Purchasing and Supply Management - Transperth Company of Western Australia - Assignment Example

PROCUREMENT PLAN FOR A NEW PRODUCT/SERVICE Name Class Instructor Institution, City Date Executive Summary This writing is a procurement plan that is an aspect of business enterprise which ensures buying of the right products and at the right price. The study defines the procurement requirements of incorporating the new taxi services in the operations of Transperth within Perth metro regions for the timeframe schedule running from April 2013 to April 2014. Transperth is government initiated business venture under the Department of Transport that provides public transport services in the Perth Metropolitan regions by buses, ferries and trains. The product range and market positioning of the Transperth operations run from the Perth CBD to Thornlie via Armadale, to Midland, Fremantle, Mandurah and Clarkson. Transperth runs the bus services contracted companies under the Public Transport Authority (PTA). Transperth has complementary transport services with technological facilities like TravelEasy that sends customers email notifications for convenience and as a competitive advantage tool. It also offers special services like the Circle-Route which is a cross suburban route linking various social amenities. Taxi services are the new services that have shown viable target market opportunities in the Perth metro areas. The services fall under the Small Charter Vehicle Licencing (SCV) category that defines the taxi licensing and pricing in the Perth Metropolitan area. The target market covers the discrete segments of customers that are no longer using the buses and trains for transport but lack personal cars, or prefer using hired cars, and the tourism sector. Regarding a supply chain and competitive advantage of the taxi service, inventory management team is in place to oversee quantity and location. Cash-flow arrangements glued to technological applications will enable efficient payment terms and methodologies within the supply chain between the supplier and Transperth, and Transperth and the customers, thus winning in the market. The demand forecasting is based on the March 2012 news report by the Taxis Council of Western Australia, and standing at 150 cars in the first financial year of operation with the demand varying across the year. The procurement plan provides information that regards the purchase of motor vehicles towards the implementation of the new services. The selection process will involve assessment of the suitability and ability stand of the potential suppliers. The specific cars to be procured are the TOYOTA IST and MERCEDES BENZ E-Class that comply with the Euro emission standards. Vendor selection will use RFI, RFP and RFQ procedures. The estimated procurement cost is $815,450 with the Bill of Materials including 150 cars that have a speed limit of 40 MPG. Table of Contents 1.0. Introduction 6 2.0 Background Information 7 2.1. Vision 7 2.2. Mission 7 2.3. History 7 3.0. Product/Service Range and Market Positioning 8 4.0. The New Product/Service (Taxi) Positioning and Target Customer 10 4.1 product competitors 11 5.0 Discussions 12 5.1. Product/Service Pricing 12 13 Table 1 13 Metropolitan Taxi Fares (Effective from 1 July 2012, GST inclusive) 13 5.2. Supply Chain and Competitive Advantage 14 5.3. Demand Forecast 15 6.0. Procurement Plan 17 6.1. The Procurement Plan Purpose 17 6.2 Procurement Plan Definition 18 6.2.1. Procurement Statement 18 6.2.2. Estimated Cost 18 6.2.3. Vendor Selection 19 6.2.4. Procurement Description 19 6.2.5. Selection Process & Criteria 19 6.2.6. Procurement Team 19 Table 3 19 List of Procurement Team 20 6.2.7. Contract Type 20 6.2.8. Contract Standards 20 7.0. A Bill of Materials 20 7.1 Definition of BOM 20 8.0. Managing Orders 22 9.0. Market Demand and Supply Sourcing 24 9.1. Market Demand 24 9.2. Supply Sourcing 24 9.2.1. Real Supplies’ Sourcing 25 9.2.2. Supply Sourcing Arrangements and Strategies 25 9.2.3 Supply chain diagram 25 10.0 Conclusion 28 1.0. Introduction Procurement of products and services for accompany from external suppliers is a fundamental issue in any business venture. It is through this aspect of business enterprise that the company management ensures buying of the right products and at the right price for their company, mainly through an allocated department – Procurement. This study entails procurement plan for a new product in a company. The study uses Transperth Company of the Western Australia for analysis of the topic. Transperth is the name of a public transport company that provides services in Perth metropolitan region. The company is under the management of public transport authority of the Australian State Government. Transperth offers transport services by train, bus and ferry, which are currently covering the Perth metropolitan area. The market