Having a competitive advantage over its rivalry



This case is about Stoneyground Bakeries Ltd. Who deals in cakes and bread from its premises in Walton employing approximately 55 staff members? They sell their products to commercial customers and to the public directly through their small chain of shops.

The company is having a competitive advantage over its rivalry as it offers to the customer the good quality product and the premium price product and thus it enjoyed a good market image. But competition has recently appeared in the form of a major national bakery, Barrow mill PLC who are expanding their operation across the country. To deal with its competitor SBL has been forced to take cost cutting exercises including the purchase of cheaper ingredients and a comprehensive review of staffing.

This case has quoted many examples related to the discovery of injurious ingredients found in the products causing harm to the consumers. As case mentioned an example of consumer naming Cameron had almost choked on what appeared to be very small pieces of chopped string. When approached by Cameron lawyer SBL claimed that it was not string in the cake but a natural by product of the raw material which resulted from the milling process and was perfectly harmless.

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The local newspaper village pioneer has taken a keen interest in the rife rumors that are beginning to circulate about SBL like poor quality and job redundancies. Also examples of termination of contract between company and staff by the company where an employee naming Karen received a letter from Brain stating her to terminate the job without stating the genuine reason for which she claimed that the company is using her as a scapegoat towards her and have seized the opportunity to get rid of her in order to reduce staff numbers.

What does the Act aim to achieve?

To ensure that all food meets consumers.

Expectations in terms of nature, substance and quality and is not misleadingly presented;

To provide legal powers and specify offences in relation to public health and consumers. interest; and

To enable Great Britain to fulfill its part of the United Kingdom responsibilities in the European Union.

What is the scope of the Act?

The Act covers activities throughout the food distribution chain, from primary production through distribution to retail and catering.

The Act gives the Government powers to make regulations on matters of detail. The Food Standards Agency is the principal Government Department responsible for preparing specific regulations under the Act.


The principal aim of the regulation is to protect human health and consumer's interest in relation to food.

The main requirements are:

Food must not be injurious to health or unfit for human consumption.

The food businesses should be fully awarded about there supplier of ingredients or food processing animals and the business they have supplied with products and produces this information on demand.

There should be no misleading in labeling advertisements and in presentation of food.

Unsafe food must be withdrawn from sale or recalled from this consumer if it has already been sold.


Once a hazard is identified which might make food injurious to health, an assessment of the associated risk should be carried out, taking into the account, not all hazards that might be found in food are controlled by specific regulations. Food could be injurious to health without exceeding a particular legal limit. For example, this could apply when glass, which is not a specifically banned substance, is found to be present in food, or if, for example, a hazardous chemical not specifically identified by legislation on contaminants in food is found to be present. The key point is that once a hazard of any kind has been identified, the paramount need is to assess the risk.

When there are concerns that a particular food may be injurious to health, food businesses then have to consider how serious the risk is. Risk assessment in this context means addressing two key questions:

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What is the harm that might be caused?

How likely is it?

There is a range of reputable, expert organizations that are able to advise on particular cases, for example the Food Research Associations or firms carrying out public analyst work.


The following are the problems which were identified from the case:

Stoneyground bakeries limited are a company which was known for its quality and high standard products. It was en-cashing its good will in the market even if cheaper products' were available. But competition arousing because of upcoming national player in the industry has lead to all the malpractices followed by SBL. They have started using cheap quality products affecting there brand name and standard of bakery items which is even affected there sales to some extent.

SBL is also following the Layoff strategy just for the sake of cost cutting.

They have even terminated their year old employees just to keep them away from media and have increased work burden on existing employees.

Existing employees are working under the pressure of heavy work load as well as the fear of losing the job at any point of time.

They have misguided the Food Standards Act by not disclosing the important information pertaining to quality of food as well as mishandling the packaging part.

Cameron, who was a consumer for SBL, has also been faced by physical as well as mental and monetary damages because of the ingredients in the food material which was unhealthy and would have proved fatal for his survival.

They even misguided the lawyer by not revealing important information which would have made them liable for the act of mishandling and playing with the standards of food products prepared, as well as the damages caused to the couple because of the small piece of cake prepared by SBL.

Karen, one of the employees of SBL. She was working there for past many years and went on leave. When she came back, making her a part of management game and using her as scapegoat someone else's blame was charged on her and she was given early termination without any notice, with the basic idea of reducing cost as well as clearing the blame.


