Reference no: EM133310677

Case: HF Electronics Ltd founded in Brisbane in the early 1960s by three young electronics engineers quickly gained a reputation for their highly reliable high frequency (HF) radio transceiver systems that initially provided reliable communications for outback stations, supported School of the Air, and even the Royal Flying Doctor Service with supporting technologies like "on ground" remote signal repeater stations.

The company has grown over the last 60 years and has gained a worldwide presence not only in HF radio systems which are still at their core, but also a range of advanced electronic systems (such as metal detection, Satellite RF systems, etc.) for mining and the military across the globe. Their systems use state of the art (Industry 4.0) technologies including artificial intelligence to ensure secure communications and data transmission.

The company has established facilities in the United States, Canada, India, Mexico and Dubai with the main manufacturing plant still in Brisbane. Recently, the Board of Directors met to review the company's strategic plan for the next five years. Given the impact that Covid and now also the war in Ukraine have had on the supply chain, they have suggested a strategic review of the company's procurement strategy. However, appreciating the depth of this task, the Board have initially requested a report that outlines an appropriate approach to the company resources required to undertake the review, and any other resources potentially necessary to achieve a definitive result.

As the newly appointed Chief Procurement Officer (CPO), it is your responsibility to produce the report. Given your new position, this is an important opportunity to not only gain an in-depth understanding of the company's procurement profile and identify potential financial benefits from any future restructuring, but also consolidate the procurement's strategic position within the organisation. HF Electronics Ltd have close to 600 staff with annual sales approximating A$400 million per annum. Currently, third-party spend on both direct and indirect costs represents about 60% of annual sales.

Question 1: A procurement evaluation report where you tell how outsourcing can harm the HF Electronics Ltd if they use it as their current procurement method.

Question 2: Also explain how The Kraljic procurement model be beneficial to HF electronics Ltd.