Temko Earthmovers
Case Study: TEMKO Earthmovers
Presented to
Mr. Willy Cuason
Decision Sciences and Innovation Department
De La Salle University- Manila
In Partial Fulfillment of the Requirements for
SUPPMAN (M71)
Submitted by:
Chu, Hyemin
Cruz, Charleen Grace
Lim, Nicolai
Tamayo, Glaiza May
Submitted on:
June 2, 2015
Table of Contents
I. Case Background …………………………………………………………………………...2
II. Summary of Findings ……………………………………………………………………….2
III. Statement of the Problem …………………………………………………………………3
IV. Analysis of Alternatives …………………………………………………………………...3
V. Detailed Recommendations ………………………………………………………………5
VI. Learnings …………………………………………………………………………………..6
VII. References …………………………………………………………………………………6
I. Case Background TEMKO Company has encountered problems in their purchased short-block castings. These short-block castings are used to build the R-208 engines for the tractor. Due to the defects that were found, the short-blocks need to be disassembled in order to be repaired. Each short-block would cost around $1550-$1700, depending on the supplier.
The purchasing manager, James Sun, recently released an RFQ for short-block to three different companies that supplies assembled tractor engines. Among the three companies, only one was interested, which was ACE Manufacturing Inc. ACE is a small startup company looking for partners. Producing assembled R-208 tractor engines would require an investment of more than 1.5 million dollars. ACE is willing to make the investment and provide at least 100 engines per month to TEMKO, as long as TEMKO would contract with ACE as its sole source for the tractor engines.
II. Summary of Findings TEMKO Earthmovers are incurring defects in some of its purchased tractor short-block castings used to build R-208 tractor engine. Approximately 10 out of 100 units needed to be disassembled and repaired leaving 40% of it scrapped. It takes approximately 8 hours per repair. Each short block
Presented to
Mr. Willy Cuason
Decision Sciences and Innovation Department
De La Salle University- Manila
In Partial Fulfillment of the Requirements for
SUPPMAN (M71)
Submitted by:
Chu, Hyemin
Cruz, Charleen Grace
Lim, Nicolai
Tamayo, Glaiza May
Submitted on:
June 2, 2015
Table of Contents
I. Case Background …………………………………………………………………………...2
II. Summary of Findings ……………………………………………………………………….2
III. Statement of the Problem …………………………………………………………………3
IV. Analysis of Alternatives …………………………………………………………………...3
V. Detailed Recommendations ………………………………………………………………5
VI. Learnings …………………………………………………………………………………..6
VII. References …………………………………………………………………………………6
I. Case Background TEMKO Company has encountered problems in their purchased short-block castings. These short-block castings are used to build the R-208 engines for the tractor. Due to the defects that were found, the short-blocks need to be disassembled in order to be repaired. Each short-block would cost around $1550-$1700, depending on the supplier.
The purchasing manager, James Sun, recently released an RFQ for short-block to three different companies that supplies assembled tractor engines. Among the three companies, only one was interested, which was ACE Manufacturing Inc. ACE is a small startup company looking for partners. Producing assembled R-208 tractor engines would require an investment of more than 1.5 million dollars. ACE is willing to make the investment and provide at least 100 engines per month to TEMKO, as long as TEMKO would contract with ACE as its sole source for the tractor engines.
II. Summary of Findings TEMKO Earthmovers are incurring defects in some of its purchased tractor short-block castings used to build R-208 tractor engine. Approximately 10 out of 100 units needed to be disassembled and repaired leaving 40% of it scrapped. It takes approximately 8 hours per repair. Each short block
References: Whittington, E. (2006).The Only Game in Town, Purchasing Single/Sole Source Goods Effectively. Retrieved from: https://www.instituteforsupplymanagement.org/files/Pubs/Proceedings/HDWhittington.pdf Edmunds,S. (2013). The Pros & Cons of Manufacturing Products With in-House Manufacturing. Retrieved from:http://www.ehow.com/info_8120513_pros-manufacturing-products-inhouse-manufacturing.html