American Food and Grains: Commodity and Ingredient Procurement

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American Food and Grains: Commodity and Ingredient Procurement Background The company was founded in 1969 as a flour milling company, after some diversifications the company has today three major groups: Consumer foods, Agricultural foods and Restaurants. Quality The company’s most important measure of performance is the food safety and quality. They use a broader concept of quality: Quality of people, products and performance. Quality is a big issue for the company. Quality sector: QA (Quality Assurance). Procurement Procurement has five areas: commodities, ingredients, capital goods, packaging and MRO (maintenance, repairs and operating parts). The major area is commodities, followed by ingredients, creating the C&I…show more content…
These specifications could be revised. In general what QA wanted from Procurement was consistency of ingredients and suppliers. * Business units Each business unit focused in a group of products, they were evaluated based on their profitability and their objective was returns on invested capital. Since Erikson joined the company Procurement has been increasing the links with the business units. An example was the monthly procurement strategy meeting between them. Procurement also made recommendations for the unit’s ingredients. The meetings were considered very important by both. King alternatives and improvement programs Since King assumed the commodities direction, she initiated three programs to improve their own and their supplier’s performance. She was also concerned about the deterioration in the performance of Squier, a major supply of oils. * Vendor Analysis Program She wanted a uniform method to evaluate vendor performance (different areas evaluated different things). She developed, with Erikson, a instrument for rating vendors on a number of key criteria, the form was kept as simple as possible. The buyers gave equal weight to the following performance areas: technical assistance, pricing, logistics and quality. The forms were evaluated by different areas, and possible inequalities were investigated. They had them a chart “Vendor Quality x Volume of Business”, the goal was to push the vendor to the upper right-hand quarter

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