Case 1-2: Erica Carson
Group: ___A or B________
* Erica Carson is PM for Wesbank, a financial institution (note: You are Erica)
* Reports to VP Supply
* Unsolicited bid from Art Evans, Sales Rep. Killoran Inc.
* 10% reduction on printing and mailing of checks
* not current supplier
* Westbank provides free checks at a cost of $8M per year
* Current situation – 50% split suppliers, last 5 years
* Supplier A prints and mails 50% checks, renewed contract 8 months ago
* Supplier B prints and mails 50% checks, contract ...view middle of the document...
What alternatives are open to Erica Carson here?
6. What action will you take? Why?
* Talk to VP Supply, review proposal
* Review cost – benefit analysis?
* Present case to upper management
* Determine if Killoran is viable supplier?
* Supplier audit – process capability
* Supplier trial run – service, quality, cycle time, order entry, responsiveness
* Have joint meeting
* Make recommendation with implementation plan
* Select Killoran proposal – define phase in/phase out strategy, determine cancellation costs, risk management
* Or, not accept Killoran proposal
* Stay course with current suppliers
* Or, rebid current suppliers, economics can change in 1 year
* If accept Killoran proposal;
* $800k savings
* manage risk (reputation)
* new contract terms, maybe 1 year, (due to emergence of internet banking)
* additional revenue, open new markets (share new business margin of scenic checks)
* If not accept Killoran proposal;