Tasty Cola Company

Tasty Cola Company

The business’s name is Tasty Cola Company, and it will be in the non-alcoholic beverages industry producing soft drinks. The Company was established in January 2020 and is still in its inception stage. It is located in Virginia and is currently supplying products to seven states besides Virginia. Since it just opened, the Company performs most of the business activities in-house, especially those that do not require a substantial amount of capital to initiate. Tasty Cola, however, intends to outsource several business processes that require significant amounts of capital to start to outside companies. Some of the business processes that the Company performs in-house include preparation of the syrupy concentrate used to prepare the final drink, filling, and packaging. Conversely, the main activities that will be outsourced include by Tasty Cola include accounting, bottling, and distributing. The Company will outsource accounting since it is still growing and lacks the appropriate expertise and experience required to perform the activities. Besides, it understands the disadvantages of in-house bookkeeping that face start-up companies, including costly bookkeeping mistakes, expensive and outdated in-house financial training, potential internal fraud, and the higher costs for in-house accounting staff. In addition, the Company will outsource bottling services for various reasons, including to free up internal resources, to become more efficient and competitive, stay focused on the core business, and to save time and resources involved in bottling. The Company also plans to outsource water treatment to the municipality.

Performance Targets required from selected vendors

To select the best vendors to help with the bottling and distribution services, the Company is currently conducting research and interviews on several applicants to determine various aspects. Quality is an essential requirement when selecting the type of vendors. The Company looks for suppliers who endeavor to maintain the right quality as produced by the Tasty Cola. Vendors must commit not to alter the quality of the product by all means. Production capacity is another important factor. All suppliers should be able to scale production in response to Tasty Cola’s production cycles. Another crucial factor is the vendor’s ability to minimize risks. The Company evaluates performance metrics such as overall delays and average response time to examine the vendor’s reliability in managing risks. In addition, Tasty Coca evaluates a vendor’s waste reduction practices, waste management strategies, and material procurement procedures. In accounting, the Company is looking for firms with a strong sense of ethics, high accurate levels, trustworthiness, reliability, and a strong sense of accountability.

Types of contracts for different vendors

The bottling and distribution contract will be a fixed term contract. The Company will agree with the vendors on a specified period, after which the two can negotiate and renew the contract or go separate ways. The agreed period will, however, be relatively longer. The Company intends to benefit from the contract in terms of reduced costs since some costs will be shared, and increased efficiency and communication since the vendor will have adequate time to understand the market. As for accounting, the organization opted for unit price contracts where the vendor will be compensated an amount that matches the exact work done. As a result, the accounting firm will be contracted after specific periods of time when the Company wishes to determine its financial positions.

Selection Criteria for Vendors

The criteria for selecting vendors would differ depending on the business process in which the vendor is being invited. For accounting, the evaluation criteria would be on cost. The assumption is that all accountants are qualified by training and certification, and thus the price will be the separating factor between one accounting firm and another. The selection criteria for bottlers and distributors would be based on quality and safety. The Company deals with food products and therefore prioritizes business partners who can maintain high levels of hygiene and safety without compromising the quality. As a result, Tasty Cola will outsource individual vendors with specific expertise in each of the services it outsources.

Contract Awarding Process

26/3/2020: Formation of the procurement team.

Since the Company would be contracting out for the first time, it will involve a large team that would include managers and directors.

1/4/2020-5/4/2020: Development of tender and evaluation criteria.

The chosen team will agree on what the tender will involve, including supplier requirements such as quality assurance measures, tendering instructions, evaluation strategies, tender procurement process, and the questions to ask applicants.

6/4/2020-15/4/2020: Administration of pre-qualification questionnaires.

The process will help to examine potential vendors for suitability. The stage will open to anyone.

18/4/2020 – 31/5/2020: Issuance of tender.

All the potential vendors will be issued with an invitation. The process will involve answering selected questions along with a pricing matrix.

6/6/2020: Tender briefing meeting

7/6/2020-12/6/2020: Initial evaluation in terms of the highest to lowest bidders.

13/6/2020: Supplier shortlist.

14/6/2020-27/6/2020: Presentations, interviews, and visits. This will also be determined by the panel using the evaluation criteria set earlier.

28/6/2020: Selection.

1/7/2020-13/7/2020: Negotiations.

15/7/2020: Contract award.