Taking into consideration the existing competition instead of following such acts of layoff and reducing the quality content of the food, they should try out with other possible actions like leveraging on their brand loyalty and present quality standards.

They can also try with accepting their fault and taking back the supplied food item which was having health hazardous substances in food material and making people trust on them by showing their concern about them.

If they want to follow the layoff policy instead of blaming them for anything they should follow a proper procedure and according to the effectiveness and efficiency of people with prior notice this strategy should be followed. So that they do not fall under any legal purview.

Even if they are asking any employee to leave they should give a proper and solid proof before charging any allegation.

They should even follow six sigma procedures to ensure the handling and packaging techniques are according to the standards and it will even add to its branding giving a positive impact to that.

They should follow employee beneficiary schemes to boost the morale of the employees who are under the pressure of layoff as well as increase work pressure due to these layoffs. This will prove to be a good sign and will give a good impact to their picture in media.

They should abide by the Food Regulation Act and work as if to get some certification in order to overcome the effects of negative publicity which happened in the market due to their present practices.


Identity the possible legal actions open to SBL. Identify the individual in the case who u feels may have the claim against SBL. Then write the list of possible legal action each party may have.

From the case it is clear that there are certain legal actions that can be taken against SBL by the many individual mentioned in the case….

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Following are the individual who can take the legal action


A 54 year old man had almost choked on what appeared to be very small pieces of chopped string, which had somehow been baked into the cake that his wife Madge had brought for him from Deirdre's Delicatessen in the local village.

Problem faced by him

Body felt ill as he has swallowed many small pieces of chopped string

Experienced distress from choking

Mental disorder.

Fear of being suffering from some serious problem.

Time which they spent in legal proceedings

Also had to incur cost of hiring a legal representative

Legal Action Open for Cameron-

The possible legal action open to Cameron is that he can ask for the compensation for which he can file a case against SBL in Consumer forum as it's a case of unhealthy food being provided by SBL

As clearly mentioned in the case that Cameron has suffered some problem in his throat for which he has incurred medical expenses which Cameron can demand from SBL for all those expenses incurred in his medical checkup.

As Cameron hired a lawyer to fight against SBL,, so Cameron has a legal right to ask for the charges which he has spent on hiring a legal representative.

He can also appeal to Quality check department regarding the cakes supplied are not safe to consume.

SBL workers

As we know workers are the assets of any organization specially a manufacturing firm where the performance of them matters a lot which in turn contributes to the product quality and thus create a positive image in the minds of consumers.

Problem faced by them:

Insecurity of job as their comprehensive review of staffing was going on.

Workers were getting low on their Morales.

Unhealthy environment among the staff members.

Workers were loosing strength which they were having before in a firm.

Workers were also unhappy about what they to be the inferior products now being sold by SBL.

Possible legal action:

If we talk on the par of workers there are not much legal actions available with them for which they can fight. As the company is not doing anything wrong with the employees till the time they are in job.

But the major problem for which they can fight is the demand for reassurance that there job will be not at stake until some very serious problem arise, accordingly the criteria can set so that they don't feel offended at the later stage. There should also be some MOU'S signed between SBL and workers so that there Morale may not go down till the time they work.

Apart from the legal action workers can demand for there same healthy environment which they were having before and can warn the company if this is going to be the scenario then the product quality can pass through serious deterioration.

Madge- Cameron's wife

Problem faced-

The problem faced by Madge is somehow same what Cameron has passed through. The only difference that Madge was in trauma for what he has experienced in his family where her husband felt ill, Also the inconvenience which she has faced in legal proceedings and the medical checkups of her husband.

The solution to the problem and the legal action which Madge is having are almost similar as she is also representing her family which we have already discussed in the above paragraphs.

Karen Crumble

She is one among the experienced worker at SBL where she had been working since 8 years, but currently she has passed through a big shock where her line manager Brain Baker has asked to leave the job blaming her for the incident which took place, which has harmed its of the consumer who consumed cake.

Problem faced by her was that she was held responsible for allegations for which even she has no role in the happening of that incident. She also realized the fact that company was using her as a scapegoat and was finding an opportunity to get rid of her.

Legal Action:

As we know that the allegation which were put on Karen are not true for which she even claimed her line manager to show the proof which was denied by the line manager thus she can file a case against SBL demanding for the proof and the possible genuine reason to leave the job.