coverage for the company thus includes Perth City, and the four areas making up the metropolitan i.e. Wundowie in the east, Fremantle in the west, Mandurah in the south and Two Rocks in the north. These suburbs determine pricing of the services from the city centre to a particular destination (Transperth, 2012). This paper studies on procurement planning for introducing taxi services in the operations of Transperth Company. The study discusses the logistics and needs to be employed in the incorporation of the new service in the company to enable the service provision as from April 2013, with a procurement plan to cover one year of the serving. This is in regard to the new service’s supply and demand in the market covering Perth metropolitan area. The study intends to define the procurement requirements of incorporating the new service in the operations of Transperth for its expansion and growth. It is quite important to consider that the introduction of the new service – taxi, will require identification of all the items the company needs to procure prior to the physical operations in the service. This is to create a financial justification for listing of the tasks to be involved towards the physical implementation of the project in the company. The financial justification depends on schedules of the tasks through timeframes, effective procurement methods and resources allocations. Thus, this paper purposes to study on the procurement planning of the introduction of taxi services in Transperth Company to expand on the transport services range in the Perth metropolitan areas. The procurement identifies potential suppliers of the requirements, their tendering and managing their supplies. The plan has a timeframe schedule running from April 2013 to April 2014, and a market positioning of the company operations geographical coverage. 2.0 Background Information 2.1. Vision Transperth has a vision of providing public transport services for the Perth metro area. 2.2. Mission The mission of the company is being an effective and reliable public transport services provider in Western Australia. 2.3. History Transperth is business venture by the Western Australia State Government through the Public Transport Authority (PTA) providing public transport services in Perth city and its environs that form the metropolitan region. The transport services are by buses, trains and ferries, with the system comprising of over 1,000 train services, nearly 400 school bus services and 11,200 timetabled bus services on a typical weekday. It has 80 ferry services that operate daily on weekdays between September and April, and lowering to 60 services between May and August. The Transperth statistics indicate 73.550 million passenger boardings on the bus services in 2008/0965, an increase of 12.0% from 694 million passenger boardings in 2007/08. In the last financial year, Transperth serviced an approximate of 66 million kilometers with passenger boardings of 131 million (PTA 2009). Transperth was launched in August 1986 following a series of reforms in the Perth's public transport sector. Initially, the Metropolitan Transport Trust (MTT) coordinated the Transperth services. The integration of public transport sector changes in 1993lead to lead to transfer of the Transperth Services to the Department of Transport. Later in 1994, Transperth introduced contracting on its customer service operations. Today, the buses and ferries publicly owned but under private operations. The newly formed public transport authority took over in the coordination of the Transperth services in July 2003. Currently, the Transperth bus network runs under the management of three bus operators, which are Southern Coast Transit, Path Transit and Swan Transit. The public transport authority has split the contracting of the services into ten areas to efficiently and cost-effectively provide services to the public. 3.0. Product/Service Range and Market Positioning The service range of Transperth is the provision of transport services by train, bus and ferry. Transperth Trains provide the transport services in Perth's suburbs with the system consisting of 70 stations for services to Thornlie via Armadale, to Midland, Fremantle, Mandurah and Clarkson. These services run between 5:00am and midnight for weekdays. In 2005 the Transperth train network served 32.652 million passenger boardings, with a rise to 42.636 million boardings in 2007/08 and increased to 54.750 million passenger boardings in 2008/09. For buses, Transperth runs the division using three contracted companies under the Government of Western Australia, the Public transport Authority (PTA). The Transperth bus transport services are owned by the public, but privately operated. The services routes are in two basic formats, including the feeder services and the routes that directly to the CBD. The feeder services