Feralco Ltd Business Processes - Case Study Example

Mini Report Name: Tutor: Course: Date: Introduction Feralco Ltd is a company involved in manufacture of sulfuric acid and fertilizers. The company is involved in supply chain activities of sourcing sulfur and other chemicals to be used in the manufacturing processes. Suppliers of raw sulfur are upstream from its customers (Feralco ltd). On the other hand, downstream customers include; Distributors of fertilizers and sulfuric acid Shipping partners Point-of-sale stops These suppliers are few but also deliver the product to few customers. Buyers including Feralco have a strong bargaining position and always negotiates based on price (Harmon, 2007). On the other hand, customers are many and are involved in the distribution and retail business. Supporting partners include regulators such as department of labor, industrialization and commerce (Rother & Shook, 2003). Local authorities act are regulator in ensuring workplace health and safety as well as compliance to environmental laws. The company works on a lean supply chain ensuring it partners with its suppliers for best price and quality raw materials (Slack et al. 2000). It also collaborates with its customers for best buys and deliveries. Business processes The figures below describe some of the business processes developed based on modeling concepts and flow charts. Value stream map for sulfuric acid (figure 1): The value stream map consists of information and materials flows within the company (Smith & Fingar, 2003). Information flows from the customer through requests of monthly orders. These orders are then processed by the merchandize department and relayed to the production floor. The production end will work on the deadlines provided and deliver weakly orders to customers as they had requested. On material flows, it involves industrial processes and their uptimes. The major processes are contact process and two other conversion processes. According to the production lead time data it takes 11 days while the processing time for any given information is 620 seconds. Shipping is the last point in the material flow process as it entails preparing the finished goods for delivery to the customer. Sourcing contract orders (Figure 2): This is a flow chart on the workflow process on how to source a bidder for the contract of supply of sulfur and other basic raw materials. The initial stage starts in the procurement department in which they select items then create a requisition creator. The requisition is then approved by the department head. The company makes a decision to make open bids or closed bids when the order amount is above $50,000. When it is above $50,000, it conducts sourcing analysis and will demand use of bidding flow chart in figure 3. If below $50,000, purchase order is dispatched to the closed bidder. Bidding flow processes (Figure 3): Bidding flow also starts in the procurement department in which they create and approve requisition. A decision is made by buyer if the requisition is complete and all the quotes attached. The buyer also checks and sends quotes to a number of suppliers, more than 3, for verification and confirmation. Suppliers then prepare and submit requested quotes. The company will receive the quotes and review them with the aid of requisition creator. The firm then asks all the suppliers for the final and best price. When they present their final prices, the procurement will then make decisions based on the final quotes and places an order with the supplier they have selected. Hazardous materials workflow process (Figure 4): This is also an important process for the company as it handles hazardous materials. The aim is the ensure compliance and implementation of Employee Safety and Health (EH&S). The company has an inspections department that ensures adherence to the laid down policies and procedures regarding Occupational Safety and Health. Feralco ltd prepares a catalog item requesting for Eh&S review when reviewing effects of hazardous chemicals. When the threat is below the requested level, a non-catalog form is completed. Decisions on review are made based on the order readiness for processing and approval requisition. When above delegation, the threat is communicated to suppliers through new orders having certain conditions on safety and health. Formal Sytem Model (FSM) for Feralco warehouse: This model is developed to make decisions on order fulfillment. The system reads messages on expected shipping through book and search request based on date and time. Shipment is send from the warehouse if message processing is successful and full order commitment is completed. However, if it customer fails to honor requisition, then the order is stopped and left pending for another day. The message produced in that case is for the order to be rejected. Use case diagram (Figure 6): This graph shows the dichotomy of raw material suppliers to end customers. Raw material suppliers will combine to supply a given item such as crude oil. Since they represent different classes and quality of raw materials, they all work in production of the main item, sulfuric acid. When the product is completed and delivered to the buyer, it also goes downstream through a distribution channel of wholesales who sell to retailers and then the later delivers to the end user of the sulfuric acid and its related products. Figure 1: Value Stream Map for Sulfuric Acid plant Figure 2: Sourcing contract orders- Workflow process Figure 3: Bidding workflow process Figure 4: Hazardous materials workflow process- EH&S Review Figure 5: Formal Systems Model (FSM) for Farelco Ltd Warehouse Figure 6: User Case diagram References list Harmon, P 2007, Business Process Change: 2nd Ed, A Guide for Business Managers and BPM and Six Sigma Professionals. Morgan Kaufmann Rother, M & Shook, J 2003, Learning to See: value-stream mapping to create value and eliminate muda. Brookline, MA: Lean Enterprise Institute. Slack et al. 2000, The Open University, Understanding Business: Processes Smith, H & Fingar 2003, Business Process Management. The Third Wave, MK Press www.feralco.com/UK/UK/page282-sulphuric-acid.php Read More