Answer guidelines: 1. Recommendations for structuring purchasing process: Wolf Motors should consider a centralized corporate level Materials Management System to consolidate buying decisions for each of the 4 dealerships. This would facilitate greater leveraging with suppliers for consistent quality-control. Economies of scale can be achieved by negotiating for better product pricing through higher volume purchasing.
An automated EDI inventory management system that interconnects with each of the dealerships and interfaces with the suppliers should be considered: The system would alert purchasing agents and suppliers when critical inventory levels are reached. Inventory Pooling between dealerships could eliminate the need to overstock; parts could be swapped between dealerships in emergency situations. A Vendor-Managed Inventory system would allow the suppliers to continuously replenish stock as needed to avoid shortages. 2.
Purchasing policies and procedures for different types of service parts and materials: Wolf Motors has to be concerned with price, quality and delivery in order to ensure after-sale customer service and satisfaction is achieved and maintained. An objective would be to reduce the number of suppliers in the purchasing process by identifying a single source distributor for as many supply and product acquisitions as possible. Working with the distributor Wolf can to identify and select only those brands or products that meet the quality standards which they have set.
By minimizing the number of transactions necessary to maintain the desired inventory levels would allow Wolf to realize additional cost savings. 3. Using Supply-Chain Management to reduce space and investment requirements while maintaining adequate service levels: With effective supply-chain management, Wolf Motors can streamline the acquisition processes and maintain efficient inventory control while reducing unnecessary inventory warehousing.
Wolf would need to analyze historical inventory turnover rates to identify the appropriate range of supplies required to be on hand in each category. Wolf would need to make adjustments to inventory levels to accommodate demands during peak seasons and promotional marketing periods. Developing the relationship with the distributors and suppliers is critical to ensure availability of supplies necessary to maintain services that continue to satisfy customer needs and demands.