Assignment title
Assignment Task: Read the following Scenario, and prepare a Report with the guidelines provided.
Report – 100 Marks [6000 - 8000 Words]
The Case of Foodie Global
Introduction
Foodie Global is a well-known retail hyper store which started as a small family grocer in Manchester UK
some 50 years ago. The organization’s business model has grown exponentially over the past ten years,
opening new outlets in Liverpool, London, Oxford, and Birmingham. Within recent times, they have also
diversified into nontraditional products, at least for them, selling a new brand of light weight folding bikes
called Foldie Smart, from a large bespoke bicycle manufacturer based out in Pontypridd, Wales called
Bikeinc. In 2018, profits rose to 1.3 billion pounds with many sales at the time coming from walk in
shoppers, especially on holidays. However, by the end of 2019, many shoppers chose to buy online.
Foodie Global has never offered online shopping in a major way and had lost significant sales and market
share due to this.
Over the years, the relationship with their first-tier vendors were not properly managed, with key suppliers
swearing never to do business with them again. This had led to shortages and high prices, since they were
forced to buy from third party sources. The CEO at the time, Lisa Foodie, in her last board meeting,
indicated that supply chain drawbacks of the hyper market was the main cause of their poor performance
in 2019, which was expected to continue throughout the following year. She said one of the long-term
goals of the retail chain was to understand the customers’ requirements and meet them in the most cost-
effective manner. She said vendors have been complaining about late payments and rush orders every
Monday, coupled with software breakdowns and login challenges of the FG’s enterprise platform. Lisa
later recognized that the supply chain lacked the much-needed integration which everyone, including
suppliers, believed was one of the main causes of the supply chain challenges the outlets were facing. In
continuing the issues surrounding suppliers, over the years, Foodie Global adopted the strategy of
widening their scope for competitive prices. This has led to the growth of a supplier base of some 500
vendors, many of them supplying similar and identical goods, both locally and internationally. In a recent
meeting with the CEO, it was then reported that the transaction costs and the diligent management of the
supplier portfolio was urgently needed. Transaction costs had spiraled significantly where in some cases,
it costed more to acquire the good than the actual purchase price. Lisa subsequently made it clear that they
were not in a financial position to increase staff to manage such a large vendor portfolio and included the
task of having Alan, her newly appointed supply chain manager to immediately present workable
solutions to resolve both issues.
Lisa Foodie, being the great granddaughter of Anthony Foodie, the founder, was keen on bringing the
business back to its glory days. She believed that diversifying into other products and services could
potentially turn the organization around. She felt that the bicycle sales, which could only be ordered
through their stores, could be expanded into cycling accessories and even a range of electrical bikes that
could be sold by them exclusively. But there was a problem with Foldie Smart orders from Bikeinc, their
current bicycle dealer. Firstly, customers would order via a third-party online site called Spot Bike. From
there, the customer will be directed to Foodie Global. This was a make to order arrangement where
Bikeinc afforded a range of customization for these units. Customers were complaining about lead-times
exceeding the stipulated time of arrival and many products of late were being returned due to faulty
brakes. For some reason, Lisa preferred a methodological approach to resolving this issue but chose to
take on the task on her own.
With many of their competitors now trading online, Lisa felt that Foodie Global must revamp their current
supply chain model and adopt the most suitable technology to transform their business swiftly. Alan
Harvey, the newly appointed supply chain manager who worked many years in the manufacturing
industry was held in high esteem. Alan, though new to the retail sector business, had a strong ICT
background and had successfully established long term relationships with global automobile vendors.
This was partly due to his strategy of allowing ICT to improve collaboration and communication. But
Alan’s problems extended to other major issues. Two of their major meat suppliers based in Australia,
reportedly hiked their prices by 15%, which was not the usual market price of the industry at the time.
Negotiations had failed recently with the last supply chain manager Tim O’Neal who eventually quitted
the job after this outcome. Lisa Foodie was not at all pleased, believing that with the right negotiation
skills, they could get the supplier to agree to more favorable terms. During the job interview, Alan had
then boasted of negotiating with several first tier suppliers in the automobile industry, successfully
negotiating long term contracts with a list of favorable concessions for his company. Alan was now
expected to meet with the suppliers in Sydney in three weeks, but not before he developed a negotiation
strategy. Alan was also reminded by Lisa, that he must have a BATNA (Best Alternative To a Negotiated
Agreement) in the event that things don’t work out. One such BATNA would be to select new suppliers
from the Australian market.