She can also claim on the basis that at the time of incident she was not present at SBL as she was on holiday it was her junior worker who was operating the machines which resulted in the discovery of chopped string in the cake.

She can also file a case on the basis of time period of agreement where in she was asked to leave the job before its completion without stating the genuine reason for the same.

Brain Baker

He is the line manager of SBK; here in the case she has been responsible for giving the notice to Karen to leave the job without stating the proof for the reason.

As it's clear that Brain just can't do this with Karen doing so will ask her to mention the reason for the same and the only reason for which Brain baker can file a case against Karen where she misbehaved or behaved unacceptably towards him when confronted.


Taking each of the possible legal action listed in part 1 explains the legal rules governing each of them. You should appropriate legal references to support your arguments.


References Being Used -



From 1 January 2006, a number of new food hygiene regulations apply in the UK. The regulations that are most important for your business are:

Regulation (EC) No. 852/2004 on the hygiene of foodstuffs

The Food Hygiene (England) (No 2) Regulations 2005 (and equivalent regulations in Scotland, Wales and Northern Ireland) these replace the Food Safety (General Food Hygiene) Regulations 1995 and the Food Safety (Temperature Control) Regulations 1995.

They set out the basic hygiene requirements for all aspects of your business, from your premises and facilities to the personal hygiene of your staff. Almost all of the requirements in the new regulations are the same as the regulations they replace. The main new requirement is that you must be able to show what you do to make or sell food that is safe to eat and have this written down.


The Plastic Materials and Articles in Contact with Food (England) (No.2) Regulations 2006, set an overall migration limit for all food contact plastics. This limit is 10 milligrams per square decimeter of plastic surface area in general.

However, a limit of 60 milligrams per kilogram of food applies specifically in the case of containers or similar receptacles with a capacity between 0.5 and 10 liters, or which have a contact area that cannot be determined; and for sealing devices such as caps, gaskets and stoppers.

The regulations also establish:

'positive lists' of monomers, chemical compounds that can link together to form longer molecules with repeating structures (polymers);and starting substances permitted for use in the manufacture of food contact plastics

any time limits on their use

any specific migration limits

an incomplete list of additives approved by the European Food Safety Authority (EFSA) for use in food contact plastics

Finally, the regulations establish rules for testing migration from food contact plastics and for checking compliance with the regulations.


According to this act Stoneyground bakeries Limited has violated this act by reducing the standard of its food quality. In the purview of this act it is their duty to maintain all possible hygienic conditions even at the time of packaging but just in order to overcome the loss of certain amount they played with the health of people and food with mixed adulterant or mishandled food was given to leading to fatal effect for a consumer which would have even turned out to be more severe if not taken care at proper time. So they have violated this rule and even played with the life of consumer.


References Being Used -



The Food Standards Act 1999

The Act was introduced in the House of Commons on 10 June 1999 and received Royal Assent on 11 November 1999.

The main purpose of the Act is to establish the Food Standards Agency, provide it with functions and powers, and to transfer to it certain functions in relation to food safety and standards under other Acts. The Act gives effect to the proposals of the White Paper, 'The Food Standards Agency: A Force for Change' (Cm 3830).

It sets out the Agency's main objective of protecting public health in relation to food and the functions that it will assume in pursuit of that aim, and gives the Agency the powers necessary to enable it to act in the consumer's interest at any stage in the food production and supply chain. The Act provides for the Agency's main organizational and accountability arrangements. In addition, it provides powers to establish a scheme for the notification of the results of tests for food-borne diseases.


From 1 January 2005 food and feed businesses are required to withdraw food or feed from the market if products are not in compliance with the food or feed safety requirements of Regulation (EC) No 178/2002.

They should also notify the Agency and the local authority where the food business operator is based, or, in the case of imports, the relevant Port Health Authority.

Regulation (EC) No 178/2002 lays down the general principles and requirements of food law, establishes the European Food Safety Authority and lays down procedures in matters of food safety.

It was published on 1 February 2002. Articles 14 to 20 apply throughout the European Union from 1 January 2005.


Nevertheless, FDA has ample authority under the act's food safety provisions to regulate and ensure the safety of foods derived from new plant varieties, including plants developed by new techniques. This includes authority to require, where necessary, a premarket safety review by FDA prior to marketing of the food.

