Power Point presentation
Make a PowerPoint presentation (10 slides) with speaking notes included, on the case study that is attached.
Case
Study:
Sheila Austin
,
a buyer at A
utolink, a Detroit
–
based producer of subassemblies for the
automotive market, has sent out requests for quotations for a wiring harness to four
prospective suppliers. Only two of the four suppliers indicated an interest in quoting the
business:
Original
Wi
re (Auburn Hills, Michigan) and Happy Lucky Assemblies (HLA) of
Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a
month. Both suppliers will incur some costs to retool for this particular harness. The
harnesses will be prep
ackaged in 24 × 12 × 6
–
inch cartons. Each packaged unit weighs
approximately 10 pounds.
1. Quote
The first quote received is from Original Wire. Auburn Hills is about 20 miles from
Autolink’s corporate headquarters, so the quote was delivered in person. Wh
en Sheila
went down to the lobby, she was greeted by the sales agent and an engineering
representative. After the quote was handed over, the sales agent noted that engineering
representative would be happy to work closely with Autolink in developing the un
it and
would also be interested in future business that might involve finding ways to reduce
costs. The sales agent also noted that they were hungry for business, as they were
losing a lot of customers to companies from China. The quote included unit price
,
tooling, and packaging. The quoted unit price does not include shipping costs. Original
Wire requires no special warehousing of inventory, and daily deliveries from its
manufacturing site directly to Autolink’s assembly operations are possible.
Original
Wire Quote:
Unit price=$30
Packing costs=$0.75 per unit
Tooling=$6,000 one
–
time fixed charge
Freight cost=$5.20 per hundred pounds
2. Quote
The second quote received is from HLA of Guangdong Province, China. The supplier
must pack the harnesses in a container and ship via inland transportation to the port of
Shanghai in China, have the shipment transferred to a container ship, ship material to
Seattle, and then have material transported inland to Detroit. The quoted unit price does
not include international shipping costs, which the buyer will assume.
HLA Quote:
Unit price=$19.50
Shipping lead time=Eight weeks
Tooling=$3,000
In addition to the
supplier’s quote, Sheila must consider additional costs and information
before preparing a comparison of the Chinese supplier’s quotation:
Each monthly shipment requires three 40-foot containers.
Packing costs for containerization=$2 per unit.
Cost of inland transportation to port of export=$200 per container.
Freight forwarder’s fee=$100 per shipment (letter of credit, documentation, etc.).
Cost of ocean transport=$4,000 per container. This has risen significantly in recent years due to a shortage of ocean freight capacity.
Marine insurance=$0.50 per $100 of shipment.
U.S. port handling charges=$1,200 per container. This fee has also risen considerably this year, due to increased security. Ports have also been complaining that the charges may increase in the future.
Customs duty=5% of unit cost.
Customs broker fees per shipment=$300.
Transportation from Seattle to Detroit=$18.60 per hundred pounds.
Need to warehouse at least four weeks of inventory in Detroit at a warehousing cost of $1.00 per cubic foot per month, to compensate for lead-time uncertainty.
Sheila must also figure the costs associated with committing corporate capital for holding inventory. She has spoken to some accountants, who typically use a corporate cost of capital rate of 15 percent.
Brokerage fees for hedging currency=$400 per shipment
Additional administrative time due to international shipping=4 x hours per shipment x $25 x per hour (estimated)
At least two five-day visits per year to travel to China to meet with supplier and provide updates on performance and shipping=$20,000 per year (estimated)
The international sourcing costs must be absorbed by Sheila, as the supplier does not assume any of the additional estimated costs and invoice Sheila later or build the costs into a revised unit price. Sheila feels that the U.S. supplier is probably less expensive, even though it quoted a higher price. Sheila also knows that this is a standard technology that is unlikely to change during the next three years but which could be a contract that extends multiple years out. There is also a lot of “hall talk” among the engineers on her floor about next-generation automotive electronics, which will completely eliminate the need for wire harnesses, which will be replaced by electronic components that are smaller, lighter, and more reliable. She is unsure about how to calculate the total costs for each option, and she is even more unsure about how to factor these other variables into the decision.
