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Sourcing Strategy at General Mills

Decent Essays
Developing a sourcing strategy is vital with my new “buyer” position at General Mills. I need to consider what General Mills is looking for and what best suits their company.
The first step I need to take in developing a sourcing strategy is to conduct an assessment of General Mills current spending. According to General Mills’ Annual Report, the payments due in 2014 are $3,844,200. This amount includes long term debt, accrued interest, operating leases, capital leases, and purchase obligations. At this time, General Mills can expect to spend $2,730.70 on cocoa each month.
The second step will be assessing the supply market and discovering who offers what. General Mills is a member of the World Cocoa Foundation, which helps create contact with cocoa farmers, origin governments, and environmental organizations. It is very important to consider environmentally and labor friendly options when developing my sourcing strategy for cocoa beans. General Mills does not want to risk partnering with an unethical cocoa farmer who violates labor laws using young children or putting the workers through harsh conditions.
Next I will need to conduct a total cost analysis to see how much it would be to purchase cocoa. The monthly cost of cocoa beans fluctuates monthly. In January, 2010 cocoa beans were being sold at their highest- $3,525.12. Currently, cocoa beans are sold for $2,730.20. It may be wise to purchase a larger amount of cocoa beans when the cost of them declines, to save
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