run between bus stations and residential suburbs. Other services that Transperth provides are transport needs for schools and special events. Transperth's bus routes services run at varied durations with the most frequent route operating between 5am to midnight and the other local ones running to 10pm. Transperth has special services like the Circle-Route which is a cross suburban route linking various amenities and points such as shopping centers, universities, railway stations, schools. CAT (central area transit) is another Transperth’s special transport service which operates around the Perth, Joondalup and Fremantle CBDs. For NightRider special services, Transperth provides late night bus service which leaves only Fremantle on Saturday nights - between 1-4am, with routes to Como and Bullcreek. Another special service that Transperth offers is the airport services that run from route 37 Kings Park to the Domestic Terminal. In conjunction with the bus transport services, Transperth has incorporated complementary services for improving its service effectiveness and reliability to all its customers. Transperth has color-coded and numbered timetables to distinctly differentiate timings and routes. In efforts to address both services and marketing positioning amid the competitive transport industry, Transperth is currently replacing the inefficient Mercedes-Benz OC500LE bus-types with B12BLEA and Volvo B7RLE buses. Apart from the two incorporated types being in compliance with the Euro 5 emission standards, they are more efficient and less cost effective. Additionally, Transperth has complemented the transport services with technological facilities like TravelEasy that sends customers an email notification in cases of disruptions and changes to normal service timings and routes. A facility known as Google transit has a clickable symbol at all ferry wharfs, train stations and bus stops/stations that indicates the next departures from that stop. Transperth has 136213.MOBI service that allows all customers access the public transport information on WAP-enabled mobile phones. 4.0. The New Product/Service (Taxi) Positioning and Target Customer Positioning analysis of the taxi services introduction in Transperth among its other transport services is perceived by the market of the Perth metropolitan. Taxi services have shown viable target market opportunities through the continuous services that the enterprise is providing with gain of reputation. There is a significant need for the service introduction across the Perth metro as the target market. The positioning is through incorporation of the already running complementary transport services facilities through technology. Transperth’s transport services is using its large economies to scale and the market share size to introduce the taxi services into the market to fulfill the needs among the Perth metro customers. Through these three business enterprise aspects, the introduction of the taxi services to run from April 2013 has a strong competitive advantage. The target customer and market are the discrete segments of customers that are no longer using the buses and trains for transport but lack personal cars, or prefer using hired cars, and the tourism sector. The introduction of taxi services targets these specific customers with the traits described herein. This is the priority group so that Transperth does avoid wasting resources in marketing of the service to people that might not buy (Kokemuller, 2012). Transperth has made analysis on taxi services to find the target market potentiality through perceptual mapping. There is a potential connection between taxi services and the public transport services relative to the Perth metro market discrete market segments. The opportunity is the ultimate match between the public transport services that deals with buses, trains and ferry, and the taxi services that the target customer actually needs. The large economies of scale enables the pricing aspects to be relatively lower to the prevailing market ones for greater competitive advantage. The taxi services positioning in terms of scale of operation in the market depends on the Government regulations in the taxi industry. Transperth’s new taxi services fall under the Small Charter Vehicle Licencing (SCV) category that defines the taxi licencing in the Perth Metropolitan area. The Government regulates the numbers of taxis in the Transport (Country Taxi Car) Regulations Act of 1982 to ensure a balance between the consumer demand and supply of the taxis. Department of Transport reviews the need for additional taxis licenses in a period of every three years. The reviews for this year showed significantly increased demand for taxis in the Perth metro areas. This has evidenced the need for the taxi services introduction by Transperth with the Perth metropolitan areas and the customer potentiality. 