Plastic Cable Clips Case Study

Assignment #5

Case #12-3 Plastic Cable Clips

Fisher & Paykel

• Largest Manufacturer of Home Appliances
• Location: Auckland, New Zeland
• 8 operating Divisions
• Major Appliances: $135000000
• Total Sales: $ 270000000
• $36000000 – export sales & royalty income
• Laundry Division ⁄ 500 employees

New line of Automatic Washing Machines

• Key Priority- Maintaining Least cost
• Hope to Produce- 75000 to 100000 new machines
• 6 types of ties (total 45) plastic clips to be used in each machine comparing to 20 diff. ties (total 250 ties) in the old washing machine
• Suppliers to be decided
• Quotations invited

Total Purchases from multiple suppliers for the old machine - $ 1250000

• $500000 Olson Plastics
• $500000 Barry Cleaver
• $200000 GT Rollman
• $50000 Plastic Distribution

Oslon

• $ 500000 order
• Local Manufacturer
• Supplier for many years
• Quality not as high
• Service problems
• Prices twice as high
• Delivery - major concern, unreliable
• Lead time- 6-8 months
• Capacity Issues
• Government Protection

Barry Cleaver & Sons

• $ 500000 order
• Excellent reputation
• Barry Clever - advisor
• Importing from Japan
• Prices – excellent
• Service - excellent
• Delivery - good
• Lead time - 6-8 months
• Licence could be revoked- past issues
• Technical expertise

GT Rollman

• Agent Importing from Australia
• Excellent Services
• High prices
• Good Delivery
• In bad times: 3-4 months
• Urgent Times- 6 weeks
• Possible Duty Free Access to Australian market
• Australia had strong relations

Plastic Distributing

• Small Young Company
• Fulfilled orders in tight times
• No technical expertise
• Eager to acquire orders

Selection Criteria

• Location - New Zealand or Australia preferable
• Lead Time
• Services
• Costs Involved - Procurement & Storage

Advantage/Disadvantage

Olson - Advantage

• Old Supplier
• Protection from Government

Olson – Issues

• Cost
• Delivery
• Service
• Quality
• Insufficient capacity

Barry Cleaver – Advantage

• Reduced Lead time
• Excellent service
• Technical Expertise

Barry Cleaver – Issues

• Revoking of permission

GT Rollman – Advantage

• Excellent Service
• Fast Delivery
• Urgent Delivery
• Reduced Storage costs
• Duty Costs minimum
• Australia Preferable choice

GT Rollman – Issues

• Very high cost

Plastic Distribution – Advantage

• Gave order in tight times
• Eager for orders & performing

 Plastic Distribution – Issues

• New
• Small
• no Technical Expertise

Cost Analysis

G.T.Rollman

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• Insufficient quote
• Expensive

Course of action:

• Inquire about pricing
• Negotiate better prices

Barry Cleaver & Sons