SITXMGT002 ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS

Assessment – 2 – Project
PART A

Your Tasks

Select 3 suppliers of goods and services relevant to your area of work (e.g. Food and
Beverage, Cookery, Events, Tourism, Administration or similar) who currently supply
your organisation (for example meat, fruit and vegetables, stationery, cleaning services,
laundry services, beverages, insurance etc.)

1. List the suppliers you have selected and describe the products or services they currently
provide you with

Supplier 1: Haverick meats

Products or services provided: Meat, Pre-cooked meat , lamb ribs , steak , chicken

Supplier 2: Ponti Exotic Fruit & Vegetables Wholesale

Products or services provided: Onions, carrot, cucumber and all the vegetables

Supplier 3: Bobs Bakery shop

Products or services provided: Items related to the bakery like bread, burger buns.

2. List the key performance indicators/specifications that are required for the supply of each
product or service from each supplier.
Haverick meats
 The supplies we get from this supplier are:
1. 5kg of chicken breast
2. 3 packets of rump steak which of 300 g each
3. Lamb ribs total of 5 kg 2 packets
4. Chicken thigh 5 kg
5. Pork belly
Ponti Exotic Fruit & Vegetables Wholesale
 The supplies we get from this supplier are:
1. Whole box of carrot
2. 2 packets of cucumber and 3 kg of onions and spring onion
3. Stuffs like capsicum, mango, corn

Bobs Bakery shop

 The supplies we get from this supplier are;
1. 30 burger buns

3 Research alternative suppliers for each supplier you have listed in Question 1 and
obtain an alternative quote for each supplier you currently use, based on the key
performance indicators/specifications you have identified in Question 2.
Alternative suppliers I have researched so that if one is closed then I can go for
another option are;
 For the meat, Tanta meats. According to Tanta meats, I went to its website and found
out that it has got decent review. We can get quality product in a cheap price and we
can get healthy farming food. Even the delivery is in less time like 3 days.

Following that I have found Simon George & sons vegetables market from where I
can get vegetable. Simon George & Sons is the premier produce wholesaler in
Australia, consistently offering the highest quality produce on the market and it’s easy
to order vegetables because we can download the app of the store and order easily.

Next, for the bread I have found Harrys bread but there nothing problem with the
bread service provided by this and the first supplier bobs bakery. Service time is
similar, and the quality provided by them are also similar.

4. Once you have received the 3 quotes, compare these with the existing supplier
provisions and attach a summary which outlines the advantages and
disadvantages for:

 Quality
 Prices
 Payment conditions
 Service provisions
 Reliability
 Specific needs of your organisations (quantities, $ terms, purchasing power etc.)
Haverick meat Tanta meats Ponti Exotic Simon Bobs Harrys
Fruit & George & bakery bakery
Vegetables sons’
Wholesale vegetables

Price Price is decent Price is good but Price for Price for It is cheaper It is
from this supplier not compared to vegetables is the than the expensive
like 5kg of chicken Haverick meat 2 dollar less vegetables supplier 2 than the
costs 44 bucks . like it costs 47 than supplier is 2 dollar by 50 cents supplier 1
Similarly, when it bucks for the 5 kg 2 . Its costs more than by 50
comes to other like of chicken total of 40 the supplier cents
steak , lamb its dollar for 1
cheaper vegetables .
Payment Payment condition For this we have We have to We have to We have to We have
conditions for this supplier is to pay fortnight pay weekly pay this pay cash on to pay cash
weekly to this supplier the same on the
supplier weekly by day when same day
through bank cash we order when we
bread order
bread

Service Service provided Service provided Delivers the Delivers in Takes 5 hrs Takes 7
provisions by this supplier is by this supplier is goods in 1 1 day to make the hrs to
good like it also good, but it day order for make the
delivers the good delivers the good them order for
within 1 day within 1.5 day them

Reliabilit Its trustworthy to It’s also trust Trust worthy Trust Trust Trust
y get meats from this worthy to get to get worthy to worthy worthy
supplier meats from this vegetables get
suppliers vegetables

Specific
needs
Quality Quality of the Same goes for Quality is Quality of Quality of Quality of
meats are fresh and this supplier its decent the bread is not bread is
good fresh and good vegetables that good, good, and
are good and bread is the size is
here as well small in little big
size compare to
supplier 1
 5. Based on your comparison, write a recommendation for whether one or
several new supplier(s) should be considered to replace any of the existing
ones. Which aspects will need to be negotiated specifically where one or
several new suppliers are considered or re-negotiated where existing suppliers
are preferred?
Answer. According to my comparison, I would recommend to get orders from
supplier 1 however it maybe not be good to get bread from supplier 1 cause its
small but we can negotiate and increase the price but the breads should be good or
else we can find another replacement for the bread. Similarly, rest of the goods
like chicken and vegetables are good from the supplier 1 as compare to supplier 2
and is trustworthy to get goods from the suppliers. However, we can negotiate on
chicken if possible but still price is good enough for us.

