please write summary and personal conclusion

CASE FOR ANALYSIS Why Is Cooperation So Hard? Armando Bronaldo immigrated to the United States six solid customer base. In my eagerness to get the contract years ago after working as design leader for an Italian and in trying to please the head of a big company, I found company specializing in home sound systems. Armed with myself saying 'Yes' and carrying out his wishes and de a vision and 15 years of experience, he founded his own mands." Bronaldo admits. "Because we were a young company, Technologia, as the supplier of sound trans company and because he is, by far, our biggest customer, 1 lation components including the base radiator, dome think he got into the habit of assuming the focus would re- tweeter (for high frequency), composite cone (for mid- main on his needs and his profits throughout the business range sound), the binding post (for sound translator delive relationship. But now, with our feet under us as a com- ery), and ohms impedance (for conducting sound through pany, I think it is time to look again at the relationship the speakers). As it builds its reputation for quality and between the two companies." supply chain service and delivery, Technologia relies Richards is satisfied with the present arrangement he heavily on continuing a solid relationship with AUD, a has with Technologia and sees himself as both partner and manufacturer of home sound systems, under the managementor, as he recently explained to a colleague. "Bron ment of CEO Audie Richards. AUD was the company's aldo came to this country and started his company and I first contractual partner, currently accounting for 50 per. was willing to give him a chance, set up our logistics, and cent of the small supplier's business. The initial agreement make it possible for him to grow his company. I think it's with AUD has grown and the current business relation worked out very well for AUD. And now he talks about ship brings a steady stream of orders that has enabled wanting to change the way we do things. I'm suspicious Bronaldo, even in a tough economy, to add workers over about what he has in mind. But he needs us more than we the last three years. Bronaldo loves the reliability of sell need him. Look, I've got a good supplier; he gets lots of ing to AUD, but he sometimes questions whether the busi business from us, I see no reason to change it." ness relationship is overbalanced in favor of the powerful Although the relationship and dialogue at the top manufacturer management level is strained, mid-level managers at both "I think in the beginning Audie played his hand well, companies do talk and are eager to explore and imple knowing that we were a start-up and trying to secure a ment a new vendor managed inventory (VMI) system that builds a partnership of strong interdependence and equity. So, what we're saying here is that it is not just a dis- Instead of sending purchase orders, VMI involves sharing cussion about these two organizations, but a consideration daily electronic information about AUD's sales, so inven- of the whole supply chain. The cost of lost flexibility, tory is replaced automatically by Technologia. Mid-level the lack of shared information. It's costing both of them. managers Larry Stansell (AUD) and Victoria Santos (Tech. And the sudden spikes in production requests by AUD, nologia) regularly correspond and meet to find potential in response to its retail customers, creates unnecessary areas for close cooperation, information sharing, and problems in production planning at Technologia and un- problem feedback. necessary stress for the management and workers at both "I know that Richards is suspicious, but it really is companies." time for these two guys to take a new look at this business "VMI could be a powerful tool that empowers and relationship and how they can address issues that could brings value to both sides," Stansell says. "Through be beneficial to both." Santos says. "The playing field has this system, Technologia will be able to create orders changed. Technologia is stronger." for us based on direct access to our orders and demand "But the relationship has not changed and I don't think information--both short and long-range needs...." it will until Bronaldo finds a way to reduce his dependence "And then, we can work together, determining the on AUD. In the meantime, flexibility, information-sharing, most cost-efficient way to manage and deliver the inven- and reconsidering a range of cost-efficient options is im- tory," Santos continues. "We'll look at the entire supply portant," Stansell admits. "But we have to start with the chain to see where changes and even minor tweaks can discussion of whether AUD calls all the shots between our be made to bring down costs and make the partnership two organizations." strong, but there would have to be equal give and take." "Yes, and that discussion must include logistical "Flexibility on both sides is necessary to make this issues," Santos says. work." Stansell points out. "This is not a competition. "Delivery, the disagreements about the pallets ..." Nobody has to be right." "Richards set up all of that initially-what would "But getting top management on-board to make this work best for delivery to AUD," Santos says. "But Bron work is our real challenge." Santos says. "And we have aldo insists that PM rather than AM pick-ups would be to start looking ahead. VMI could be a stepping-stone to better and that a change in pallet companies, from Brad Jointly Managed Inventory (JMI), an even deeper collabo- ley Packaging to Eastmont Packaging, would cut costs ration, allowing the increased tactical planning and the real per trip by reducing mileage. Plus Eastmont has a new integration of Techologia and AUD's point of sale systems. custom-made pallet that provides greater load stabilization that will offer optimal cost sharing and real time sales data, necessary for high tech components. The savings for Tech. allowing us to stay ahead of the curve in production plan nologia would be shared with AUD." ning as well as logistics to meet AUD's needs in real time." "But Bradley has a long time business relationship of "So, what's our next step?" Stansell asks. "How can its own with AUD," Stansell points out. we make this happen