last question

how close is too close?

Tim Tree, senior vice president of supply chain management at Top Line Inc, sat silently in his office, pondering the ramifications of the formal letter of invitation that help in his hand. the letter was from Top Line most important customer, Dynamo Inc and extended the unique opportunity to become one and only few 'partner' suppliers to Dynamo. the letter pointed out that the 'Partner designation represents the apex of Dynamo supplier relationshipd and is awarded exclusively to carefuly selected suppliers with whom our company shares common relationshipd and is awarded exclusively to carefully selected suppliers with whom pour company shares common objectives and a commitment to a long term, mutually benefitial interaction geared to meeting our customers' needs.$\text{'}$ Tim couldnt help out but wonder whether Top Lone was ready for the time and resources comitments required to participate in such a tighly coupled relationship.

as tim considered what a yes or no decision $,$might mean, he reflected on the changes thatr has taken place at Top Line over the past $24$ months. just a little over $2$ years previously, Top Line had found itself perilously close to financial ruin. Quality levels were suspect, productivity was below industry standard and it seemd that Top Line couldnt deliver products to key customers on time if its future depended on it $($which it did$).$

the only thing standing between top line and bankcruptcy was a set of $7$ patents that protected Topo Line's key process and product technologies. unfortunately, the two most important patents were set to expire within $18$ months. this fact spurred a new determination to improve top line's $10$ most important customers in an attempt to find out just what constituted world$-$class service. after evaluation the customer feedback, top line embarked on a total quality campaign coupled with a lean logistics intiative. as a result, quality defects had dropped to an average of $250$ parts per million, delivery performance had improved to almost $98\%$ on time, and productivity had increased by over $15\%.$ sales had incrased by almost $30\%$ in the past year to $$1\mathrm{.}32$ billion and top line has increased its market share to $8\%$ of teh global market.

top lines performance improvements had not gone unnoticed. in the past year, top line had received one 'suppliuer for the year' award and had been ranked 'key supplier' status by Dynamo. the entire senior management team at top line was certain the company was on right track. initially the letter from Lisa, VP of sourcing dynamo seemed to confirm this feeling renewed confidence. and everyone felt obvious yes yet there were some questions about the amount resource dedication needed to live up to DYNAMO's expectations. time had been asled to investigate the matter further and provide a detailsed recommendation regarding the nature of the relationship that top line should pursue with dynamo. tims first step had been to scour the packet that had come with lisa's letter to identify dynamo's expectation of top line. time highlighted a few key points:

$-$ pasrtner suppliers must work with dynamo toward continious improvement.

$-$ pasrtner suppliers must share information regarding cost, technologu and resources

$-$ partner supplier must share realt time quality, inventory and process change information

$-$ partner supplier must use cost reduction programs ro reduce cost by $3\%$ per year

$-$ partner supplier must participate in quarterly 'business performance review'

$-$ partner supplier must attend dynamos annual business performance review

$-$ PS will be early participants in new product design process.

$-$ planning and production schedules are integrated and order lead times reduced.

$-$ technology shared, protected to create unique product$/$service offeirng.

$-$ information is shared about business opprtunities and enhance profitability

$-$PS are sole source for vital components

$-$ PS are candidate for collaboration and resource sharing in the form of co$-$located engineering personnel, vendor$-$managed relationships, supplier$-$integrated manufaturing.

Reviewing the list of expectation created a sense of concern in tim's gut that he simply was not confident that top line could live up to the challenges. communication information real$-$time, sharinf technology, integrating planning and production schedules and dedicating resources to a customers operation were not soething top line was accustomed to do$.$

nevertheless tim saw opprtunity for top line to grow its capabilituies and sales by working closely with dynamo. his final recommendation has to be based on realistic assesment of top line's ability to successfully collaborate with dynamo despite its relatively constratned resources. tim wondered whether the benefits of 'partner' status overweighs the cost. was ot possible that building a closer relationship with a key customer might not be the right thing to do$?$

part a: explain how you would