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Procurement and Contract Management

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Jill was in her office at Radio Max, a manufacturer of high end radios for auto and marine. She was the head of engineering and design waiting for her boss, Ross, to walk in at any moment. There was a problem to discuss with him that was making Jill uneasy. Her group of engineers was contacting vendors of their components directly when they had been asked to go through the purchasing department. Jill knew her engineering staff needed the technical information as soon as possible, and having to go through purchasing was putting a bottleneck in design and production. Jill and Ross knew they had to come up with a solution together, as news of this situation traveling up to senior management would be a problem and make them both look incompetent.

Given the above scenario, answer the three questions below:

1. What do you believe is the "big picture" and what solution do you propose for the above scenario?.
2. Can this be a win/win situation or does it have to be a win/lose situation? Make a case for your choice or if you chose both, why can the solution result in both situations?.
3. In your own words, what do you feel would be the most difficult part of this negotiation? How would you prepare the team for the outcome?

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Solution Preview

The big picture is that there is a conflict between the group of engineers of Jill and the purchasing department. The group of engineers of Jill feels that technical information is not available on time and design and production are getting delayed. Even though it is not mentioned the group of engineers of Jill may be claiming that the components are not available on time and that was delay in production. Essentially, there is centralized purchasing and the group of engineers of Jill feels that the purchasing of components is inefficient. If there is decentralization in purchasing, the decision making for purchases will be close to where the components will be used, the group of engineers of Jill. The ...

Solution Summary

This solution explains decentralization of purchase management. The sources used are also included in the solution.