Consider the given case study (Multinational F&B Company (MFB), PDF file attached) and answer the
following questions:
1. Given the receipt of a proposal or competitive proposals for a major contract, determine the key
factors used when negotiating an agreement or evaluating competitive proposals and establish
a negotiating strategy for MFB.
2. Analyze and select effective contract management techniques to control contract cost, schedule
and performance factors; as well as manage contract changes, contract claims and contract
close out for MFB.
3. Given a claim on a major contract, analyze the role of commercial terms and conditions, the
uniform commercial code (UCC) and applicable government regulations on the outcome for MFB.
MAN5410 Project Integration and Procurement Assignment 3 Type: Project Procurement (Individual Assignment) Marks: 35% of your semester mark Due: 5 November 2017 Consider the given case study (Multinational F&B Company (MFB), PDF file attached) and answer the following questions: 1. Given the receipt of a proposal or competitive proposals for a major contract, determine the key factors used when negotiating an agreement or evaluating competitive proposals and establish a negotiating strategy for MFB. 2. Analyze and select effective contract management techniques to control contract cost, schedule and performance factors; as well as manage contract changes, contract claims and contract close out for MFB. 3. Given a claim on a major contract, analyze the role of commercial terms and conditions, the uniform commercial code (UCC) and applicable government regulations on the outcome for MFB. Approach You can find a lot of information on the web about this. Do lots of Google searches. Be quantitative where possible. I would like to see percentages and numbers for the facts you use. Use in-text citations. Use ECU-APA referencing guide file. You should have at least 10 current references (journal papers and books) between 2013 and 2017. In addition to them, you can use websites. The report should be approximately 3000-3500 words in length (excluding references), so you will need to be concise. Provide specific answers to the above questions. You don’t need to provide an essay style report, and there is no need for introductions, abstracts or summaries. Submit your final document through Turnitin. Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence Bottom Line The food and beverage (F&B) industry is one of the most challenging and competitive industries globally. To top the profit charts, apart from continually producing new and innovative products, F&B companies also need to continuously evaluate their direct and indirect raw material sourcing contracts. The volatility in prices of raw materials make it imperative for manufacturers to assess suppliers on various parameters and negotiate contract terms to drive higher savings. However, without an effective sourcing strategy and timely market intelligence, driving best-value sourcing can be difficult. Challenge The client's manufacturing unit in Australia was scheduled to renew its contract for natural gas (NG) – its primary source of energy to power processing ovens. However, the frequently changing regulatory and taxation norms, and the non-existent feedback from suppliers in terms of the impact of these changes on NG pricing, limited the client's visibility into future pricing. The client sought a complete understanding of the impact of global uncertainties and various other local developments on NG pricing. However, the lack of supply market intelligence was a key obstacle in identifying a suitable natural gas supplier and negotiating the terms of contract and pricing. Approach Although, international supply and demand trends are the key drivers of commodity prices around the globe, there are a number of other factors that influence the final pricing of a commodity in each region. GEP's expertise in identifying international market trends and evaluating their impact in various regions was leveraged to advise this client. GEP's global energy experts established a roadmap to help the client identify a suitable NG supplier and negotiate the terms of contract. This approach involved conducting in-depth and targeted research on NG markets. It was complemented by discussions with local regulatory bodies to gather intelligence on supply market and identify the key negotiation levers. Supplier market intelligence helped gain a transparent insight into NG pricing in Australia and also in forecasting price-related impacts due to global and local developments. On the other hand, the negotiation levers assisted in minimizing the impact of the uncertainty on natural gas pricing. Case StudyCase Study Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence Customer A $10 billion-plus multinational, food manufacturing company specializing in convenience food products with manufacturing facilities present in more than 15 countries across the globe. Challenges With its natural gas contract scheduled for renewal, the client sought a complete understanding of factors affecting natural gas pricing. However, the lack of supply market intelligence proved to be a key challenge while negotiating on pricing and other terms of contract. 100 Walnut Avenue, Clark, NJ 07066 | P 732.382.6565 |
