Short term issues with Red/ Ashmark relationship (that made bankruptcy critical) - Red Star rejected the well-thought plan for an organized shut down. That would have helped maximize value for both parties. This short term issue made the bankruptcy even more critical for Ashmark Long term issues with Red/ Ashmark relationship (that made bankruptcy critical) - Red Star was one of the key suppliers to Ashmark for decades providing quality products at unmatched prices. They added more capacity to provide finished products to Ashmark and fit with Ashmark’s corporate strategy of focusing on higher value-adding production. Ashmark needed a supplier that could match the quality and cost that Red Star offered, hence making the bankruptcy critical. Recommendations: a) Urgently find a suitable replacement for Davis, b) think in lines of strategic sourcing, c) initiate supplier development program (Ashmark should have helped a critical supplier like Red Star, serving them for decades both in terms of quality and unmatched price, but they instead pushed Red Star to the brink of bankruptcy) The company stored all of its tooling components off site so there was no confusion about ownership. This was an effective step and was crucial for Ashmark to retain its property and develop a new supplier quickly and at less cost Tilden’s intentions were good as he was protecting his employee and looking out for his welfare Tilden’s intentions were good as he was protecting a critical employee needed in this crisis and was looking out to keep his team intact.
Actions taken by Ashmark
Ashmark had been late for 200 units of production, less than 1%, 1) Loss of Davis was was a big one.
2) New supplier having problems setting up the tooling to meet Ashmark’s requirement by the due date. 3) Inventory had diminished.
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