Introduction to Supply Chain Management TLMT 313 B001 Sum 12 Michael Upshaw
July 15, 2012
I. Major Facts
• Pacific Healthcare is the largest health care provider in Santa Barbara County. The institution consists of three hospitals: Pacific Memorial (415 beds), Pacific Cabrillo (250 beds), and Pacific Isla Vista (300 beds); also included are two nursing homes and ten outpatient clinics. All combined, Pacific Healthcare has over 1,500 beds.
• Barney Rubble, corporate director of supply management for Pacific, is in charge of procuring supplies for all Pacific Healthcare subsidiaries.
• Mr. Thurston Howell, director of radiology, had been in charge of supplier selection of X- ray film at Pacific for the past fifteen years. In the past, Mr. Howell refused to authorize the use of any X- ray film other than Kodak.
II. Major Problem
Even though Kodak film has been the industry standard in the past, Mr. Rubble has reason to believe that the current Kodak price was above that of possible competition. However, the existing agreement with Kodak calls for furnishing X- ray equipment, along with maintenance and service, at a substantial discount for using Kodak as the single supplier of the X ray film. Kodak refused to provide these services if it were not the only source used for X- ray film.
III. Possible Solutions
Mr. Rubble could:
A. Consider requesting that Kodak meet the price of the competitors to maintain the business of the company. B. Consider changing suppliers to one of the competitors which will provide the X-ray film with the same high quality but lower price. C. Choose to stay with Kodak because of their pre-existing business relationship and improving track record as an industry standard, even though there are competitors with consistent quality and cheaper prices. D. Choose to go with a...