Laburnum Group: Challenges and Solutions in Procurement and Supply Chain Management

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Running Head: LABURNUM GROUP
Laburnum Group
Student's Name
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LABURNUM GROUP
Table of Contents
Table of Contents....................................................................................................................................................2
1.0 Introduction..............................................................................................................................................3
2.0 Methodology.............................................................................................................................................3
2.1 Sapphire energy........................................................................................................................................3
2.2 Challenge..................................................................................................................................................4
2.3 assessment of the effectiveness of current ordering system ................................................................4
2.3.1 Calculation of the current order system.............................................................................................4
2.3.2 Theories of procurement and management........................................................................................6
Organisation buying behavior..........................................................................................................................6
2.4 Challenges.................................................................................................................................................6
2.5 Major global issues relevant to strategic sourcing................................................................................7
2.5.1 Supplier identification..........................................................................................................................7
2.5.2 Consultative relations...........................................................................................................................7
2.5.3 Impacts of less-than-perfect demand forecasts for AusCotton products.........................................7
2.5.4 Importance.............................................................................................................................................9
2.5.5 Response.................................................................................................................................................9
3.0 Conclusion................................................................................................................................................9
4.0 Recommendations....................................................................................................................................9

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LABURNUM GROUP
1.0 Introduction
Victorian farmers' cooperative originated in 1920, laburnum group has grown into Australia biggest listed
company with its headquarters in Australia, Victoria, and the sector covers office supplies, energy industries,
and safety products as well as home products. The main function of the group is to give a suitable return to its
stockholder while addressing various needs of the wider bondholders. The firm monitors the outcome across its
diverse range of firms which are very important to cooperate strategy judgments. (Van Weele et al., 2010).
The portfolios are facing challenges which motivate their top management to check the current systems,
strategies across different product groups. Laburnum shows a variety of Inefficiencies and problems across the
areas. As a result of a number of procurement and supply chain related problems across clothing and energy
areas when analyzed by the factional team to identify the areas where improvement is needed. There are several
sections shows areas with the challenge that is clothing as cotton and sapphire energy.
2.0 Methodology
The study used case study to investigate two different aspects of the business portfolio. The portfolio
includes the energy sapphire and the Auscottton. The As cotton is a global maker of summer and winter outdoor
sports apparel.in winter it includes outwearing such as jackets, footwear, wide breakers, freezes and sky jackets.
In summers they include running entails such as shirts and shorts. Hydration system, wide breakers, backpacks,
and footwear. The energy Sapphire is responsibilities for electrical services provisions to customers around
areas such as Mildura, Geelong, Bendigo, Ballarat, Melton, Sunbury, and Wodonga.
2.1 Sapphire energy
This sector has a duty to provide reliable electric services to customers in and around include as
Bendigo, Mildura, Melton, Ballarat, Geelong, Traralgon, Wangaratta, Wodonga, Sunbury, and Shepparton. The
very material that's used to provide the service is the aluminium triplex cable and main function is to offer
electric current from spreading pole to the meter coil on the house (Burgess et al .,2006).

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LABURNUM GROUP
2.2 Challenge
There is no quantity discount offered to this cables and the distributor needs at least 4500 meters to be
mandated.
Associated with each cable shipment orders cost of fifty US dollars which includes every price from making
the purchase demand to giving a check for payment.
2.3 assessment of the effectiveness of current ordering system
Lee at al., (2007) suggested that Sapphire energy is involved in the business of providing electric
services to many different people in Ballarat, Geelong, Sunbury, Melton, Traralgon, Bendigo,
Wodonga ,Wangaratta, Shepparton and Mildura. There are various material types that are needed in the
provision of electric services where 1/0 AWG aluminium triplex cable is the main component (Van der Zwart et
al., 2005).
2.3.1 Calculation of the current order system
According to Harland et al., (2007). Said that in order to find the success of the existing collation
system one must calculate the economic order quantity as shown below
EOQ= √ 2 DC
hC
Where
EOQ is a formula that aims at minimizing the overall cost of inventory by helping reach a balance between
holding too much stock(Overstocking) and too little stock(Understocking)
D is the annual demand
C is ordering cost per unit
he is the cost of holding inventories per unit per order.
Q is the same as EOQ
EOQ=2×155000×50÷10100×1.35
=10919.28 UNITS.