Source: Adapted from Gary J. Zenz, Purchasing and the Management of Materials, 7th ed. (NY:John Wiley, 1994), pp. 623-624.
Factory Enterprises, Inc.
Factory Enterprises, Inc., makes automobile air conditioners for car dealer installation. The firm owns the patents and makes the product at a sizable markup. As a result, the 20-year-old company pays its private owners very well.
The enterprise shows growth in overseas sales at the very time that domestic market demand is exploding. This exhausting situation calls for total effort by all company personnel: 8 managers and supervisors, 30 factory workers, and 6 office employees.
In addition to their regular duties, various people purchase materials and component parts. The production manager buys finned radiators and copper tubing. The shipping supervisor buys mounting assemblies, to which workers attach all of the component parts in the final process. The sales manager buys shipping cartons.
You have just joined the company as the purchasing manager.
1. Describe for the president the materials management concept. What would it do for the company and what would it do to the company?
2. What action steps would you follow to install the material management concept if the president decides to adopt it?
3. Explain how sales and purchasing can help each other by establishing a good relationship.
4. European customers insist on ISO 9000 compliance. How should the company respond?
Responses should consist of an in-depth analysis, discussing long-range opportunities and consequences for actions taken by the company in question. Reference Chapter 10 (Supply Chain Management) for support information.
Answer the questions above in the form of a 3-4 page business letter to your company president (Mr. Foley). Your task is to convince and persuade Mr. Foley that you, the “new person” can improve upon the success he has already achieved by changing operational relationships, perhaps upsetting other managers, and investing capitol in programs that might not otherwise be considered. The letter should be single-spaced within paragraphs but with a single space between paragraphs – with a 12-point font.