Essay About Introductionallen Park Power Ltd. And Rate Increases

Allen Park Powder Procurement
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PROCUREMENTCASE STUDY: ALLEN PARK POWERSUBMITTED BY: JOHNOEL ASTUDILLOINSTRUCTOR: SULMAN HAIDERDATE: APRIL 17, 2019Table of ContentsEXECUTIVE SUMMARY1INTRODUCTION2ISSUES IDENTIFICATION3ENVIRONMENT & SWOT ANALYSIS4ROOT CAUSE ANALYSIS5ALTERNATIVES &OPTIONS6RECOMMENDATION7MONITOR AND CONTROL8APPENDIX9REFERNCES10EXECUTIVE SUMMARYApril Song, VP of Supply Chain Management at Fashion Unlimited in Toronto, has been tasked with researching offshore production locations for the company’s clothing line. The purpose of this report is to identify and evaluate a potential country for expansion. The challenge is developing an evaluation grid and then evaluating each country whilst trying to satisfy the criteria provided by Executive Team members. New CEO, Elizabeth Jennings, with a background in ‘Fast Fashion’ was brought on several months ago. This has indicated a new shift in focus for Fashion Unlimited.INTRODUCTIONAllen Park Power Ltd. (APPL) was founded in the early 1900’s as a municipal power company for the city of Allen. The company provides electrical generation, transmission, distribution and sales for the citizens and industries of Allen Park. In 1997, city council saw an opportunity to enter in a non-regulated international market. With an impending deregulation, council restructured the department into a separate corporation. By 2008, they were operating in Australia, the United Kingdom, and the United States as separate business units. Graham Link, Director of Supply Chain Management was tasked with leading a team in planning the outsourcing of business-related IT Systems; such as, Accounting, payroll, humans’ resources and purchasing. He has also been asked to examine other areas for potential outsourcing. Reg Borkowski replaced Randall Chu following their retirement in 2009. Reg comes from a legal background and has years of experience working in quasi-public sector. He has been brought in to tackle international projects and to become a major Canadian player through continued growth using private sector methods.ISSUES IDENTIFICATIONISSUESIMPACTURGENCYSHORT-TERMCarlyle on strikeUnable to supply transformers at the rate of demand. Creating delays in construction. Transformers entering starvation sate.1Transformer supply & demandTransformers are rushed ordered.News reaching local business media – no longer low profile2Sellers market in electrical equipmentAlternative suppliers charging 40% markup from original bid.  3LONG -TERMFinancial squeeze – cost to producePrice for electricity, steel and copper continue to rise significantly resulting higher manufacturing costs1Decreased bidding poolReduced competitiveness from suppliers to bid on projects 2Greenhouse reductionBid criteria include environmental factors. Transportation savings vs. environmentally friendly products offered in global market.3

ENVIRONMENT & SWOT ANALYSISFAVORBALEUNFAVORABLEINTERNALSTRENGTHS:Geographical monopoly on all aspects of the power industry.Increasing expertise in global sourcing.Outsource IT systems and customer call centre WEAKNESSES:Company operated in the public’s eye. Rates and tariffs for transmission controlled by a government agency – restricted rate increases. Capital-intensive.Company wide push to reduce greenhouse gas emissions.Estimated forecasting for customer demand – done manually.Sole-sourcing for critical parts of electrical transmission. Political and community pressure to become major player in Canadian market. Public opposition in change on strategy EXTERNALOPPORTUNITIES:Wholesale market for electrical power Strong economic growth in the industrial economy – increased retail sales and demand for new housing  Outsourcing Accounting, payroll, HR, purchasing & call center operations Outsource construction of the transmission and distribution systems – transformer installation and line connection. Refurbishment work on heavy industrial electrical equipmentOffshore manufacturing can reduce cost and increase production.THREATS:Significant increase in the price of raw materials: Steel and copper Trending towards deregulation of the power industry bringing in more competition to the power industry Construction of electrical generation plants is regulated. Industry made up of commissions, boards, government agencies Demand for transformers has put upward pressure on transformer prices. With a limited supply of electrical generator plants and an increased demand for electricity in industrial and retail industries, the price for wholesale electricity will rise steadily. In addition, the price for copper and steel has significantly impacted the cost to produce transformers. ROOT CAUSE ANALYSIS1. Carlyle on Strike – Halt in Transformer Production 2. Transformer Supply & Demand