4.1 product competitors The two major competitors include Swan Taxis Swan is a long server taxi firm that was foundered in 1928 and since then it has grown significantly and occupy a market share of around 45%. The operate 24hours 7days a week within the Perth and its environs. They have advanced technological and are current using smart phone to track their vehicles and customers can have access to their services any time by just making a call. Black and White taxis Black & White Taxis Black &White Taxis Company was foundered in 1919 and since then they have expanded their services to various cities in Australia. The company is one of the largest taxi companies in Australia a fleet size of over 900 taxis. They are believed to be the leading taxi company in innovation and new initiatives. There have integrated technology to control their operations. 5.0 Discussions 5.1. Product/Service Pricing The Western Australian State Government sets fare schedules for taxi fares using the Country Taxi-Car Regulations 1991. Fares across regions differ and their levels depend on the Private Motoring Index (PMI), which is the measure of the movements in motoring costs ranges. However, there are exceptional instances whereby the local taxi industry can submit relevant information in support of increasing the fares. The DoT evaluates the relevancy with basis on prevailing costs to consider the increases. Therefore, the pricing of the new introduced services – Taxi services will follow the DoT Metropolitan Taxi Fares and Guidelines as shown in table 1 below. Table 1 Metropolitan Taxi Fares (Effective from 1 July 2012, GST inclusive) Tariff 1 Monday to Friday, 6am to 6pm Flagfall $3.90 Rate per kilometre $1.64 Detention (waiting time) per hour $45.70 Tariff 2 Monday to Friday, 6pm to 6am Friday 6pm to Monday 6am All day public holidays Flagfall $5.70 Rate per kilometre $1.64 Detention (waiting time) per hour $45.70 Tariff 3 Applies when ever five (5) or more passengers are carried (only applies to vehicles manufactured to carry six (6)or more adult passengers) Flagfall $5.70 Rate per kilometre $2.41 Detention (waiting time) per hour $70.80 Source: Department of Transport 5.2. Supply Chain and Competitive Advantage Supply chain of the taxi services by Transperth involves provision of motor vehicle (product) from the qualified and tendered suppliers to transport service to customers. This purposes to span the movement and storage of the supplied motor vehicles, work-in-process inventory (control and monitoring), and the services to customers. This intends to link Transperth and the motor vehicles’ supplier on the upstream and the customers on the downstream (Hines 2004). The supply chain distribution network for the taxi services is configured to an initial 150 cars with the supplies from Japan through container on flatcar means of intermodal transport. The distribution strategy of the taxi services will be of decentralized operating control with the cars fixed in specific locations across the Perth metro area. Trade-Offs will use full truckload (FTL) rates in logistical activities with creation of a reliable and efficient inventory holding activities to reduce the total logistics costs. There will be integration of technological aspects in regard to information in the supply chain to ensure sharing of valuable information on inventory, demand signals, forecasts, potential collaboration and any other relevant transportation information to increase efficiency in the supply chain process (Mentzer, J.T. et al. 2001). The supply chain will use strategic network optimization where the initial 150 taxi cars shall be distributed as 50 cars in the Perth City, and 25 cars in each of the surrounding suburbs i.e. Wundowie, Fremantle, Mandurah and Two Rock. Tactical level of supply chain will be used through benchmarking of the taxi services against competitors and focusing on customer demand to earn the customer reputation in the industry. At operational level, the distribution planning will match the demand and forecast planning through coordination of the demand forecast in the market with time and the cars’ supplier. Incorporation of technological facilities like the e-booking, 136213.MOBI, TravelEasy, Google transit and Live train times are complementary services in the taxi services to compete in the industry. The Google transit will be configured to show any of the Transperth’s taxi car location across the metro area. Installations of ticket vending machine will enable online customers to ticketing purchase a cash ticket for the taxi services to ease financial management and address security issues in favor of the customers in the market. 