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    Produce an analysis, synthesis, and evaluation of the Arden Food inc.,.

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    Produce an analysis, synthesis, and evaluation of the Arden Food inc.,.

    ARDEN FOODS, INC.

    Bill Jones, purchase analyst in the corporate purchasing office at Arden Foods, was in the
    Process of reviewing corrugated cartons purchases. He had gathered statistics on purchases
    From each plant and it was apparent that one supplier, Sartex, Inc., had managed to
    Increase its share of total carton business dramatically over the past 20 years.

    COMPANY BACKGROUND
    Primarily a meat packer and producer of quality foods, Arden Foods operated l3 major plants
    Across the country, each of which was a profit center and autonomous within general
    Corporate policy. Each plant had its own production, sales, and administrative staff and did
    almost all of its own purchasing. Total sales last year were close to $2.5 billion.

    CORPORATE PURCHASING
    The corporate purchasing staff had traditionally been very small at Arden Foods, consisting
    of a manager, a buyer, and two secretaries. This staff was largely occupied with statistical
    Work and did some contract purchasing, only of brand items common to all plants. The
    Corporate manager of purchasing reported to the vice president of finance. When the former
    Manager retired a year ago, the new manager who took over believed a more aggressive
    stance for corporate purchasing was appropriate. One of his first moves was to visit all
    Plant purchasing agents for a duration of two days. The plant purchasing agents pointed
    out that the statistics traditionally kept at head office were primarily of interest to the
    finance people, but were not particularly useful to them. As a result, Bill Jones, a recent
    college graduate who had specialized in purchasing and materials management, was
    "borrowed" by corporate purchasing from the largest plant's purchasing office. His job was to
    See if he could not only help develop more meaningful statistics, but also to investigate
    if corporate purchasing could provide better services to the plant locations.

    CORRUGATED CARTON PURCHASES
    Bill Jones believed, and his manager agreed, that corrugated cartons represented a
    good sample area for him to start working on. Every plant purchased them and last
    Year's total volume of purchases had been about $8.5 million. From the statistics and in talking
    with buyers and purchasing agents, Bill Jones Found out that historically a large share of the
    carton business had always gone to Sartex, Inc. Sartex was a large, well-known packaging
    producer with plants from coast to coast. There was no obligation on the part of any plant
    purchasing agent to favor Sartex. Actually, most plants had at least two suppliers and in some
    cases three or four. It was simply that over the years Sartex had demonstrated they were
    tops in service, quality, and competitiveness. The purchasing agent in Arden's largest plant who
    had hired Bill originally, Explained the situation this way: As the Sartex share of Arden business
    grew, a special relationship between us developed. Increases in the cost of liner board, wages,
    or other expenses were not automatically passed on, but justifiable increases were negotiated
    between us on an annual basis. There is a very good reason why Sartex has so much of my
    business. They deserve it! In the last four years Sartex's share had increased 5 percent each
    year and was about 80% of the total current corrugated business available from all Arden
    Plants. Bill Jones forecast that if this trend continued, Sartex might become a single source.
    Bill Jones knew that each plant purchasing agent believed strongly in having full control over his
    or her corrugated purchases. As one explained: Corrugated is one product we have to have
    flexibility in and we must be able to deal directly with the local Sartex plant producing it. It is a
    short notice business and sometimes they have to turn cartwheels to accommodate the last
    minute changes so common in our Product line. Moreover, every plant has its own special
    products and requirements. The Fact that all large corrugated producers are themselves
    decentralized with plants all over the country reinforces the need to be able to do corrugated
    business locally. When Bill Jones had started this assignment, he had hoped that something
    obvious would present itself, allowing him to make some useful suggestions for improvements.
    Now it appeared that all plant purchasing agents were quite satisfied with the status quo,
    and that Arden Foods was lucky to have such a good source in Sartex. He, therefore,
    wondered how this information could be useful to corporate purchasing in the plants. Was
    there an opportunity here for Arden Foods, or was his first assignment a bust and should he
    turn to something else?

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    http://spendmatters.com/2012/01/17/corrugated-packaging-cost-reduction-strategies-some-tips-from-alvarez-marsal/

    1. MAJOR FACTS:

    This will be a general summary of what should be done in this particular scenario, it is not a turnin ready answer but rather an example to guide the student on how to best formulate their (own) response. According to the case study provided by the student, the company has 15 different locations that operate their own independent corporate purchasing staffs, which have traditionally been very small, and have only consisted of a manager, a buyer, and two secretaries. Because of their lack of expertise as well as size, the different staff primarily worked on statistical logistics with limited contract purchasing for only brand items common to all plants.

    The Corporate manager of purchasing was required to report the vice president of finance, but the management was not aggressive in regard to corporate purchasing, which changed when the previous corporate manager retired. The new manager implemented more aggressive stance for corporate purchasing by hiring (you) after visiting all Plant purchasing agents for a duration of two days. He found out that statistics kept by the Finance department weren't useful for plant purchasing agents because they did not fully understand how to incorporate these results into their budgets to improve corporate purchasing of corrugated packaging. Therefore, (you) have been tasked with this job assignment because as a recent college graduate specializing in purchasing and materials management, who works in corporate purchasing with the largest ...

    Solution Summary

    Produce an analysis, synthesis, and evaluation of the Arden Food inc.,.

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