6. How are the relationships with existing suppliers managed in your

organisation? What does this entail in terms of communication, monitoring
and provisions to overcome supply or service issues? What are your
recommendations based on existing provisions in place (or where these do not
or only partially exist)?
Answer. Suppliers are our partners and this partnership should be based not only on
financial transactions, but also on mutual trust and loyalty. Make our suppliers feel
like they are a part of our business. Inform them about our processes, such as release
of new products and promotion and listen to their concerns. I don’t want to lose my
suppliers; I can do that by paying them on time so that I can prove that I am reliable
customer and easy to work with. If I can’t make payment on a date agreed, then I will
inform the suppliers as soon as possible with the date on which then can expect the
payment

7. Where actual negotiation will take place as a result of the aspects you have
identified in Question 5, you will be observed conducting these negotiations
for Part B of this assessment project.

Or

Where your organisation’s policies and procedures prevent you from negotiating or re-
negotiating, you will be observed conducting negotiations in a simulated environment in
Part B of this assessment project, based on the factors you have identified in Question 5.

Actual negotiation will take place at Brisbane

Part B – Conducting Negotiations
You will be observed conducting negations with existing or potential new suppliers as
identified in Question 5 of Part A of this assessment. The suppliers may be actual, where
organisational policies and procedures permit, or simulated, with colleagues or students
as agreed to with your trainer. You are required to record all details discussed during
the negotiation talks and use these as the basis to draw up a contract for each supplier
in Part C of this assessment.
Provide the following details for at least 2 different negotiations (Negotiation 1 and 2)
you will undertake:
Negotiation 1

Real Negotiation Simulated Negotiation √

Supplier details Fruits & Vegetables from Australia

represented by: Mandy

Location Brisbane
Date 27th March 2019
Nature of negotiation Pricing and quality

Details We are negotiating 8% off the total of the invoice for punctual payment.
The supplier commits to deliver high quality and more freshness in his
products.
Negotiation 2

Real Negotiation Simulated Negotiation √

Supplier details The Meating

represented by: Mandy

Location Brisbane
Date 27th March 2019
Nature of negotiation Pricing

Details We are negotiating 5% off from the monthly invoice after purchases up
to 80 kg a month.
Part C – Making formal agreements

1. Present the outcomes from each negotiation to your supervisor/manager or trainer and
discuss the viability of each term negotiated according to your notes. Enter the outcomes
for each contractual detail you have negotiated in the table below and indicate the
changes required (if any) and/or the approval to proceed with the agreements.
2.

Approved Not Recommended Change

Supplier 1
Approved
Contractual detail 1: Pricing Yes

Contractual detail 2: Quality Yes

Supervisor Name: Mandy

Supervisor Signature: Mandy
Date: 27th March 2019

Approved Not Recommended Change

Supplier 2
Approved
Contractual detail 1: Pricing Yes

Supervisor Name: Mandy

Supervisor Signature: Mandy
Date: 27th March 2019

3. Based on the feedback from your supervisor or trainer, contact the supplier and negotiate
the final changes if required. Record the negotiated changes in the table and obtain final
approval from your supervisor or trainer.
Supplier 1 Outcome approve not
d approved
Details negotiated
Yes
8% Discount and 30
Discount & Payment date days to pay

Quality & Freshness The supplier commits Yes

to deliver high quality
 and fresh vegetables

Supplier 2 Outcome
Details negotiated
Discount & Payment date 5% Discount and 15 Yes
days to pay

4. Contact each supplier by email and confirm the agreements made. Advise each party that
you will finalise the formal agreements for signing of all parties.
a. Fruits & Vegetables from Australia
Dear supplier,

According with the negotiation I am sending the agreement regarding the following points
1. Discount of 8%
2. Payment day due to 30 days after delivery
3. Vegetables fresh

Thanks
Mandy

b. The Meating

Dear supplier,

According with the negotiation I am sending the agreement regarding the following points
1. Discount of 5%
2. Payment day due to 15 days after delivery

Thanks
Mandy

5. Draw up the contract agreements based on your final negotiated outcomes. Each contract
must contain the following details:

You are encouraged to identify legal requirements based on your own research or legal
advice. The following websites provide basic information thereto:
https://www.smallbusiness.wa.gov.au/business-topics/money-tax-and-legal/legal-
matters/business-contracts/#verbal

https://www.business.qld.gov.au/business/starting/starting-a-business/working-business-
advisers/types-business-advisers

 Names of contracting parties including trading names and ABN/ACN, as well as their
contact details

 supply conditions, including volume, price, discounts, ordering periods, take or pay
and delivery times
 payment terms
  specifications of goods or services supplied (scope of goods)
 warranty periods for defective goods or services
 limited liability (risk of loss or damage)
 intellectual property
 confidentiality
 insurance
 dispute resolution
 termination and exclusion clauses
 signature provisions

Contract agreement with each supplier

Fruits & Vegetables from Australia (ABN: 256 365 789), Ph: 07 236 285 7894

Supply conditions
 Discount of 8%
 Payment day due to 30 days after delivery
 Vegetables fresh

Payment Terms
8% off the total of the invoice for punctual payment by credit card or debit card or direct
deposit

Specifications of goods or services supplied (scope of goods)

 Coss Lettuce
 Spinach
 Mix Salad

Warranty periods for defective goods or services

Vegetables must look at least 70% of freshness within 48 hours.