Under section 402(a)(1) of the act, a food is deemed adulterated and thus unlawful if it bears or contains an added poisonous or deleterious substance that may render the food injurious to health or a naturally occurring substance that is ordinarily injurious.

Section 402(a)(1) of the act imposes a legal duty on those who introduce food into the market place, including food derived from new crop varieties, to ensure that the food satisfies the applicable safety standard.

Foods that are adulterated under section 402(a)(1) of the act are subject to the full range of enforcement measures under the act, including seizure, injunction, and criminal prosecution of those who fail to meet their statutory duty.

FDA has relied almost exclusively on section 402(a)(1) of the act to ensure the safety of whole foods. Toxins that occur naturally in food and that render the food ordinarily injurious to health (such as poisons in certain mushrooms), and thus adulterated, rarely required FDA regulatory action because such cases are typically well known and carefully avoided by food producers.


According to this law if any company finds any adulterated or any health hazardous substance in the food material it is their duty to take that back. And if they fail to do so they can be seized, injected or even criminal prosecutions can be followed against them. SBL violated this regulatory Act and did not bother about the health of consumer. They reduced the quality standards of food. In order to reduce the cost involved in such activities they turned to cheap quality products leading to involving strains which are by product and can be harmful when consumed. So they are under the liability of this Act also which would have turned out to some legal prosecutions.


References Being Used -





Article 11 states that food imported into the European Union (EU) for placing on the market shall comply with the requirements of food law recognized by the EU, or if there is a specific agreement between the EU and the exporting country, those requirements.


Article 12 states that food exported (or re-exported) from the EU shall comply with the requirements of food law, unless the authorities of the importing country have requested otherwise, or it complies with the laws, regulations and other legal and administrative procedures of the importing country.

In the case of exporting or re-exporting food, provided the food is not injurious to health or unsafe, the competent authorities of the destination country must have expressly agreed for the food to be exported or re-exported, after having been fully informed as to why the food could not be placed on the market in the Community.

Where there is a bilateral agreement between the EU or one of its Member States and a third countries, food exported from the EU needs to comply with its provisions.


Article 14 states that food shall not be placed on the market if it is unsafe. Food is deemed to be unsafe if it is considered to be:

Injurious to health

Unfit for human consumption

The article also indicates what factors need to be taken into account when determining whether food is injurious to health or unfit.


Article 16 states that labeling, advertising and presentation, including the setting in which the food is displayed, of food shall not mislead consumers.


Article 18 requires food business operators to keep records of food, food substances and food-producing animals supplied to their business, and also other businesses to which their products have been supplied. In each case, the information shall be made available to competent authorities on demand.

Withdrawal, recall and notification

Article 19 requires food business operators to withdraw food which is not in compliance with food safety requirements, if it has left their control and to recall the food if has reached the consumer.

Withdrawal is when a food is removed from the market up to and including when it is sold to the consumer, recall is when customers are asked to return or destroy the product.

Food businesses must also notify the competent authorities (their local authority and the Food Standards Agency). Retailers and distributors must help with the withdrawal of unsafe food and pass on information necessary to trace it.

Where food business operators have placed a food on the market that is injurious to health, they must immediately notify the competent authorities. There are also similar provisions for animal feed.

Offences and penalties lay down by the general food regulation 2004

Regulation 4 creates criminal offences for breaches of Articles 12, 14(1), 16, 18(2) or (3) and 19 of the General Food Law Regulation (EC) 178/2002.

Regulation 5 lays down the penalties for the breaches of the articles listed above:

on conviction in a Crown Court, a fine or imprisonment for a term not exceeding two years or both

on conviction in a Magistrates' Court, a fine or imprisonment for a term not exceeding six months or both

The defenses under sections 20 and 21 of the Food Safety Act also apply to these regulations.


According to the Article 14, 16, 18 and 19 company falling under the regime of this Act should be very cautious and responsible for their activities and in case of any irresponsible act are liable to legal prosecutions. According to this act safety measures should be taken care of as food industry tends to be a very sensitive industry leading to life of the people.so safety measures should be taken into consideration and the products used in the manufacturing should also be traceable even if concerned with any animal or anything. And if not taken care of they can lead to legal actions.SBL has tress passed this regulation and was not good in traceability and safety measures for food industry pertaining to the health of the people.


Food hygiene legislation is closely related to the legislation on the general requirements and principles of food law.

