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Iowa Elevators Case

Satisfactory Essays

Summary:
A summary of the current situation at Iowa Elevators from a purchasing and inventory cost perspective is that Iowa Elevators is currently in charge of two divisions—grain-handling and marketing and farm supplies and the company has been experiencing decreasing profitability. Scott McBride was asked to re-evaluate the purchasing department and implement a five year cost-savings plan to save the business.
Analysis:

Current Problems
To get an understanding of the presentation I would give at the executive management meeting I have to outline the current problems at Iowa Elevator. There are currently five problems I have identified with Iowa Elevators. 1.) With human resources, there are currently certain staff members have too …show more content…

See if there are additional costs that can be identified and saved with the travel coordinator. 5.) Analyze the 11,926 million in unclassified spending. Figure out where the money is going and cut any loses.
Long-Term Solutions Based on a Hybrid Purchasing Structure
Long term solutions to these issues is: 1.) Restructure Scott’s purchasing department into a hybrid purchasing department. Grain-handling and marketing division will continue to be decentralized but the farms supplies division will be centralized. Because 75% of revenues still come from grain-handling, keeping these field elevator managers happy with their purchasing opinions is very important. This department will have a supervisor, expediting clerk, and analyst. Since the farms supplies division is smaller but more costly, this division will be centralized and decisions will be made at the corporate office. This division will have a supervisor, expediting clerk, analyst, and two buyers to help with the purchasing process. This would take the purchasing power away from the individual elevator managers, but allow Scott to see what areas need improvement and all the data will go directly to the corporate office. 2.) Introduce an ERP system that handles supply chain management with different suppliers, purchasing information and data and all HR and IT management. This ERP system will bring records to a centralized location for

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