Limited liability (risk of loss or damage)

The product liability risk related to fruit and vegetable marketing is that of customer liability
associated with injuries caused by harmful products such as contaminated fresh produce. An
event associated with product liability risk may have a very low probability of occurrence but
may result in a large economic loss

Intellectual property
Trademarks and copyright of Fruits & Vegetables from Australia Trademark attained with the
help of IP Australia act.

Confidentiality
The Privacy Act 1988 (Privacy Act) is an Australian law which regulates the handling of
personal information about individuals. Contact information of clients won’t be shared or
discussed with third party.

Insurance
Insurance agencies can assist businesses with compulsory and optional insurance needs.
Insurance cover you can tailor to suit your fruit or vegetable growing farm. Fruits &
Vegetables from Australia ‘s farm cover insurance allows you to tailor an insurance plan to
suit your horticultural operations

Dispute resolution
Dispute resolution under the Horticulture Code procedure involves the following steps:
 The complainant must inform the other party in writing of the dispute and state:
 what the dispute is about
 the action they think will resolve the dispute
 their desired outcome.
 The parties must then try to resolve the dispute.
 If the parties cannot resolve the dispute within three weeks after the complainant
informs the other party of the dispute, either party may ask the mediation adviser to
appoint a mediator.
 Once a mediator is appointed, the mediator can decide how, where and when they will
carry out the mediation.
 Once a matter has been set down for mediation, both parties must attend the
mediation and try to resolve the dispute

Termination and exclusion clauses

Broadly, The Unfair Contract Terms Act 1977 ("UCTA") does not cover insurance contracts;
contracts relating to the creation, transfer or termination of intellectual property rights;
contracts relating to the formation, dissolution or constitution of a company or to the rights or
obligations of its members; contracts relating to the creation or transfer of securities or rights
in securities; contracts relating to the creation, transfer or termination of an interest in land;
certain marine/shipping contracts; or employment contracts. There are, however, certain
savings for consumers under marine/shipping contracts, and for employees under
employment contracts.

Supplier 2: The Meating (ABN: 256 365 789), Ph: 07 236 285 7894

Supply conditions
 Discount of 5%
 Payment day due to 15 days after delivery
 Temperature: Rate from 1 to 5 according with the state and temperature of the
meat following procedures of food safety, max within 3 C and 5 C.
 Delivery Time: Rate from 1 to 5 the delivery time spent, max within 24 hours.
 Price: Rate from 1 to 5 the price according with the quality of the meat, Chicken
8$ per kg, Pork 13$ per Kg and fish 11$ per kg.

Payment Terms
 5% off the total of the invoice for punctual payment by credit card or debit card or
direct deposit. Payment day due to 15 days after delivery

Specifications of goods or services supplied (scope of goods)

 Coss Lettuce
  Spinach
 Mix Salad

Warranty periods for defective goods or services

Vegetables must look at least 70% of freshness within 48 hours.

Limited liability (risk of loss or damage)

The product liability risk related to fruit and vegetable marketing is that of customer liability
associated with injuries caused by harmful products such as contaminated fresh produce. An
event associated with product liability risk may have a very low probability of occurrence but
may result in a large economic loss

Intellectual property
Trademarks and copyright of Fruits & Vegetables from Australia Trademark attained with the
help of IP Australia act.

Confidentiality
The Privacy Act 1988 (Privacy Act) is an Australian law which regulates the handling of
personal information about individuals. Contact information of clients won’t be shared or
discussed with third party.

Insurance
Insurance agencies can assist businesses with compulsory and optional insurance needs.
Insurance cover you can tailor to suit your fruit or vegetable growing farm. The Meating ‘s
farm cover insurance allows you to tailor an insurance plan to suit your horticultural
operations

Dispute resolution
Dispute resolution under the Horticulture Code procedure involves the following steps:
 The complainant must inform the other party in writing of the dispute and state:
 what the dispute is about
 the action they think will resolve the dispute
 their desired outcome.
 The parties must then try to resolve the dispute.
 If the parties cannot resolve the dispute within three weeks after the complainant
informs the other party of the dispute, either party may ask the mediation adviser to
appoint a mediator.
 Once a mediator is appointed, the mediator can decide how, where and when they will
carry out the mediation.
 Once a matter has been set down for mediation, both parties must attend the
mediation and try to resolve the dispute

Termination and exclusion clauses

Broadly, UCTA does not cover insurance contracts; contracts relating to the creation, transfer
or termination of intellectual property rights; contracts relating to the formation, dissolution
or constitution of a company or to the rights or obligations of its members; contracts relating
to the creation or transfer of securities or rights in securities; contracts relating to the creation,
transfer or termination of an interest in land; certain marine/shipping contracts; or
employment contracts. There are, however, certain savings for consumers under
marine/shipping contracts, and for employees under employment contracts.

6. Present your final contracts to your supervisor and trainer for final approval