PPL: Enhancing Logistics & Supply Chain Management for Cost Control

This case study examines PPL's approach to managing costs within its logistics and supply chain operations, particularly in light of deregulation and increased competition. The study identifies issues such as low-value purchases, communication inefficiencies, and limitations in data reporting. It proposes solutions including the implementation of a low dollar purchasing system to reduce transaction costs and improve service efficiency. The analysis recommends strategies for monitoring and controlling costs in the future, such as utilizing P-card systems, setting limits, and auditing compliance. The study emphasizes the importance of effective inventory management, streamlined transactions, and leveraging technology to achieve cost reduction and enhance customer satisfaction. The document is available on Desklib, a platform offering a wide array of study resources for students.

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
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STUDENT NAME:
STUDENT ID:
TOPIC: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
DATE: 25-2-2019

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Purpose
The purpose of the assignment is to focus on the managing costs at PPL. There are government
regulations that are observed in electric industry. A failure is noticed that results in economizing
the utilities. Thereby it is important that a fixed rate of return is allowed to electric utilities on the
assets that the company involves in power generating station. There is a sense of security that the
government provides by regulations. The major issue is about cost reduction for customers while
reducing kilowatt per hour rate. PPL is engaged while obtaining lower value goods that would
benefit the customers and engage customer satisfaction rate.
Identifying the issues
The issues that are identified in the case are commercial issues and management issues. There
are several technical issues that PPL has faced with solicit competitive advancements. The
purchase orders are the major issues that have been characterized with the successful approach of
reducing the transactional cost that an organization faces with the low value purchase (Kooker,
2000).
Analyzing the issues
PPL has faced the low value purchase issue which needs to be associated with the blanket
purchase order that has to be carried by the company effectively. Low value purchase has been
the root cause that addresses several issues for users to release the payment to suppliers. Low
purchase is the responsible item that has been focused while releasing the technique in several
ways in order to conduct and communicate with the users effectively (Nelson, Patricia &
Jonathan, 2001). The issues with the communication software has been addressed which has
significantly reduced the transactions that place with the help of EDI. While using EDI, there
may be problems of delay (Fitzgerald, 2000). The reason behind the faxing process is automatic
but the supplier’s order entry is targeted towards a manual approach to be used in PPL. Due to
manual process, there can be delays that can be observed in the autofax system that is even called
a FaxGate. The system is no doubt the automatic version but the process of receiving and
entering the supplier order is manual which becomes tough for the company to increase the
possibility of automation. While using the approach of procurement card, there are drawbacks

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such as insufficient data report and non-identification of the use of small suppliers working
criteria (Giunipero & Dawn, 2000). There are several other issues that
Providing root cause analysis and alternative solutions
The root cause for the issue is the lower value goods and services that are not appreciated in the
company. It is important that the solutions should be made while using effective methods that
reduce the cost and increase the service efficiency (Avery, 2000). Low value purchase is the root
cause of the issues that have been addressed in case of PPL. It is important that cost analysis,
inventory analysis, use of supplier analysis is carried with effective means of handling the
purchase order. It is even important that delivery time analysis is focused by PPL. There are
several ways where PPL can work on reducing the cost and emphasizing the best purchase order.
Recommend the best alternative
If the company has many potential suppliers, it would be difficult to maintain the research and
compare effective price system. In fact price comparison are necessary because of low value of
the goods. A low dollar purchasing system can be used by several companies in order to focus on
low cost and good service (Kooker, 2000). Low dollar purchasing is a major process and the best
alternative that allows the company and the buyers within the organization to regularly purchase
or not purchase the goods with the low dollar supplies. This seems to have an effective
advantage for the supplier while the values should not exceed a given price by the organization
(Richard & Mahendra, 2003). For the current organization that is PPL the low dollar purchase
that is addressed is less than $50,000 for products and services that are less than $3,000 while
purchasing material goods. Ascertaining the advantages that PPL would gain while using this
system are reduction in cost that is per transaction cost, increased attention provided by
important items and reduction in cycle time that would definitely satisfy the internal customers
of PPL. The tools and systems that support the low dollar system mainly includes purchase order
that is not covered in the contract, issued services, negotiated services that are granted with
negotiation between supplier and buyer and the blanket purchase order which seemingly can be
used while directly placing an order to the supplier.

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The company can even enter in a contract with the bank card company that issues the
Visa/Master card. This helps the managers to focus on low dollar purchase while usually using
the purchasing card system. However, it helps in certain matters of purchasing card that can
rather be modified from time to time. With the overall business perspective, it is important that
purchasing perspective and accounts payable are the business perspectives that can be offered to
the customers while benefiting them with greater efficiency and reduced costs. There is an
advantage that helps in cutting down the major transaction with the help of cost requisition
strategy and inspecting the purchased item.
Implementation plan
Low dollar purchase system is effectively implemented with the help of modified transactions
and methods that are operated in an organization. The transaction cost is relatively reduced while
reducing the actual cost with the help of cost of place, inspection and requisition. The cost of
purchasing can be majorly reduced to $50 from $150. This seems the simplification of the
system that can be adapted by PPL. Thereby the purchasing process is majorly streamlined
effectively that accounts for more satisfied users.
Identifying strategies to monitor and control in future
The P-car systems are the major benefit that the company can have advantage in the near future.
Setting limits, training card holders, negotiating banks and auditing compliances are the major
use of P-card system. This helps to improve the information system that PPL wanted to
effectively work on while managing user-defined services. There is a standardized contract that
the company analysis with the users learning how to focus on the new systems and effective
process that are used at PPL.
Summary
There is an increasing pressure to focus on reducing the cost while at the same time handling the
inventory effectively. Buyers play an important role in managing the blanket purchase order and
low dollar system that affects the transactions and the efforts that are made by the low value
purchase system. It is important that inventory is maintained in PPL and the transactions are
focusing on avoiding cost and transferring the work with the help of personnel and systems.

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There is an increasing pressure that has been noticed in PPL and thereby the cost can be reduced
while receiving advance shipping notice system that can even work for system’s network.
Effective problem solving opportunities are focused with smooth functioning of the work that is
efficient and effective work is possible.

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References
Avery, S, (2000) “Purchasing Shows One Face to Suppliers,” Purchasing, pp. 48-51.
Fitzgerald, K R., (2000). Purchasing Occupies Key Position in Supply Chain, Supply Chain
Yearbook 2000, Cahners, New York, New York, p. 21.
Giunipero, L, C., & Dawn H. P., (2000). World-Class Purchasing Skills: An Empirical
Investigation,” The Journal of Supply Chain Management, Fall, pp. 4-13.
Kooker, N, R., (2000). Think Bigger, Better, Bolder: The Best Companies Empower Purchasing
Pros to Rise to the Next Level, Purchasing, pp. 60-65.
Nelson, D., Patricia E. M., & Jonathan S., (2001). The Purchasing Machine: How the Top Ten
Companies Use Best Practices to Manage Their Supply Chains, The Free Press, New
York.
Richard J. P., & Mahendra G., (2003). The 2003 Purchasing Card Benchmark Survey Results.
Charleston, IL: RPMG Research Corporation.