The West Coast City (City) had a staff of 7325 with an annual budget of $800 M. The City was situated by the ocean with a backdrop of snow-capped mountains. It boasted bike lanes and pedestrian walkways along with parks, lakes, and a well-developed skyline with panoramic vistas. The City was a perennial top 10 location for places in the world to live. Its financial reputation was measured by a AAA bond rating. The City won awards on its urban planning and its real estate values continued to trend with a general increase year-over-year. The location of the City made it a very attractive location for new immigrants. The City had a very cosmopolitan flavour and relaxed life style. As with most urban centres, the City had its share of social problems such as inadequate accommodations for low-income people, substance abuse problems, and a large contingent of homeless citizens. From an administrative perspective, the City senior management team, were concerned that the current supply chain structure may not be meeting stakeholder expectations. They were uncertain whether to have a centralized, decentralized, matrix reporting or a hybrid form of reporting structure. They were also facing a potential staffing increase to support a sustainable supply chain policy. One consulting firm had estimated a 5% annual savings from the existing budget could be achieved with the right reporting structure in place. SUPPLY MANAGEMENT ORGANIZATION The City Supply Management staff had experienced considerable turnover for several years. The (8) union staff consisted of (4) contract specialists, (2) assistant buyers, and (2) administrative clerical support positions. In addition, there was (1) contracted buyer position which was being temporarily funded to keep up with the purchasing activities involving capital projects. There was (1) Manager of Supply Management to oversee the City Supply Management services. She was also responsible for an inventory and distribution branch largely to provide materials for the Engineering Services department. The Citys Library, Police, Fire, and Parks Board branches managed their own autonomous purchasing functions. The Manager of Supply Management had no line authority over these other buying personnel. There was an informal sharing of supply and contracting information between the various buying groups involving hundreds of suppliers. The annual City-wide spend which all of the supply management staff was directly involved with was estimated at $250-300 M. The fractious supply management model led to multiple smaller agreements between the various City branches and departments often with the same suppliers with various pricing agreements in effect. MANAGER OF SUPPLY MANAGEMENT CONCERNS In response to demands from newly elected Councilors, the City senior management team wanted to introduce a more sustainable supply chain policy. They agreed to fund (1) new position for the City Supply Chain at a cost of $75,000 per year. After on.

1. The West Coast City (City) had a staff of 7325 with an annual budget of $800 M. The City was
situated by the ocean with a backdrop of snow-capped mountains. It boasted bike lanes and
pedestrian walkways along with parks, lakes, and a well-developed skyline with panoramic
vistas. The City was a perennial top 10 location for places in the world to live.
Its financial reputation was measured by a AAA bond rating. The City won awards on its urban
planning and its real estate values continued to trend with a general increase year-over-year. The
location of the City made it a very attractive location for new immigrants. The City had a very
cosmopolitan flavour and relaxed life style. As with most urban centres, the City had its share of
social problems such as inadequate accommodations for low-income people, substance abuse
problems, and a large contingent of homeless citizens.
From an administrative perspective, the City senior management team, were concerned that the
current supply chain structure may not be meeting stakeholder expectations. They were uncertain
whether to have a centralized, decentralized, matrix reporting or a hybrid form of reporting
structure. They were also facing a potential staffing increase to support a sustainable supply
chain policy. One consulting firm had estimated a 5% annual savings from the existing budget
could be achieved with the right reporting structure in place.
SUPPLY MANAGEMENT ORGANIZATION
The City Supply Management staff had experienced considerable turnover for several years. The
(8) union staff consisted of (4) contract specialists, (2) assistant buyers, and (2) administrative
clerical support positions. In addition, there was (1) contracted buyer position which was being
temporarily funded to keep up with the purchasing activities involving capital projects.
There was (1) Manager of Supply Management to oversee the City Supply Management
services. She was also responsible for an inventory and distribution branch largely to provide
materials for the Engineering Services department.
The Citys Library, Police, Fire, and Parks Board branches managed their own autonomous
purchasing functions. The Manager of Supply Management had no line authority over these
other buying personnel. There was an informal sharing of supply and contracting information
between the various buying groups involving hundreds of suppliers. The annual City-wide spend
which all of the supply management staff was directly involved with was estimated at $250-300
M. The fractious supply management model led to multiple smaller agreements between the
various City branches and departments often with the same suppliers with various pricing
agreements in effect.
MANAGER OF SUPPLY MANAGEMENT CONCERNS
In response to demands from newly elected Councilors, the City senior management team
wanted to introduce a more sustainable supply chain policy. They agreed to fund (1) new

2. position for the City Supply Chain at a cost of $75,000 per year. After one-year this position
would be reviewed to see if it could be justified. The Manager of Supply Management was
concerned with:
finding qualified staffing resources with sustainability expertise;
ensuring that departmental budgets and operational budgets could be met and;
successfully implementing the sustainable purchasing policy as a City-wide initiative.
Questions:
1.Your group has been hired as supply chain consultants to advise the City on a new reporting
structure. What strategies and tactics should your consulting team consider?
2.Develop a business case to support the type of reporting structure you would recommend to the
City senior management team?