwRI) is an applied Research and Development Company in San Antonio Texas with over 2500 employees. SwRI consists of over 200 buildings on a 1500 acre campus which looks similar to a college campus. The company has 9 research divisions spread across its campus, each of which specializes in an area of science and engineering and work for either government or commercial clients.

SwRI has centralized services of Purchasing, Receiving and Accounting. The procurement cycle looks like this:

  • Engineers and scientists put what they need to procure on a purchase requisition and send the requisition electronically to the purchasing department;
  • The purchasing department finds a source for the material, negotiates a price, and then officially makes the purchase. The vendor is sent a purchase order (electronically) that confirms the terms of the purchase and includes a unique purchase order number which will be used on all paperwork aspects of the procurement cycle
  • The items purchased are eventually received at Central Receiving, who records the receipt in the system (based on the unique purchase order number) and then routes the items to the end location on campus.
  • The accounting department receives an invoice from the vendor and the invoice should refer to the purchase order number. If the invoice matches what is on the purchase order, and what is shown as received in the system, then the vendor will be paid.
  • The electronic purchasing/receiving/accounting system is a system written by a 3rd party however, SwRI's IT department is able to assist when necessary to make custom changes.

Description of Problems

The purchasing department places over 40,000 individual orders a year on behalf of the scientists and engineers who work on projects at the Institute. These scientists and engineers are referred to as "requestors", but can also be considered internal customers to the purchasing department.The buyers in purchasing have a very difficult job: besides handling a large volume of orders, they must comply with internal and external requirements, many of which are related to being a government contractor.

  • Issue:The purchasing department and its requestors are often at odds over how long it takes for purchasing to process the orders. The requestors often do not understand the purchasing function and requirements and why it takes so long to simply place an order. The purchasing department doesn't understand why the requestors don't understand or why they need things in such a hurry.
    • Question:Why should the purchasing department consider the requestors as customers? How does that benefit the overall success of SwRI?
    • Question:What can the purchasing department do to increase the understanding of its process by its customers?
    • Question:Whose responsibility in purchasing is it to improve the situation?

  • Issue: When the requestor sends an electronic requisition to the purchasing department, there are several things that they are very interested in:

  • They have usually specified a specific vendor as a "suggested supplier" many times based on an internet search.
  • Based on this, they usually an idea of how much the item(s) should cost. This is important because the items' cost is part of their project budget.
  • The date that they need to have the item delivered by (need by date). This is important to the project's schedule.

The buyers are so busy that they do not always have time to update the requestor when they change a vendor, price or delivery date.

  • Question: Are the requestors being fair in wanting to be updated on changes to their request?Can you put yourself in this situation based on your experience in ordering things personally?
  • Question: How can the purchasing department work with the IT department to better communicate with its requestors regarding the key items that their customers are interested in?
  • what would be a good SWOT analysis?

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