Case Study on TRU Hardware Centres and Camping Today

Introduction to TRU Hardware Centres

Case Study Refers To All Questions
Tools R Us (TRU Hardware Centres) is a UK BASED Regional Warehouse style Hardware store (Catering for all domestic DIY and many common small and medium sized building projects). The company includes three centres in Kent, four centres in Sussex and four centres in Essex, each based on the outskirts of a large town. They are large centres, usually busy places with good sales throughout the year but make most of their profit leading up to and including the bank holiday periods such as Summer bank holidays, Christmas, and Easter Holidays, (they are often seen as the place to go to get any items needed for home repairs, DIY and decorations, as well as supplying most builders with their equipment and material needs).

TRU’s sell hand tools and electrical power tools amongst other small items), they sell timber (internal and external) and many other materials such as plastics adhesives fixings bricks cementitious materials. They also sell gardening equipment, a large variety of gardening plants and tools, TRU’s also sell a varying range of seasonal goods such as Christmas lights, decorations and trees at Christmas, and for the Summer season they sell grills/barbeques and the like.

TRU’s are proud of their Unique selling points, and their heritage and support for local (regional) enterprises. The core of the organisation is a family run business, but they also employ 1350 staff including some seasonally temporary staff. Their motto is “Get it done and have fun!”.

Camping Today (CT-UK) is a renowned UK based multinational wholesale supplier of affordable camping equipment, their sales manager Trisha Sales, has noticed TRU’s and has approached them with a proposition to supply camping equipment (seasonally from mid spring until early summer). The TRU senior management team agree that this might be a good opportunity and that a new strategic direction would be advantageous to pursue. In essence TRU management believes that they should enhance some of their summer season range and that this opportunity could help increase turnover. TRU management also know that in general their customers are very happy with the quality and price of the products that TRU sell and that their customers tend to return frequently over the course of a year (on average seven times a year).

Independently to CT-UK’s proposal, TRU Purchase Analysis Department (TRUPAD) have identified some other potential seasonal summer special goods that may be considered to increase revenue.

TRU's Seasonal Goods

These include three categories:
Outdoor family fun sport equipment (garden games, toys, racket games, cricket etc).
Swimming pools (all equipment for a variety of folding summer swimming pools).
Limited Range of cycles and cycling associated paraphernalia (enough to equip a family of four with a reasonable hybrid or mountain bike).

TRU had not previously considered camping equipment, but the management team all agree to add camping equipment to the list of potential ranges to be sold.

As a company TRU has no previous experience in sourcing or selling any of the above-mentioned ranges of goods and the current supplier base does not have potential to provide the items required.
There are no local suppliers who supply the above goods. TRU will need to look to National and International suppliers.

Brian Reynolds (Buyer) has worked at TRU in the purchasing and supply department for seven years and will now manage all aspects of the introduction of the new seasonal lines.

Although very experienced in many aspects of purchasing to stock the TRU Hardware centres, Brian has not previously dealt with Multinational Businesses as he specialised in scouting local suppliers for their goods building strong relationships and building on trust. He can be a little scatty and disorganised but is renowned as being friendly, honourable and “always comes through in the end”. Brian has been set several objectives by the Supply Chain Director (Head of TRUPAD) with the overall aim of managing the appointment of suppliers to fulfil the plan for summer special goods.

These objectives are:

Propose processes for the selection of suppliers.
Develop supplier selection criteria.
Identify any risks that TRU should consider after the new supplier is engaged.
Achieve a viable level of sales.
Achieve a net profit margin of 5% within two years.

Brian understands the current sourcing processes used by TRU but realises that the requirements for dealing with the suppliers of the proposed ranges will need to be approached differently. 

Brian decides to focus on the range of camping equipment first and identifies two other potential  suppliers from some basic internet-based research. The three suppliers are:
Supplier 1 is CT-UK a UK market leader in Camping equipment and sells very highquality equipment, already supplying to most outlets. It has a very solid reputation internationally financial basis; a strong brand CT also supplies directly on-line (from their own website).

Supplier 2 All Camping (AC) based in South-East Asia and is well established in Australia and New Zealand as a supplier of camping equipment but has not done any business with European companies previously. Initial contact indicates that it is very price competitive.

Supplier 3 Camping USA (C-USA) Is the global brand leader can be found in virtually all general camping outlets in Europe, based in US, their source their equipment internationally, some of their products are reasonably good quality ranges but there are also budget ranges which tend to be “disposable” (one use equipment), for the very large festival camping market. 

As a pilot exercise (to prove the processes when sourcing the other product ranges) Brian decides to invite all three firms to submit tenders and sends them an Invitation to Tender that requires details of:
Proposal for a first season range of camping equipment to sell (Brian details the floor space that will be available from all TRU sites).
Policy documents on quality.
Three years financial records.
References (specifically from renowned firms that they have dealt with in the past).

After considering the information that was received, Tony finds it difficult to interpret the different responses from the potential suppliers as there is no standard format adopted by them. So unfortunately, a decision on which supplier to use cannot be made easily.