5.3. Demand Forecast The Transperth’s new taxi services are forecasting a demand of an approximated 150 cars in the first financial year of operation with the demand varying across the year. Research on market availability and demand for the taxi services in the Perth metro has helped in the drawing up of the forecast to 150 cars in the first period running from April 2013 to 2014. An 11 per cent increase in demand in taxi services is leading to commuters getting stranded in the city (TCWA 2011). Peak periods that run between April and June experienced a 3 per cent of taxi bookings’ success failures last year. This also indicates a rise in demand between 2010 and 2011, as the preceding had only a 1.9 per cent crisis (DoT 2011). In off-peak periods the crisis indicated an overall rise by 38.46% in the two consecutive years. Table 2 below shows the rising demand in the taxi services in the Perth city during off-peak period of the months November. Table 2 Statistics on Taxi Services in the Perth City Perth Month Nov. 2010 Nov. 2011 % Difference Bus 7,041 7,686 9.2 Business 1,206 1,584 31.3 Convention/Conference 1,217 1,609 32.2 Education 2,060 2,395 16.3 Employment 22,919 21,732 -5.2 Holiday 15,116 15,485 2.4 Total 52,597 53,628 2.0 Source: Transport and Tourism Forum: Overseas Arrival and Departures Summary 2011 One of the directors of the TCWA, Mr Buswell attributed the 11.4 and 9.4 per cent increases in demand during the peak and off-peak periods respectively to the poor performance in the taxi industry. He suggested for release of up to 300 more taxi plates into the market to curb the crisis (TCWA 2012). This is one of the back ups for the introduction of the taxis services by Transperth in the Perth Metropolitan areas. The March 2012 news report by the Taxis Council of Western Australia shows that the 2010-2011 financial year saw Western Australia attract 15,000 Chinese visitors. The visitors are tourists who spent in the city on services including taxi. The council projects that China tourism into the state should grow to 100,000 visitors by 2020 with expenditure of over $500 million each year. Perth city is one of the major visiting points as the November 2011 tourism event saw the China Southern Airlines land their first direct flight in Perth. 6.0. Procurement Plan The procurement plan for the new service in the Transperth operations has the plan with a project name, New Transport Service, Taxi. The performing division of the plan is the procurement department of Transperth under a performing group, the Transperth administration. The product/service in the project is Taxi services. 6.1. The Procurement Plan Purpose The sole role of this procurement plan is to provide information that regards the purchase of motor vehicles towards the implementation of the new service introduction into the Transperth transport services. The plan is discussing how the how vendors of the cars and related services will be chosen, the kind of contract(s) that the procurement will use and the individual capacities required at each stage of the process. Thus, this procurement plan requires approval of the appropriate Transperth administration representatives before its implementation. 6.2 Procurement Plan Definition 6.2.1. Procurement Statement The procurement plan is for the acquisition of 150 cars for the initial phase of the introduction of the taxi services in the public transport services by Transperth for expansion of its operations across the Perth metropolitan region. 6.2.2. Estimated Cost Table 2 Estimated Cost of the Procurement Plan Type Description Cost (‘000) Confidence Machineries Cars $ 815,000 +/- 5% Software Licenses $ 250 +/- 5% Services Implementation $ 200 +/- 20% Total $ 815,450 +/- 10% 6.2.3. Vendor Selection The selection team of the vendor in this procurement plan will use a Request for Information (RFI). The team will collect written information from various cars suppliers to find out on capabilities of the suppliers. The documentations together with their respective request for quotation (RFQ), requests for proposal (RFP) and request for tender (RFT) shall be compared to list the best supplier. 6.2.4. Procurement Description The specific cars to be procured are the TOYOTA IST and MERCEDES BENZ E-Class that comply with the Euro emission standards. The cars must be four-seaters, and four-wheel drive. The software must comply with the Government of Western Australia, Department of Transport regulations on licensing and insurance cover. Among the implementation services shall be the transport and importation costs coverage to delivery at the Transperth Headquarters in the Perth City. Application of the procurement modules shall be used to organize and oversee the purchasing of cars through automating workflows and consolidate ordering for providing the purchasing status online. The module may be integrated with any other module deemed necessary by the management in due course of the procurement process. 