Fauquier Gas Company

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Case Name: Fauquier Gas Company

I.Major Facts

1.Fauquier Gas Company is one of 440 gas companies in the United States. 2.Mr. Bill Murphy is the manager of supply management in the Carolina’s. 3.Mr. Murphy is responsible for the purchase of materials used in the gas distribution process such as fittings, pipes and meters. 4.Mr. Murphy is also responsible for the procurement of furniture, stores management, materials forecasting and control, systems and forms. 5.Supply falls under the management control of the vice-president for operations. 6.Needs to acquire 3.5 miles worth of large diameter pipe for a residential and commercial development. 7.Land usage is changing within the company’s area of service from agricultural to residential and commercial. 8.To meet the increased demand the 3.5 miles of new pipe must be installed by September. 9.Ten additional miles of pipe are planned to be installed by the end of next year. 10. Construction on the project was slated to begin in June. 11. Construction on the project was to end in September to “gas the line”. 12. Mr. Clive Byers is the construction project manager.

13. Mr. Murphy requested a purchase request from Mr. Byers to begin contacting suppliers for quotes on prices and deliveries. 14. Experience dictated to Mr. Murphy that the lead time for pipe production was substantial. 15. Mr. Byers told Mr. Murphy that the purchase request would be sent to him after Mr. Pat Wilson approved it. 16. Mr. Pat Wilson is the design engineer.

17. Mr. Sam Law is the construction project engineer.
18. Mr. Charlie Buck is the design superintendent who headed the design organization. 19. Design and construction organizations are under the control of the vice president of operations. 20. Pipe specifications were retrieved from Mr. Wilson after a phone call from Mr. Murphy. 21. Specifications for the pipe s are 24 inches wide with a wall thickness of ¾ inches and a length of 57 feet. 22. Prior purchases called for a wall thickness of 3/8 inches and “random double normal” 23. Random double normal is considered 40 feet plus or minus 5 feet. 24. After inquiry, the line would be governed by less stringent specifications if the wall thickness was 3/4 inches thick. 25. The 57 foot length pipe would reduce welding costs.

26. The wrapper of the pipe has not yet been determined.
27.Two types of wrappers have been used in the past – coal tar and pry-tech. 28.The mill supplying the pipe will apply the wrapper.
29.The company that applied the coal tar wrapper is located in Philadelphia. 30.The company that applied the pry-tech wrapper is located in Atlanta. 31.Mr. Murphy has concerns about the economic consequences and the schedule impact of the proposed changes in wall thickness and length of the pipe required. 32.As of April 14th Mr. Murphy had not yet received the purchase request.

II.Major Problem

The key problem is the program manager (Mr. Byers), the design engineer (Mr. Wilson), the construction engineer (Mr. Law) and the design superintendent (Mr. Buck) have not indicated to the supply section, specifically Mr. Murphy that they have upcoming needs for a large project. They have not even indicated that a project is being prepared or designed. Had it not been for an overheard conversation, supply would not have a clue that these needs are forthcoming, they have not taken into consideration that the materials for the project need to be ordered, manufactured and delivered for their project. It has been approximately four months since Mr. Murphy has asked for the information regarding this project. This is completely unacceptable and can potentially cost the company a large amount of money and time in order to make the projects suspected timeline.

III.Possible Solutions

1.Mr. Murphy can ask his suppliers for an estimate for the new piping with coal tar wrapping at the delivery dates he currently knows. 2.Mr. Murphy can ask his suppliers for an...
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