Case Study:
Sheila Austin, a buyer at A
utolink, a Detroit
–
based producer of subassemblies for the
automotive market, has sent out requests for quotations for a wiring harness to four
prospective suppliers. Only two of the four suppliers indicated an interest in quoting the
business: Original Wi
re (Auburn Hills, Michigan) and Happy Lucky Assemblies (HLA) of
Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a
month. Both suppliers will incur some costs to retool for this particular harness. The
harnesses will be prep
ackaged in 24 × 12 × 6
–
inch cartons. Each packaged unit weighs
approximately 10 pounds.
1. Quote
The first quote received is from Original Wire. Auburn Hills is about 20 miles from
Autolink’s corporate headquarters, so the quote was delivered in person. Wh
en Sheila
went down to the lobby, she was greeted by the sales agent and an engineering
representative. After the quote was handed over, the sales agent noted that engineering
representative would be happy to work closely with Autolink in developing the un
it and
would also be interested in future business that might involve finding ways to reduce
costs. The sales agent also noted that they were hungry for business, as they were
losing a lot of customers to companies from China. The quote included unit price
,
tooling, and packaging. The quoted unit price does not include shipping costs. Original
Wire requires no special warehousing of inventory, and daily deliveries from its
manufacturing site directly to Autolink’s assembly operations are possible.
Original
Wire Quote:
Unit price=$30
Packing costs=$0.75 per unit
Tooling=$6,000 one
–
time fixed charge
Freight cost=$5.20 per hundred pounds
2. Quote
The second quote received is from HLA of Guangdong Province, China. The supplier
must pack the harnesses in a container and ship via inland transportation to the port of
Shanghai in China, have the shipment transferred to a container ship, ship material to
Seattle, and then have material transported inland to Detroit. The quoted unit price does
not include international shipping costs, which the buyer will assume.
HLA Quote:
Unit price=$19.50
Shipping lead time=Eight weeks
Tooling=$3,000
In addition to the
supplier’s quote, Sheila must consider additional costs and information
before preparing a comparison of the Chinese supplier’s quotation:
Case Study:
Sheila Austin, a buyer at Autolink, a Detroit-based producer of subassemblies for the
automotive market, has sent out requests for quotations for a wiring harness to four
prospective suppliers. Only two of the four suppliers indicated an interest in quoting the
business: Original Wire (Auburn Hills, Michigan) and Happy Lucky Assemblies (HLA) of
Guangdong Province, China. The estimated demand for the harnesses is 5,000 units a
month. Both suppliers will incur some costs to retool for this particular harness. The
harnesses will be prepackaged in 24 × 12 × 6-inch cartons. Each packaged unit weighs
approximately 10 pounds.
1. Quote
The first quote received is from Original Wire. Auburn Hills is about 20 miles from
Autolink’s corporate headquarters, so the quote was delivered in person. When Sheila
went down to the lobby, she was greeted by the sales agent and an engineering
representative. After the quote was handed over, the sales agent noted that engineering
representative would be happy to work closely with Autolink in developing the unit and
would also be interested in future business that might involve finding ways to reduce
costs. The sales agent also noted that they were hungry for business, as they were
losing a lot of customers to companies from China. The quote included unit price,
tooling, and packaging. The quoted unit price does not include shipping costs. Original
Wire requires no special warehousing of inventory, and daily deliveries from its
manufacturing site directly to Autolink’s assembly operations are possible.
Original Wire Quote:
Unit price=$30
Packing costs=$0.75 per unit
Tooling=$6,000 one-time fixed charge
Freight cost=$5.20 per hundred pounds
2. Quote
The second quote received is from HLA of Guangdong Province, China. The supplier
must pack the harnesses in a container and ship via inland transportation to the port of
Shanghai in China, have the shipment transferred to a container ship, ship material to
Seattle, and then have material transported inland to Detroit. The quoted unit price does
not include international shipping costs, which the buyer will assume.
HLA Quote:
Unit price=$19.50
Shipping lead time=Eight weeks
Tooling=$3,000
In addition to the supplier’s quote, Sheila must consider additional costs and information
before preparing a comparison of the Chinese supplier’s quotation:
PowerPoint
Outline
1.
Introduction:
a brief overview of the case.
1.
Case Fac
ts
and the
R
oot Cause of the Problem
1.
Identify and list relevant case facts
1.
Identify and describe the root cause of the problem
1.
Identify and describe the problem componen
ts
1.
Analysis & Decision Making
2.
Generate alternatives
2.
Evaluate alternatives
2.
Choose best alternative solution and provide supporting reasons
1.
Action Planning:
Describe how you will turn your solution or decision into action,
how, when and what.
