From: Jared John Hicza
To: Jim Hicza
Re: Selection of Supplier for Presses
My recommendation is to go in for a single source and choose the supplier that we have confidently have had a relationship with, without a problem, for over a decade now. Major of Action plan:
•Choose JabaKing as the supplier of choice.
•Get an investment loan from Labour Central Credit Union @ 5.25% for next 10 years. •Visit an operational facility using JabaKing’s presses. •Procure presses from JabaKing with appropriate people assigned duties and with proper checks in place. •Commission the presses with assistance from Jabaking.
•Evaluate maintenance for the first three warranty years and then budget accordingly for the next seven years. Jim Hicza
Table of Contents
Executive SummaryPage 1
Table of ContentsPage 2
List Issues with Impact AnalysisPage 3
Environmental & Root Cause AnalysisPage 4
Alternatives and / or OptionsPage 6
Monitor & ControlPage 9
List of Issues with Impact Analysis
Platinum is on the verge of major expansion. At this stage, the main issue facing the company is whether to single source the press or utilize multiple sources for the press. Platinum has had a long-standing relationship with JabaKing, where the latter had helped the company out over a decade when no other supplier was ready to do business with the company. JabaKing had made it evident at that point in time that it was a favor that was expected to be returned. Currently, due to the expansion and growth prospect, Platinum needs to decide which supplier / suppliers it will utilize to make a purchase of 5 additional presses for its operations in Winnipeg. It is very important that the company take a decision with immense due diligence, as the procurement / purchase entails long-term implications of up to over a decade. These implications are financial, labor, asset and customer related. As the company is expanding and growing to double its sales in three years, it is imperative that the company invest in equipment that is reliable, is procured at a reasonable rate of interest and is bought form a supplier that will be an asset rather than an impediment in this targeted growth.
Environmental and Root Cause Analysis
One time tested partner, JabaKing - This company is known to be our long standing supplier. As we were embarking on a new mission in 1992, we had little choice but to have JabaKing as our supplier. Even though JabaKing helped us when we started out, the quality of their presses was never really considered to be the best, even though it was good. Besides, JabaKing is heavily unionized. In addition, the union of Amalgamated Association of Printers and Related Equipment Supplier, AAPRES, has plans to unionize all print shops in the coming two years. This can have a negative impact on our business, which is currently running as a non-union shop. It is, however, worth considering that we already have five presses from JabaKing and our workers and maintenance staff have a high level of familiarity with the equipment, which has been running strong for over a decade. Worthy of consideration is also the close proximity of this supplier to our plant. One factor that makes JabaKing stand apart from others is that it is a company that is over a century old, which means that the company is fairly stable.
The high performer company from the orient, Merakuri – The Merakuri Luxo 10000, out of all three prospective presses, has the highest run rate per hour of 10,000 sheets. In addition, the press can handle up to 150cm stock, which gives our company some flexibility in terms of product portfolio. So far, Platinum has used presses that can handle 125cm only. Merakuri is located in South Korea. This means that apart from getting the presses from South Korea...