The legislation lays down the food hygiene rules for all food businesses, applying effective and proportionate controls throughout the food chain, from primary production to sale or supply to the food consumer


Food hygiene legislation also works on this act specifying to keep proper control and check over the activities and flow of goods. They were also lacking in this part of regulation as due to mishandling and carelessness of an employee who was heavily drunk last night lead to happening of this unexpected event of mishandling food and even that food item was distributed in the market which adversely affected the health of a consumer affecting brand name and even to some extent sales of the company.


United Kingdom labour law involves the legal relationship between workers, employers and trade unions. Labour law is one of the oldest types of law, raising a host of problems whenever one person's work depends on the control of another. Modern labour law developed in the UK during the late nineteenth century, as workers engaged with their employers through the prism of contractual freedom, and trade unions were legitimised in law as economic partners.

The Employment Rights Act 1996 adds that in the event of dismissal, working people have a minimum level of job security, so every employer must give reasonable notice after one month of work, backed by a sufficiently fair reason after one year of work, and with a redundancy payment after two years. Further rights arise if a company is taken over, triggering the Transfer of Undertakings (Protection of Employment) Regulations 2006. These hold that when an employer changes, employees' terms cannot be reduced, even to the point of dismissal, without a good economic, technical or organisational reason.

Collective labour law concerns the central right of workers to participate in decisions about their enterprise. Gradual development in the UK economy has moved to a greater number of "John Lewis" style participatory institutions at work, incorporating European standards. In larger firms with over 50 staff, workers must be consulted and informed about major economic developments at their work, particularly about business difficulties, and works councils to communicate between workers and management are growing.

Job security

Under United Kingdom law, specifically section 95(1) of the Employment Rights Act 1996,[23] three events can constitute "Dismissal". These events are where:-

The employer terminates the employee's employment contract with or without notice;

a time-limited contract expires and is not renewed

The employer's conduct (e.g. where the employer fundamentally breaches the employee's employment contract) allows the employee to terminate the contract without notice. This is popularly known as "Constructive Dismissal".

Only those employees who have a year's continuity of service or who are dismissed for an automatically unfair reason may bring a claim for unfair dismissal


According to this law if any company employing people and falling under the purview of this act is liable to abide by this act and follow procedures given in this act. Any activity against this act can lead to legal prosecution against the employer. In this case SBL was following Layoff strategy so as it was not giving any notice and asking people to leave. In case of Karen also they have followed "constructive Dismissal" for which she can suit a case against them as she had years of continuity in the company. And she was asked to leave for an unfair reason.

This can again turn out to be a negative impact for SBL.


With regard to the corporate and individual personalities identified in the scenarios, taking all the circumstances into account , fully advice them of the single most appropriate course of action open to each of them and the likelihood of success. Justify the reason for your choice.


According to the Stoneyground Bakeries Limited considering the present conditions in which they have misleaded the legal representative and are not accepting their fault is leading to effect their brand name and may even increase the pace of their falling trend of sales. They would have opted to follow the regulation and opted to accept their mistake and take back all their distributed food items which would have pertained to certain amount of losses but would have given a positive impact to their falling good will in the market.

There are 80 percent chances that people would have taken it in positive way and considered them as concerned about the people and society and would have lead to increasing their sales and a positive strategy against its competitor.

So this can be a possible solution and would have even ensured following best quality practices which they have followed ever. Better technology and better ingredients would have overcome their small loss into huge profit.


Being a consumer he should be aware of all the legal practices followed for the safety and benefit of consumer. Because of the malpractice followed by SBL he has faced physical, mental as well as monetary losses. He should claim for all such losses. He should first collect all the possible proofs regarding lab test of the food material and everything and under the proper guidance of a legal practioner he would have suited a case against them claiming each and every loss i.e. physical loss due to choking in the throat, mental due to fear of death and her wife's problem, monetory expenses for legal representative as well as health concerned.time which he has lost due to following activities. So there are 95 percent chances he would have won and demanded huge compensation for that. And SBL would also have learned a lesson .


Karen is the employee of SBL. She was a part of the staff family for long time. Due to the present market Conditions Company was following layoff strategy and she turned out to be a victim of that. They have followed a unfair practice of dismissal of a permanent employee charging her for the deed for which she was not responsible and even at the time of termination she was not given prior notice nor proper explanations of her dismissal. She has the right to claim for compensation as well as for her unfair dismissal. There are 85 percent chances that she would have gained proper response and compensation for the same.


