This paper analyzes and examines the case article entitled “Custom Fabricators, Inc. – From Lean Manufacturing to Contract Manufacturer. It aims to identify the business challenges faced by Custom Fabricators, being led by Ben Lawson, and the solutions or strategies that can be implemented to maintain and enhance its position in Orleans Elevator’s business supply chain.
Custom Fabricators Inc. Challenge: Orleans Elevators Materials Outsourcing
The main business challenge that Ben Lawson is facing as Chief Executive Officer of Custom Fabricators Inc. is how to re-think or re-position its business in order to cope with Orleans Elevator’s action of outsourcing low-cost raw materials from Mexican suppliers through the use of an internet purchasing system.
Custom Fabricators Inc. Strategies
Utilizing the Comparative Advantages
With its long working history with Orleans, Custom Fabricators Inc. has a well-established reputation as a reliable supplier. Custom Fabricators Inc. is already familiar with Orleans' requirements, while Orleans knows the quality of products to expect from . Moreover, this close partnership can lead to a differentiation strategy by sharing market research with Orleans and develop new options for the elevators. The close-proximity of CF's plant to Orleans' work site helps lower shipping and transportation costs, i.e. lower total cost compared to possible future competitors. At the same time, CF can respond quickly to changing requirements and can control delivery time. Furthermore, the employees' tenure and experience could mean that they are adept with their functions. High productivity could also arise from the good working environment and high employee morale.
In response to Orleans Elevators’ action of outsourcing low-cost materials from Mexican Suppliers, Custom Fabricators Inc. will focus on providing high-quality yet low-cost control panels and motor housings. By...