MARCH 2012MANAGEMENT OF CHANGEWRITTEN ASSIGNMENT
Important information for candidates
You are required to produce a formal report in order to answer the case studybelow. You should also refer to the Assessment Criteria sheet enclosed withthis case study. Your report must be referenced and include an up-to-dateBibliography. Failure to produce a formal report will result in a lower gradebeing awarded. Please read the questions carefully in order to avoidproducing a report that does not address the case scenario.Megasta CorporationMegasta Corporation has invested $16 million in the development of
‘CALSIG’, a bespoke data processing software, to manage its global
procurement operations. When the system is installed it will allow externalsuppliers to connect on-line and register offers to supply materials,equipment and services that Megasta purchases for its construction sitesaround the world.Megasta Procurement, the in-house outsourcing service, will centralise allMegasta requirements, post them on-line and select from the offers fromapproved suppliers. The suppliers may also apply to register for approval forforthcoming business. Registered suppliers can see the main details of allcontracts once they are issued, including price and delivery, and adjust theirfuture bids accordingly.
Chris, vice president of Procurement, has been the main sponsor of ‘CALSIG’
in Megasta and, though the project is some 16 months behind schedule (and$2 million over budget), he is heavily committed to bringing it into servicebecause of the savings from replacing current procedures of prolongedtendering and negotiation. It is expected the savings will amount to $12million per year in administrative costs. It will, claims Chris, also be attractiveto suppliers because purchases will be aggregated across the world, andsupplier profitability will be assured.