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Maggie Agnelli- the purchase manager of purchase APC’s European Division. Branco- a custom packaging supplier; only supplier of all custom packaging cartons to APC In last 3 quarters, branco’s QUALITY PERFORMANCE RATING had shown a steady decline. Maggie could not source a custom product from a different supplier easily European sales were 150 million euro a year. Branco’s rating dropped below the minimum acceptable standard of 3 The relationship & trust between them had taken 8 years to solidify.

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Branco's poor  quality performance Methods Equipments Labour Material

The last Branco shipment of defective packing cartons resulted in 30% production loss for an entire day’s( two shifts) production. At the full production, the plant ran 2000 cartons/hour, with three operators at 28euro/ hr  each.

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Meeting with Branco and basic issues In tight market- Relationships are everything Action to be taken  w.r.t.  non-conforming supplier Supplier evaluation Single sourcing Continuous improvement Quality Measurement Supplier rating & goodwill

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A commitment to strict  quality standards in purchasing Suppliers were all rated on the same scoring criteria Rating criteria : quality(50%), delivery $ continuous performance The first  KPI  to observe is within the area of quality and this corresponds to competency, capacity, control and consistency within the framework . The rating in this area is just under standard & implies that quality of the products has issues that will affect APC Europe’s ability to produce their final products on schedule .

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1 . More skilled staff 2.Better production processes 3.Better machinery, better monitoring before dispatch on the part of supplier. 4.Branco is sole supplier so they have had to adapt their operational procedures to accommodate the demands of APC Europe. 5.Corrective action and responsiveness to non-compliances. 6.Increase agreement size. 7. Increase supplier involvement in quality certifications programs. 8. APC should outsource for new supplier quickly or try to improve the existing one.

MGSC5123-WINTER 2021 SECTION-13

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