As a trouble shooting expert in business and law, advice SBL of both legal and practical measures they can undertake to ensure that the possibility of future incidences of the various types identified are minimized.

Local authorities are responsible for enforcing food hygiene laws. To do this, enforcement officers may visit your business premises to inspect them. These officers might come on a routine inspection, or they might visit because of a complaint. They have the right to enter and inspect your premises at any reasonable time and will usually come without telling you first.


These are some of the actions which are taken whenever officers feel to do so:

Collecting the samples of food

Record inspection

The problems can be written in a form of letter

serving a formal legal notice that sets out certain things you must do, or forbids you from using certain processes, premises or equipment

Recommending a prosecution in serious cases.

Food safety management procedures

You must put in place 'food safety management procedures 'based on the principles of HACCP (hazard analysis critical control point). You must also:

keeping this in place permanently

keeping your documents up to date and records relating to you procedures

review your procedure if you change what you produce or how you work

In practice, this means that you must have procedures in place to manage food safety 'hazards' in your business. This is similar to the previous legal requirements, but you must now write these procedures down, update them as needed and keep records that can be checked by your local authority. The regulations are designed to be flexible, so these procedures can be in proportion to the size of your business and the type of work you do. This means that many small businesses will be able to have very simple procedures and simple records.


The layout, design, construction, site and size of your premises must:

it must allow adequate maintenance, cleaning or disinfection

avoiding or minimizing air-bone contamination

carrying out all tasks hygienically provide enough working space


the ventilation should be either natural or mechanical but it should be enough

The ventilation system be constructed in a way so that it allows access to clean or replace filters and other parts.

Rooms where food is prepared,

Treated or processed

There are special requirements for rooms where you prepare, treat or process food. These do not include dining rooms. The design and layout of the room must allow good food

Hygiene practices, including protection against contamination between and during tasks.

Washing equipment and food

There must be adequate facilities like cleaning, disinfecting, and storing utensils and materials. These facilities need to be made of corrosion resistant material , easy to clean, and have an adequate supply of both hot and cold water.

You must have adequate facilities, where necessary, for washing food. Every sink (or other facilities) for washing food must have an adequate supply of hot and/or cold water. The water must be 'potable' (drinking quality). These facilities must be kept clean and, where necessary, disinfected.

Food waste

They should the removal of food waste and other rubbish from rooms where food is present as quickly as possible, to avoid them building up.

You must put food waste and other rubbish in containers that can be closed, unless you can satisfy your local authority that other types of containers or systems of disposing of waste are appropriate. These containers must be of appropriate construction, kept in sound condition, be easy to clean and, where necessary, to disinfect.

Personal hygiene

Every person working in a food-handling area must maintain a high level of personal cleanliness. He or she must wear suitable, clean clothing and, where necessary, protective clothing.

Wrapping and packaging

If you wrap or package foods as part of your business (including selling food to take away) then you must follow these requirements.

To look after that the material used for wrapping and packaging must not be the source of contamination.

Store wrapping materials so they are not exposed to a risk of contamination.

Make sure that that the containers are clean and are not damaged particularly if you use cans or glass jars.

Re-used wrapping material for foods must be easy to clean.


Lean Production Cost Reduction

Lean production method includes where in the labor productivity is doubled, cutting production throughput times by 90% and reducing inventories by 90%, cutting errors and scraps in half errors.

The Results:

Cost reduction was possible by raising labor productivity and eliminating waste.

Even greater returns when lean are extended to a build to order business model.

Overhead Cost Reduction

Standard products can be build to-order without forecasts or inventory and specials can be mass-customized on-demand.

The Results:

Inventory carrying cost can be eliminated.

Better responsiveness leads to more sales.

Procurement cost can be reduced with automatic, on demand resupply.

Standardization Cost Reduction

Standard part lists can be 50 times less than proliferated lists; see Standardization Results

Standard parts are easier to get and fewer types need to be purchased

The result

Larger purchase lead to economies of scale

Material overhead of the standard parts can be one tenth of proliferated lists

Supply Chain Management Cost Reduction

The result

For standard parts and materials the material overhead can be reduced by a factor of 10

Automatic resupply eliminates forecasts, purchase orders, inventory and expediting costs.

High quantities of standard parts are the result of purchasing leverage.