You are the VP of Supply Chain for a multi-million dollar consumer packaged goods firm. There has been turnover at the senior executive level with a new CEO and a new Board of Directors. A request has been made to you to provide the CEO and Board with an Operations Strategy. The purpose is for the CEO and Board to better understand your plan for this strategic, visible and costly operation. The Board and CEO were recently briefed on the current state of the supply chain operation and learned the following from yourself and team.

There is not a management tool to address, improve and communicate supply chain management decisions internally or externally.

Critical tasks within the operation tend to slip and should not. There are many parts to the operation managed broadly with less focus on unique phases and key tasks.

Quality is a concept the company believes is a given as you need to do your job to a minimum level of proficiency. Interviews with managers expressed that if senior management wants this emphasized it should be more formalized.

There is not a method of calculating the ideal order size. Inventory managers speak with sales and marketing when they are not busy tracking down inventory issues for what might happen and that is used to plan and schedule in a roughly reasonable way.

A plant supervisor recently completed an evaluation of the assembly line. It was determined that the speed of the line was controlled by how fast the workers could package the final product.

Improvement efforts were attempted last quarter to adjust how incoming materials were inspected and accepted. The experienced work team was not involved in this and expressed concern and resistance to this new process.

All customers are treated equally. The same price is applied regardless of customer order history, customer longevity, or inventory supply. Discounts are given for large orders though.

It takes a long time to move an idea to commercialization. The R&D VP says that is good governance and stewardship. The R&D VP describes product development as having 10 screening phases (ex. Finance, HR, IT, procurement etc) prior to development and commercialization.

Purchasing is a transactional overhead cost. The goal is to purchase with a low cost to improve profit margins. At times, procurement must pay a premium for shipments to arrive quicker due to stockouts of inventory.

The company uses third party logistics providers. Many carriers are used and measures are tracked on carriers and used internally to determine whom to order from next.

Warehouse fulfillment has seen increases in obsolete, lost and damaged inventory in the last 12 months. A new warehouse management system happened around that time but there was turnover and minimal training on it.

Warehouse personnel indicate a bigger warehouse is needed because more space is now taken for obsolete inventory and a generally cluttered space as a result.

Inventory counts for high moving items have disagreed from the system inventory. This has caused stockouts. Sometimes these items are found in the warehouse as they were mislabeled or put in the wrong place. As a result, when stockouts happen, purchasing is told more safety stock is needed because sales teams dont want to tell a customer there is a stockout.

What operation strategy or strategies would you implement to address the procurement and logistics?