6.2.5. Selection Process & Criteria The selection process will involve examination of the capability and suitability of the potential suppliers to supply the taxi cars for the introduced service in the Transperth public transport services. This is appropriate, proportionate and relevant to the procurement of the cars. The selection criteria will be based on business criminality and probity checks, professional and technical qualifications, and economic and financial standings of the supplier. 6.2.6. Procurement Team The procurement team shall be made up of the following listing in table 3. Table 3 List of Procurement Team Name Phone / Email Procurement Role Dr. Wyr Jose jwyr@transperth.com Project Manager Ms Jun Devser devser@transperth.co.uk Legal Counsel Mr. Kurrh Fabio +31703104 PPS Contract Administrator Dr. Mose Gurrt +31409878 Logistics Officer Ms Kath Himen Kathial@gmail.com Finance Officer 6.2.7. Contract Type The procurement of the cars to be used in the introduced services will use fixed price contract to reduce uncertainties in all ways possible. The financial planning and budgeting has set aside the funds for the cost of the procurement of the cars, and thus, the supplier will have to comply with this type of contract. 6.2.8. Contract Standards The contractors will have to be in compliance with public policy regulations and meet all the requirements of the Public Procurement Authority. The contractors must include a copy of their past deliverable quality review. 7.0. A Bill of Materials 7.1 Definition of BOM A Bill of Materials (BOM) is a list of material defined in quantities and types (depending on grades) that a procurement plan requires in purchase to carry out its intended operations (Cooper, Lambert and Pagh 1997). The development of the list is generated through analysis of the procurement document blueprint. This is also known as the Material Take Off List (MTOL) in some disciplines. BOM of a procurement plan also includes the weights measures of the materials under procurement. This is particularly important in the building and construction industry to enable the supplying company to determine the appropriate quantity in weights terms of the material and make logistic arrangements that involves the supply. On the other hand, International Society of Automation defines a Material Take Off (MTO) as the analysis of the drawings of a procurement plan to help in determining the material requirements to accomplish the procurement design. It is the MTO that thereafter, is used to make a bill of materials (BOM). The society further argues that inspection does not play any role in creation of a bill of materials. Thus, procurement only takes place after a complete creation of the bill of materials. This procurement plan has a bill of materials defining the particular cars that Transperth will need in its taxi services provision. The Bill of Materials includes 150 cars that have a speed limit of 40 MPG, and weighing between 1,200kg and 1,400 kg net weight. The cars shall be 100 TOYOTA IST and 50 BENZ E-Class types with costs at $3,900 and $8,900 respectively. The cars should be fitted with ice cold A/Cs and snow tires among others as shown in the table below. Bill of material ITEM DESCRIPTION VENDOR QUANTITY 1 Vehicle Speed limit of 40 MPG, weighing between 1,200kg and 1,400 kg net weight. The cars shall be 100 TOYOTA IST and costs at $3,900 Toyota 100 2 Vehicle Speed limit of 40 MPG, weighing between 1,200kg and 1,400 kg net weight. BENZ E-Class types with costs at $8,900 respectively Benze 50 A top light 150 cold A/Cs and snow tires 750 GPS 150 Electronic payment system 150 Medillion and licensing 150 . 8.0. Managing Orders The operations at the Transperth in provision of the newly introduced taxi services within the Perth metropolitan regions will use warehouse management system in the supply chain to control the movement of the cars to be procured. The systems will help in processing all the associated transactions in the procurement of the cars. The shipping of the cars and their receiving will be automatically run by the warehouse management system in the Transperth new venture processes. The systems will also optimize and direct the taxi services put-away with basis on real-time information about the services bin utilization status. The main objective of using this management system is to incorporate computerized procedures in handling the receipt of the cars and the taxi services returns into a warehouse facility. Through this, the taxi services will be managed by modeling and managing the logical representation of the physical services offer for a seamless link to booking and turn up. The inventory policy for the taxi services for the first one year will consist of full utilization of the 150 taxi cars throughout the year to maximize on profits. For buffer stock scheme, the pricing shall use the single price scheme because of the pricing control by the Government. This implies equal floor price and ceiling price throughout the year. This scheme still favors the new service provision as the revenues across the year are averaged to the government fixed pricing of the taxi services. 