Bean-To-Bar Service Oriented Component Systems Project

Running head: Service Oriented Component Systems Project

Case Study: Bean-to-Bar Service Oriented Component Systems Project

Antionette Lyles

Assignment 1

Case Background

Bean-to-Bar is a manufacturer of a specialty line of chocolate products. Its headquarters is located in Arlington VA, with 13 manufacturing and warehouse facilities in located in Atlanta, Chicago, Cincinnati, Dallas, Denver, Detroit, Green Bay, Kansas City, Memphis, Orlando, and San Francisco. Bean-to–Bar employs 1,300 people in Arlington and 500 at its regional locations (donald, 1994).

Bean-to-Bar decided to revamp its order entry system several years ago at the initiative of its Sales and Marketing department. The Sales and Marketing’s IT department created and manages Bean-to-Bar’s Web server, which supports advertising and marketing content, as well as the catalog and direct order entry system. Over a period of six months, the sales department noticed an increase in online retailers in their on-line ordering system (donald, 1994).

As a result the Director of Bean-to-Bar approved a new initiative to create a more interactive presence with its customers. The new project, named Service Oriented Component System (SOCS), was to create a new customer billing system and was intended to provide interactive customer access order tracking and online electronic payment authorization based on adding new integration layers to an existing system layer based on service components. The SOCS system was to include new bill printing/mailing hardware subsystems installed at three locations and new desktop workstations for the Accounts Receivable department. In addition, interfaces were required for the recently developed order entry system and the legacy warehouse/shipping system. The IT department and managers understood that the current distribution environment was lacking state-of-the-art hardware and software and that major upgrades might be required. (donald, 1994).

Procurement Planning

During the scope definition phase of the project the team began determining what to procure, how to procure, how much could be spent, and when to begin procurement. The team performed a make or buy analysis based on the project’s requirements to help with procurement planning (2004).

The results of the analysis led the team to procured the following products (donald, 1994):

• Workstations for 22 accounts receivable clerks
• Bill printing/mailing system to replace system in Arlington
• Account receivable, payment, and billing business system that supports revised security and compliance accounts receivable business process
• Training for new accounts receivable, customer billing and payment systems.
• Enhancements to Web-based customer order system to provide additional visibility into customer account  status through voice, video, and data interfaces

Plan Contracting

The purchasing personnel felt that the best way to procure these products was through a contract with the exception of the purchase of the workstations. Bean-to-Bar had an existing relationship with Dell and decided to purchase the 22 workstations from them. This process is known as sole sourcing in the Federal Government and is not permitted unless the vendor meets certain criteria such as being a Hub Zone or 8a Certified (2006). As for the system development and revamping, the team wanted a contract that would place the maximum performance risk on the vendor(s) while maintaining incentive for economical and efficient performance (donald, 1994).

Out of the three categories of contracts, the purchasing personnel decided to seek out a fixed –price-incentive (FPI) contract. In the Federal Government, the contract type or vehicle is predetermined by the Acquisitions Office and is effective throughout the Department or Agency (2006).   Bean-to Bar decided they wanted a contract that would pay the contractor of choice for actual allowable costs incurred, not exceeding their ceiling price, while still allowing them to earn more or less a profit depending on their ability to meet the defined performance criteria. Even though this type of contract involves some initial risk sharing, generally the contractor would be taking more of a risk than Bean-to-Bar (richard, 1991).

Requests Vendor Responses

The purchasing personnel began to prepare the documents needed to solicit proposals from contract vendors. In the Federal Government, a Procurement Initiation Notice (PIN) Package would be prepared and submitted to the Acquisitions office for approval (2006). Working from their own documented resources, qualified seller lists provided by consultants, and a supplier catalog, Bean-to-Bar’s contracting specialists held a bidding conference as well as placed the request on a reputable contract bidding site to solicit vendor responses (richard, 1991).