Port issues at Felixtowe had affected the stores severely, another contributor to the decline in profits.
These disruptions have seemingly gone beyond the control of the group. However, Lisa was keen on
having Alan develop a long-term plan to mitigate against further vulnerability, especially around the
Christmas season where stock build up was common. Lisa also felt that another port could be considered
along with a revamping of their logistics and transport system. There have been other challenges as it
pertains to the movement of goods, not only from the port but from the manufacturers and suppliers.
Traditionally, FG has done business mainly with NVOCCs but Lisa thinks that freight forwarders can do
a better job ever since several of their shipments have been arriving damaged or never arriving at all under
the present arrangement. Alan needs to advise Lisa on which arrangement might be best for the
organization going into the future. With other projects on his agenda Alan had decided to bring Susan
Wilson, another recent hire who just completed her first degree in business. He felt that she must be
trained to gain an in depth understanding of the importance of containerization and other key aspects of
logistics before she could be assigned to the port issues project. With plans to expand their imports from
China and the Far East, the use of LCs was quite common. Susan would also be exposed to this form of
payment. There were some concerns though since there have been instances where the details of the LCs
are ignored with the relevant information not being shared by the parties. Mistakes were also made in
choosing the most appropriate incoterms, which increased financial risk for FB
At the end of it all, Lisa requested that Alan present to the board, an in-depth report on the status of their
supply chains, providing recommendations and describing several theories that can be applied. You must
now answer the following questions which will assist Alan and Lisa.
IN Case Study
a) Learners must critically analyze some principal theories, concepts and principles of supply chain
management and the contribution they can make towards FG’s objectives. You must go on to
discuss why it remains important for large retail hyper markets such as FG to have an effective
supply chain, considering the fact that supply chain objectives must be linked to the
organization’s business strategies. With FB’s current siloed approach to its supply chain, discuss
the features and boundaries of an integrated supply chain and the benefits it can bring in
resolving some of FG’s challenges. [15 marks]
b) With the urgent need for Alan to address the current situation at the organization, critically
assess how Alan’s ICT solutions, applied in his previous role could improve the supplier
relationships and online communication. In applying a critical analysis of a wide range of
principals, skills, techniques and practice, discuss how Alan can reduce the spiraling transaction
cost during the procurement cycle, while it continues to maintain a supplier relationship,
especially with their key vendors. [15 marks]
c) Evaluate how Lisa can correctly apply a JIT methodology along with forecasting systems, to
provide a seamless operation to the bicycle deliveries. You must as well, critically discuss a
range of complex skills, techniques and practices, that could be applied to reduce lead times,
something that would be welcomed by the Bikeinc’s customers. Finally, you must help Lisa
develop an original and creative project-based strategy towards successful supply chain
management, focusing on addressing the current JIT concerns. [15 marks]
d) In the event that Alan is unsuccessful with the negotiations in Australia, he must proceed to
develop a supplier selection strategy. Critically review and research the importance of a robust
supplier selection process and the relevance of a collaborative buyer / supplier approach after
contract award. Alan is also expected to develop an effective negotiation strategy, developing a
list of steps that must be entailed. [15 marks]
e) With Lisa now hinting the need to revamp the logistics and transport system, even considering a
new port for their business, you must critically discuss the expected challenges of a port
selection, along with the issues surrounding the movement of various goods along with the
choice of transport mode. [10 marks]
f) Critically review the advanced and specialized skills required by Susan to carry out shipping
procedures in an international market. You must also discuss the strategic role of
containerization and NVOCC in helping FG regain their competitive edge. Considering concerns
raised with LCs and shipping terms by FG, conduct a critical review of a host of complex and
new issues that are now surrounding LCs and shipping overseas, especially from China, along
with the interpretation of shipping terms. [15 marks]
g) Alan must present a report to the board with an overview of the challenges FG now faced,
summarizing the solutions with a clear justification of the strategies suggested and comparing
the success of a similar organization with similar issues described in the case. This must be
presented in the form of a PPT [15 marks]