1.
Measurements:
R
ecommended measures that will evaluate performance of the
solution.
1.
Conclusion:
a summary of the key points of the case analysis
#3 Case Study
–
The Global Sourcing Wire Harness Decision
Learning Outcome #5:
Describe the key processes involved in domestic
and international
purchasing negotiation
Global sourcing often requires the evaluation of both domestic and international suppliers
simultaneously. These decisions often contain a complex array of variables that must be analyzed
to arrive at the most cost
–
effective supplier solution and providing optimal quality. Beyond just
arriving at the best cost, procurement professionals must consider a host of other factors such as
the supplier’s engineering prowess, future design changes, technical support, financi
al health and
cultural considerations as well. This case explores many of the typical components that must be
evaluated to ensure a long
–
term and dependable source of supply. Recommended reading:
chapters 10 and 11.
Global Sourcing Case Study Analysis Rubric
|
Grading Criteria |
Exemplary |
Proficient |
Needs Development |
|
Presentation Content 60 points |
The presentation identifies and demonstrates an excellent understanding of the key issues/problems in the case study. A thorough and insightful analysis of key problems and alternatives is presented. |
The presentation identifies and demonstrates a reasonable understanding of the key issues/problems in the case. An acceptable analysis of key problems and alternatives is presented. |
The presentation identifies and demonstrates a limited understanding of the key issues/problems in the case. A limited analysis of key problems and alternatives is presented. |
|
Presentation Aesthetics & Notes 40 points |
Slides are clear, clutter free with a consistent and attractive theme. Speaking notes are included in the notes section of the PowerPoint. |
Slides are mostly clutter free with a consistent and attractive theme. Some speaking notes are included in the notes section of the PowerPoint. |
Slides are often cluttered, and theme may be inconsistent. No notes are included in the notes section of the PowerPoint. |
PowerPoint Outline
I.
Introduction:
a brief overview of the case.
II.
Case Facts and the Root Cause of the Problem
a.
Identify and list relevant case facts
b.
Identify and describe the root cause of the problem
c.
Identify and describe the problem componen
ts
III.
Analysis & Decision Making
a.
Generate alternatives
b.
Evaluate alternatives
c.
Choose best alternative solution and provide supporting reasons
I
V.
Action Planning:
Describe how you will turn your solution or decision into action,
how, when and what.
V.
Measurements:
R
ecommended measures that will evaluate performance of the
solution.
VI.
Conclusion:
a summary of the key points of the case analysis
#3 Case Study
–
The Global Sourcing Wire Harness Decision
Learning Outcome #5:
Describe the key processes involved in domestic
and international
purchasing negotiation
Global sourcing often requires the evaluation of both domestic and international suppliers
simultaneously. These decisions often contain a complex array of variables that must be analyzed
to arrive at the most cost
–
effective supplier solution and providing optimal quality. Beyond just
arriving at the best cost, procurement professionals must consider a host of other factors such as
the supplier’s engineering prowess, future design changes, technical support, financi
al health and
cultural considerations as well. This case explores many of the typical components that must be
evaluated to ensure a long
–
term and dependable source of supply. Recommended reading:
chapters 10 and 11.
PowerPoint Outline
I. Introduction: a brief overview of the case.
II. Case Facts and the Root Cause of the Problem
a. Identify and list relevant case facts
b. Identify and describe the root cause of the problem
c. Identify and describe the problem components
III. Analysis & Decision Making
a. Generate alternatives
b. Evaluate alternatives
c. Choose best alternative solution and provide supporting reasons
IV. Action Planning: Describe how you will turn your solution or decision into action,
how, when and what.
V. Measurements: Recommended measures that will evaluate performance of the
solution.
VI. Conclusion: a summary of the key points of the case analysis
#3 Case Study – The Global Sourcing Wire Harness Decision
Learning Outcome #5: Describe the key processes involved in domestic and international
purchasing negotiation
Global sourcing often requires the evaluation of both domestic and international suppliers
simultaneously. These decisions often contain a complex array of variables that must be analyzed
to arrive at the most cost-effective supplier solution and providing optimal quality. Beyond just
arriving at the best cost, procurement professionals must consider a host of other factors such as
the supplier’s engineering prowess, future design changes, technical support, financial health and
cultural considerations as well. This case explores many of the typical components that must be
evaluated to ensure a long-term and dependable source of supply. Recommended reading:
chapters 10 and 11.