QUESTONS: 1- WHICH COMPONENT SUPPLIERS COULD BE ELIMINATED FOR OBTAINING A MORE OPTIMIZED SUPPLY BASE?

2- PLEASE ALSO CONDUCT A CUSTOMER BASE ANALYSIS TO ELABORATE THE DECISION.

Connecticut Circuit Manufacturers It was the morning of February 1, when Jack Veber, Senior Buyer at Connecticut Circuit Manufacturers (CCM), rece ived a phone call from a large customer complaining that an order had not been delivered on time. Since this was not the first such occurrence, Jack knew that he would be expected to present recommendations that addressed this problema the general management meeting the following day CONNECTICUT CIRCUIT MANUFACTURERS Connecticut Circuit Manufacturers was established in June 1980 and specialized in circuit board design and assembly CCM manufactured two product lines: Contract Products and Design Products CCM had manufactured Contract Products since the company first began operation in 1980. Contract Product customers provided the design of the circuit board and CCM manufactured the circuit board in specified quantities CCM expected to sell 4.000-5,000 units of Contract Products. Sales of Contract Products had grown consistently at 10 percent per year, and this growth rate was expected to continue in the next three years. Assembly operations varied among products and were based on design specifications and material requirements. A range of raw materials were used in circuit board assembly, including integrated circuits, resistors, printed circuit boards, connectors, cables, and fasteners Consequently, the production department at CCM worked very closely with the buying group with respect to inventory management. It was the buyer's responsibility to ensure that all supplies required for production were available in inventory Recently, production reached full capacity with a single shift. The company was growing and expectations were for rapid growth due to the introduction of Design Products CCM added a second shift in February that increased capacity to 7.000 units Twelve suppliers were currently providing CCM with the commodities required for circuit board production. The majority of these suppliers had enjoyed a long-term relationship with CCM. However, management felt that under current market conditions, additional suppliers could be developed to provide similar levels of quality, price, and Service Design Products were introduced seven months ago. For Design Products, CCM was responsible for the design of the circuit board as well as for production. As with Contract Products, Design Products were manufactured in quantities specified by the customer. Annual sales of Design Products for the current year were expected to be 5001,000 units. The company anticipated a rapid 40 percent per annum growth rate of this product line in the next three years. Management of CCM had been the same since the company was founded in 1980. All members of the man- agement team were middle-aged entrepreneurs who spent the majority of their time exploring new opportunities for the company. Management was very open with employees and encouraged them to voice concerns and recommen- dations that related to company improvement and growth. THE CCM SUPPY GROUP Jack Veber was hired as Senior Buyer by CCM on November 30. In his new role, Jack Veber was responsible for ensuring that all resistors and cables were available when needed for production. Jack Veber spent the majority of his time managing relationships with suppliers and keeping track of customer orders and deadlines. In order to keep inventory costs down, Jack Veber had to make sure that excess inventory of these items was kept to an absolute minimum Prior to coming to CCM, Jack Veber spent five years as an intermediate buyer at a large local manufacturer. His responsibilities at his previous employer included purchasing all commodities for two specific customers Jack Veber gained experience in purchasing all types of commodities and claimed this was the main reason he was offered the position as Senior Buyer at CCM. Along with Jack Veber, another Senior Buyer and one Junior Buyer handled purchasing at CCM. The other Senior Buyer was Al Cooper, who had been with CCM for 15 years. His responsibilities included purchasing all types of integrated circuits and connectors and printed circuit boards. As integrated circuits and printed circuit boards The manufacturing of circuit boards was a competitive industry, and margins on a single circuit board were small CCM had three local competitors who manufactured high- quality circuit boards at competitive prices. PRODUCTION CCM assembled circuit boards in batches, and production lot sizes were based on confirmed customer orders. Company also hoped to attract new customers for its Design Products and expected that Design Product business would lead to additional Contract Product business. CCM providing them with me was sh were expensive to keep try. Al Cooper spent the mofis time track of integrated courthoud requirements for production and managing existing relationships with integrated circuit boued suppliers Tim LeBlanc was the Junior Buyer. He started with two years ago, immediately after buting with purchasing degree from a local college Due to limited expenence, Tim LeBlanc had minimal purchasing responsibility. His main role was to assist the Senior Buyers by with required production information Tim was also nsible for purchasing all types of screws. nuts, and washers locally, as him gained experience, he would be piven more purchasing respotsibility In February, CCM had five customers. Three of these were regular were Design Product customers. Contract Product customers tended to be sensitive to product quality. price, and on-time delivery Design Product customers were mainly conscious of product quality and customer service. The main features of customer service as defined by these customers were on- time delivery and effective customer relations. The responsible for kozen customers customers hea Contract Product customers and two These custom an ongoing business relationship with CCM THE GENERAL MANAGEMENT MEETING As part of becoming better acquainted with CCM's requirements, Jack Veber had gathered some information and created summary tables provided in Exhibits 1 and 2 He did not know yet whether these might be useful in rethinking CCM's supply strategy and execution The phone call he received earlier that moming was from Customer complaining about a late delivery Several weeks carlier a similar phone call was received from Customer A Jack Veber had a meeting with uppet management the next day at the general management meeting Upper management was already aware of the complaint made by Customer A and would most likely be made aware of Customer E's complaint before tomorrow's meeting. Jack Veher was eager to determine what factors might have led to the delivery problems but had no specific information yet During the general management meeting. Jack Veber planned to present his analysis and provide recommendations that would reduce the possibility of similar problems occurring in the future (1) Which component suppliers could be climinated for obtaining a more optimized supply base? (2) Please also conduct a customer base analysis 10 elaborate the decision AB obst EXHIBIT Connecticut Circuit Manufacturers: Annual Component Purchases Item same Integrated circuits Resistors Printed circuit boards Connectors Cables Screws, nuts, washers Annual orders (parts) 50,000 500.000 7,000 14,000 8.000 448.000 Buyer Cooper Veber Cooper Cooper Total Annual Purchases $250.000 $50.000 S105,000 $35.000 $24.000 $15.680 Veber LeBlanc EXHIBIT 2 Conneeticut Circuit Manufacturers Annual Purchases for Each Customer Item name Customers D A 15 15 4 B 10 40 3 20 18 5 E* 25 10 7 Total 73 93 20 12 1 Integrated circuits Resistors Printed circuit boards Connectors Cables Screws, nuts, washers Total # items Total material value 2 2 8 4 2 12 3 2 10 1 0 10 13 10 50 10 27 $14.680 58 $80,000 71 $50,000 61 $200,000 263 $479,680 46 $135,000