Executive Summary 2
Issues Identification 2
Environmental and Root Cause Analysis 3
Alternatives and Options 4
Alternative 1 4
Alternative 2 4
Monitor and Control 7
Appendix 1 – Total Cost Analysis 9
Appendix 2 – Weighted Evaluation 10
Platinum Box Ltd. Is a small design house and printing operation that is well known for their superior graphic designs in the competitive printing industry. They have announced that they are looking to expand their market into the United States, and in order to do so they need to purchase five new presses to meet the goals of expanded production.
Jared John, the ...view middle of the document...
Environmental and Root Cause Analysis
Platinum has a history of relying on Jabaking as a key supplier for their company, especially since Jim Hicza is a longtime friend of Platinum’s founder and president, Conrad Thompson. When Platinum was not successful in the first attempt of their mission to be one of the top ten fold down box manufacturers in 1992, they relied on that relationship in order to get a head start in the industry. The purchase of the presses from Jabaking was done partially as a favor, meaning the motive was for personal reasons, not business reasons. This favor puts Platinum in an awkward position as Conrad expects Jim to remember Jabaking for business transactions in the future. From a business perspective, being dependent on Jabaking due to personal issues is not necessary the best decision, especially since Jabaking has a reputation for having good but not the highest quality products.
In order for Platinum to succeed in their newest mission to expand their market to the United States, they need to ensure they have the current technology that is capable of producing the required high quality products. To successfully do this they need to explore different options and see what products are available, which requires sourcing from multiple suppliers. They need to have a product that can meet the quality and production capabilities at the lowest total cost. If they decide to single source to Jabaking, they are limiting themselves to other options that could be more affordable and profitable in the long run. This may also affect future business opportunities with other companies because they are recognized as being dependent on one supplier.
Alternatives and Options
Engage in multiple sourcing to obtain presses that can meet their needs. The supplier should meet the requirements of total cost, quality, and production capability.
• Keeps suppliers competitive and enables them to provide better value
• Minimizes the risk of supplier failure
• Avoids buyer dependence on Jabaking
• Allows Platinum to assess the market price and conditions of supply
• Provides an opportunity to “test” potential suppliers
• Could have a negative effect on their existing relationship with Jabaking
• There is a higher risk since the other suppliers have never worked with Platinum before
• Relationships with new suppliers must be highly maintained
Continue to single source the presses with Jabaking.
• Continue to build a relationship with Jabaking
• Single sourcing reduces internal procurement costs
• Risk is reduced as Platinum has experience working with Jabaking
• Other suppliers may lost interest in competing for business
• Makes it difficult to ensure competitiveness
• Platinum may become dependent on Jabaking
After conducting a weighted evaluation and total cost analysis, I would recommend going with Alternative 1...