[email protected] | www.gep.com Copyright © 2015 GEP. All Rights Reserved. Case Study Bottom Line Additionally, GEP also reviewed the pipeline base tariffs for transmission and the contract status of three major Australian NG retailers with natural gas producers. While the former helped to understand the impact of source and transmission pipeline on pricing, the latter helped establish other factors that could potentially impact natural gas pricing. GEP's global energy experts also identified the cost structure in NG manufacturing in Australia. Production and processing accounts for roughly 30 to 35 percent of the total cost, transmission and distribution accounts for about 40 to 45 percent, while gas retailing accounts for 15 to 20 percent of the total cost. The team also identified that the increasing use of shale gas and the increase in LNG exports have significantly affected natural gas prices in Australia. Results The advice given to the client was multi-pronged. Based on supplier market intelligence and in- depth insights from category experts, GEP not only identified a suitable NG supplier for the client but also advised on the right time to enter into a contract and the ideal contract tenure based on the prevalent market conditions. Given the downward price pressure from the global LNG market, the client was recommended to enter into a short-term contract with NG retailers having their source in South Australia. Based on GEP's recommendations, the client signed a year-long contract with a retailer that matched the requirements and realized P&L savings of 10 percent. Solution A comprehensive sourcing strategy was developed based on in-depth research and supplier market intelligence. Based on the research outcome, recommendations and negotiation levers were provided to the client. Results Based on GEP's market intelligence and insight, and taking into account the prevalent conditions of the global LNG market, the client signed a year-long contract with a retailer sourcing NG from South Australia and realized P&L savings of 10 percent. GEP is a diverse, creative team of people passionate about procurement. We invest ourselves entirely in our client's success, creating strong collaborative relationships that deliver extraordinary value year after year. We deliver practical, effective procurement services and procurement technology that enable procurement leaders to maximize their impact on business operations, strategy and financial performance. Honored as Best Supplier at this year's EPIC Procurement Excellence Awards, GEP regularly wins accolades as both a provider of a broad range of procurement services and innovative procurement technology. Among its recent distinctions, GEP has been named Leader and Star Performer in Everest Group's Peak Matrix of Procurement Services Providers, Leader in NelsonHall's NEAT Matrix of Global Procurement BPO Service Providers, Winner in the HfS Blueprint Report on Procurement Outsourcing Providers, as well as one of Spend Matters 50 Companies to Know and to the Supply & Demand Chain Executive 100. Clark, NJ-based GEP has 12 offices and operations centers in Europe, Asia and the Americas. To learn more about our comprehensive range of consulting and outsourcing services, please visit www.gep.com. For more about SMART by GEP, our cloud-native sourcing and procurement software platform, please visit www.smartbygep.com. Flowchart for Optimal Utilization of Market Intelligence to Address Sourcing Challenges Strategy Process Internal Analysis External Analysis Strategy Development Sourcing Execution Implementation 1 2 5 63 4 Scoping Define project scope: geographies, functions, etc. Define current scenario and problem statement Establish team charter Understand business requirements Analyze spend data Understand incumbents and their product / service offerings Analyze and understand supply market Understand solutions available in the market Identify supply- demand trends and their impact on customers Identify key players and their product/ service offerings Understand the best practices for the category List the applicable sourcing levers Manage requirements to achieve lowest TCO Carry out z ero-b ased costing Create a list of suppliers that meet requirements Understand the requirements of potential suppliers to establish good fit Analyze the quotes against price benchmarks Understand the value vs. pricing Understand the best practices in contracting Understand the best practices in supplier management Implement and track continuous improvement plan Man 5410: Project Integration and Procurement Management Semester 2, 2017 Rubric for Assignment 3: Project procurement (Individual Assignment) Assessment Item weighting 0 1 2 3 4 5 6 7 Determination of the key factors used when negotiating an agreement or evaluating competitive proposals 20 Development of a negotiating strategy for MFB 20 Analysis and selection of effective contract management techniques to control contract cost, schedule and performance factors. 20 Analysis and selection of effective contract management techniques to manage contract changes, contract claims and contract close out for MFB 20 Analysis of the role of commercial terms and conditions, the uniform commercial code (UCC) and applicable government regulations on the outcome for MFB. 20 Explained in terms of concepts from lectures/text 10 Questions clearly answered (i.e. no intro, conclusion, etc. required) 10 Adequate depth (dot points can be used but must have at least a paragraph of explanation) 20 References provided for each concept used 10 Total 150 Key to assessments: 0 Not attempted, or completely incorrect 1 Needs considerable attention to reach an acceptable standard