9.0. Market Demand and Supply Sourcing 9.1. Market Demand Demand is the level of consumers’ willingness to buy a product or service at the prevailing prices. The demand of taxi services in the Perth metropolitan regions exist in two types of demand i.e. independent demand and dependent demand. Independent demand is level of consumer buying willingness influenced only by the prevailing market prices. The new taxi services by the Transperth in the Perth metro area has considered this type of demand across the market, and thus using relatively low pricing compared to the government fixed pricing. This is attributed to, by the large economies of scale that the Transperth is already operating onto for a high competitive advantage. On the other hand, dependent demand also exists in the taxi services market in the Perth metro. Dependent demand is the situation of customers’ willingness to buy level is influenced by not only the pricing of the product, but also by the demand for other product. The demand for the products in this situation can either move in the same direction or in the opposite direction. The demand for the taxi services within the Pert metro is influenced by the demand for any other means of transport in the city and its environs. A rise in the demand for the ferry, train or buses transport services could either lead to a decrease or rise in the demand for the taxi services. A larger increase in demand for the former transport services may imply a shortage in the services hence raising the demand for the taxi services. 9.2. Supply Sourcing 9.2.1. Real Supplies’ Sourcing Sourcing of real supplies for the operation of the new taxi services by Transperth requires the major company of the ingredient, which are the cars. The cars shall be supplied by Lexus motor vehicle Company of Japan. Lexus is one of the Japanese automaker under the Toyota Motor Corporation. It is the Japanese largest selling cars with its outstanding Lexus marque brand. The company it headquartered in Nagoya, Japan with its over 70 countries premium car sales. The company has operational centers in the United States, California, Brussels, Torrance and Belgium. The supply award to Lexus Company is attributed to its high quality cars and supply reputation across the world. 9.2.2. Supply Sourcing Arrangements and Strategies Supply sourcing arrangements will involve strategic sourcing processes to evaluate the supply of the cars for the taxi services. This shall be through assessment of the supply market and total costs to identify the suitable supplier. The tactual sourcing process shall be used for tendering of contracts and making other purchasing production decisions. The tactual process shall also identify customer habits and create inventory decisions. A relationship with the suppliers will only be transactional as additional supply may take a long period of time after the preceding one. 9.2.3 Supply chain diagram 10.0 Conclusion According to TCWA (2012), Perth city is growing with a description of dramatic population growth that will require a smarter way in accessing the CBD and its environs. This means anticipation of the growth should be put in place for economical, efficient and sustainable way to travel around the city. This is pretty evident that the market demand for the taxis is on the rise in the Perth metropolitan regions. The procurement plan for the new cars to engage a new service of taxi in the Perth Metropolitan areas defines the need to purchase initial 150 cars from the Lexus Company in Japan. The Warehouse management systems will be employed in technological application of Auto ID Data Capture (AIDC) to ease management. The collected data shall then be synchronized with, or put under a real-time wireless transfer to a central database. The database will be the sole source of useful reports information regarding the status and flow of the services within the metro, all geared toward strengthening competition in the industry. Although the pricing of the taxi services are determined by the Department of Transport, Transperth taxi services will use its large economies to scale to relatively offer lower prices for market reputation. The distribution of the services will be across the Perth City and its suburbs. References Cooper, C., Lambert, D. & Pagh, J. (1997). More Than a New Name for Logistics – A Supply Chain Management: Journal of Logistics Management, pp 1–14 Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett-Larsen, T. (2007). Complementary Theories to Supply Chain Management: An International Journal, Volume 12 Issue 4, 284-296. Hines, T. 2004. 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