For this assignment, in a paper that is a minimum of 3 pages long assume
you have been asked to write a report that summarizes your perspective
on the situation and describes the course of action you would recommend
for Berex. Discuss in detail why you make this recommendation by
interpreting and explaining your ideas. Part of this discussion should
include a discussion where you defend your recommendation. Based on the
course of action you recommend, what type of supplier relationship are
you proposing Berex maintain with Anderson Chemicals? Why is it
important to build constructive and cooperative relationships within the
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Mark Oleson is the Director of Purchasing for Berex Drugs, a large pharmaceutical company
that provides drugs at the lowest possible cost to clinics around the country. Mark has just
hung up the phone with one of his suppliers; apparently their manufacturing plant has been
severely damaged by a fire and wonâ??t be back in production for at least three days. What is
even more tragic is their one and only IT specialist has been injured in the fire and will be
off work indefinitely.
Berex has recently gone to a completely electronic system of communicating orders,
shipment and payment with their supplier partners. Although the electronic system
experienced a number of delays and issues with sending and receiving shipments during its
implementation it has been running flawlessly since then. Mark believes the new computer
system has become a competitive advantage to Berex. He has since hired a number of IT
professionals to update and maintain the system.
Because Berex is committed to remaining the lowest cost provider of drugs it is constantly
looking for new suppliers that can lower their material costs. It recently negotiated a
contract with a start-up firm, Anderson Chemicals that can provide the material for the
manufacture of drugs used in chemotherapy at almost a 15% discount from their previous
supplier. During the Supplier Evaluation process Anderson Chemicals was ranked as
â??excellentâ? in every category. The only reservation came from Berexâ??s head of IT, Joanie
Michael; she was concerned that because Anderson is so small it didnâ??t have the
infrastructure to support an IT system that can commutate effectively with the system at
Berex. Until Anderson can install state of the art equipment orders and payment will have to
be manually entered into Andersonâ??s system. The team at Anderson assured Berex it will
bear the cost of this double entry.
Mark Oleson places an emergency call to Mitchell Consulting and requests they attend a
meeting to discuss the situation. He has invited his entire Purchasing Team and also invited
Joanie Michael to attend as well to share her insight into the IT situation at Anderson. Mark
has asked Mitchell Consulting to provide options for maintaining their Supply Chain until
Anderson is able to resume shipments.
Elizabeth Barker, one of Berexâ??s senior purchasing professionals, believes they could contact
their old supplier Miller Chemicals and negotiate a contract for Miller to provide the
necessary chemicals. Elizabeth is worried that Miller might not be interested in a short-term
contract that would only fill the supply chain until Anderson is back in production. She
believes they may refuse to sign such a contract or they might increase the price of the
required chemicals significantly, effectively taking advantage of the situation. Her
recommendation is to drop Anderson as the primary supplier and negotiate a long-term
contract with Miller Chemicals.
Roberto Juarez disagrees, â??if we go back to Miller we will have to pass the additional cost on
to our customers for the length of any contract we sign. This is completely against our
principles of being the low cost providerâ?. His opinion is that Berex should immediately
begin looking for a new supplier, and end its relationship with Anderson. When Mark asks
how long this process might take, Roberto replies it took six months to negotiate the current
contract with Anderson. He concedes they may need to work with Miller, at whatever cost in
the interim period.
â??Do we even know how long it will be before Anderson is back in production?â? Mark asks.
â??My impression was the damage to the computer system was more of an issue than the
actual damage to the manufacturing areaâ?. No one is able to answer Markâ??s question and
the meeting ends pending discovery of when Anderson might be back in production.
After the meeting you stop in the break room for a cup of coffee. Joanie Michael and her
Administrative Assistant are deep in serious conversation by the donuts at the break table.
You canâ??t help but over hear Joanie say to her assistant, â??I used to work on the same
system that Anderson is currently using. I am sure I would be able to help get them back in
production. But I have my own responsibilities here at Berex. I donâ??t want to find myself
working two jobsâ?. You take your coffee and leave the break room without commenting.
As a junior employee of Mitchell Consulting you are hesitant to share this information with
your superiors given that Joanie didnâ??t share the information with you. You also are
skeptical if Anderson would be willing to have an employee of Berex inspecting their
computer system, or what was left of it. You are also aware that as an employee of Mitchell
consulting it is your duty to give the best advice possible to help resolve this situation.
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