wedlock engineered products case study

Q$1)$How much weight should be placed on previous supplier performance when selecting a supplier?

Q$2)$Is $$24,000$ in savings worth the trouble of switching suppliers?

Q$3)$What will the response be from Vergis if you stay with Marandi, after they provided a lower bid?

Q$4)$Do you want to split the business between the two suppliers?

Q$5)$If you switch to Vergis for the $3-$inch tubes, how will that affect your relationship with Marandi for the rest of your business with them?

Q$6)$Wedlock Engineered Products

Cynthia Gao, procurement manager for Wedlock Engi$-$

neered Products in Buffalo, New York, was reviewing a

proposal recommending that the company change sup$-$

pliers for a critical raw material. It was June the $3$rd$,$ and

Cynthia needed to decide before the end of the day how

she would respond to the proposal.

WEDLOCK ENGINEERED PRODUCTS

Wedlock Engineered Products $($Wedlock$)$ manufactured

and distributed hydraulic, power$-$assisted, air$-$powered,

and standard mechanical dock levelers, and dock seals

and sheIters, and vehicle restraints. Wedlock had profits

of $$50$ million on sales of $$450$ million in the most recent

fiscal year ending December $31.$ The company had en$-$

joyed double$-$digit growth over the previous decade, sup$-$

ported mainly through an aggressive acquisition strategy.

Wedlock's growth masked cost pressures the company

was facing in its key markets. The company's annual re$-$

port indicated that fimancial results were lower than ex$-$

pected due to price erosion. In February, the CEO, Dmitry

Barsukov, announced a corporate cost$-$reduction initiative

aimed at improving the company's competitive position.

As part of the announcement, Barsukov specifically men$-$

tioned "opportunities for supply chain savings through

coordination of purchasing between operating units and

divisions."

The Buffalo plant manufactured hydraulic dock lev$-$

to support the hinge connected to the lip of the platform

that allowed it to lay flat or unfold, in order to connect

or disconnect from the transport trailer. The tubing was

required to meet specific metallurgical standards or else

the tubing would warp or crack, causing the loading dock

to malfunction.

The current supplier for $3-$inch tubing was Marandi

Steel $($Marandi$).$ Located near Buffalo, Marandi distribut$-$

ed a wide range of carbon, stainless, alloy, and aluminum

tubing; pipe products in round, square, and rectangular

shapes; and steel plate to manufacturing companies in the

eastern Unit$$d States and Canada. Marandi had been a

supplier to the Wedlock Buffalo plant for approximately

$15$ years and provided excellent service. Cynthia had a

strong working relationship with the general manager atIs using an RFQ the right approach in this situation?