Supply Chain due diligence
The acquisition of the new operations in Corsica and Sardinia was based largely on emotional and strategic considerations (e.g. spreading out revenues over the entire year and being less dependent on snow conditions) rather than on detailed financial evaluation, other than a high level revenue projection. The hotels have charm and character, fitting perfectly the “home” philosophy that has been nurtured by the Rigodets, which was a key motivation for the acquisitions.
It has now been decided a posteriori to conduct a more in-depth due diligence to assure there are no hidden risks and to establish benchmarks for the expected business performance for the consolidated group.
You have been asked to draw up a checklist of areas of investigation to support the due diligence for the supply chain processes.
??IP – “F&M Hotels and Spas” P a g e 12 | 16
Consider the following areas of investigation;
• Inventories
• Purchasing resource
• Transportation
• Warehousing
What information would you request for your evaluation? You should draw up a table showing the person/function that should provide the information, the nature of the information required and the units of measure (e.g. number of cases per annum)
What would be your priority areas and why?
It has now been decided a posteriori to conduct a more in-depth due diligence to assure there are no hidden risks and to establish benchmarks for the expected business performance for the consolidated group.
You have been asked to draw up a checklist of areas of investigation to support the due diligence for the supply chain processes.
??IP – “F&M Hotels and Spas” P a g e 12 | 16
Consider the following areas of investigation;
• Inventories
• Purchasing resource
• Transportation
• Warehousing
What information would you request for your evaluation? You should draw up a table showing the person/function that should provide the information, the nature of the information required and the units of measure (e.g. number of cases per annum)
What would be your priority areas and why?
Q2 Consolidation plans (10 points)
The Rigodets wish to integrate the recently acquired operations into the group to exploit the potential synergies and reinforce the group identity without detracting from the “home” ambiance.
They wish to move forward in several steps;
• Look for the “quick wins” to deliver early returns on their investment, such that the existing customer base, with whom the hotels and restaurants have enjoyed a high degree of loyalty, do not perceive significant change.
• Continue with a second level of consolidation to drive longer terms benefits, reinforcing the house style, driving up the occupancy rates, bringing a larger choice of best sellers wine to all customers and delivering further cost savings.
A first high level review has already identified potential synergies in;
• Consolidating purchase volumes
• Improving transport utilization
• Service to customers (availability of products: OTIF)
• Streamlining the organization and resources (especially with respect to seasonal
rebalancing)
You are required to examine each of the above areas;
??IP – “F&M Hotels and Spas” P a g e 13 | 16
• Giving examples of the commodities or resources you would target
• What indicative savings would you expect and budget for? Justify your reasoning.
• What priority would you accord?
• With which other functions would you need to align and why?
Q5 Staff scheduling (30 points)
They wish to move forward in several steps;
• Look for the “quick wins” to deliver early returns on their investment, such that the existing customer base, with whom the hotels and restaurants have enjoyed a high degree of loyalty, do not perceive significant change.
• Continue with a second level of consolidation to drive longer terms benefits, reinforcing the house style, driving up the occupancy rates, bringing a larger choice of best sellers wine to all customers and delivering further cost savings.
A first high level review has already identified potential synergies in;
• Consolidating purchase volumes
• Improving transport utilization
• Service to customers (availability of products: OTIF)
• Streamlining the organization and resources (especially with respect to seasonal
rebalancing)
You are required to examine each of the above areas;
??IP – “F&M Hotels and Spas” P a g e 13 | 16
• Giving examples of the commodities or resources you would target
• What indicative savings would you expect and budget for? Justify your reasoning.
• What priority would you accord?
• With which other functions would you need to align and why?
Q5 Staff scheduling (30 points)
Considering the seasonal operating calendar, the group decided to evaluate if it is possible to schedule the staff so that its employees can work in different hotels along the year. In that way the group will be able to propose more full-time contracts.
In order to have a first idea about the feasibility of such a project, you were asked to make a study about all the information that should be taken into account during the project. You also have to decide which hotels should be involved in this project.
You have to take into consideration the following issues:
- Labour management impacts (10 points)
- Operational impacts
o Front Office (8 points)
o Back Office (8 points) – Other impacts (4 points)
In order to have a first idea about the feasibility of such a project, you were asked to make a study about all the information that should be taken into account during the project. You also have to decide which hotels should be involved in this project.
You have to take into consideration the following issues:
- Labour management impacts (10 points)
- Operational impacts
o Front Office (8 points)
o Back Office (8 points) – Other impacts (4 points)
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