Your supervisor, Dave West, urgently calls you into his office, just as you’re putting on your coat to go to your son’s first T-Ball game on Thursday night. Dave outlines the need for your help on an urgent request he’s just received from manufacturing and marketing leaders for increased production. You already know that manufacturing operations have been shut down three times this month due to lack of supplier material and had no advanced warning of a potential disruption. Rob Barry, Vice President of Manufacturing, is extremely concerned knowing next month starts the launch of a new “Premium A” product. Early customer feedback indicates demand exceeding the current operating plan and Marketing would like to increase the plan by !5%. Rob has requested confirmation that all risks are being addressed and that he’d like supply capability 25% above current plan. He has requested a summary review with his staff first thing Monday morning on the Risks for the new product launch and countermeasures planned. He’d also like your recommendation on if you can support the 25% capacity increase?

Production Planning for “Premium A” Product:
Month    Production plan (units/day)    Mfg. Request
4/2020                  1200                                     1500
5/2020                  2100                                     2625
6/2020                  2800                                     3500
7/2020                  3000                                     3750    
8/2020                  3200                                     4000
9/2020                  3500                                     4375
Note: Mfg and supplier capacity was planned for 3500/day (2 shifts) with mfg capable of adding 3rd shift with 60 days notice.


Dave, knowing you are a recent graduate from WSU, views you as one of his highest potential employee’s and recently assigned you to lead SC Risk analysis for NA Operations. He knows he can depend on you to provide a thorough review that he can present on Monday. He’s asked you to summarize your recommendations with a one-page document (Executive Summary) and 3-4 pages of backup documentation that he can review over the weekend that recaps your approach to mitigate the current issues (production disruptions, new product introduction and request for added capacity). He’s also asked you to look at the current sourcing strategy. He’s asked “Should we continue to engineer and source all products with pay on ship while maintaining a 3 day buffer for all parts at the mfg plant?”

Dave has been very concerned about the launch of the new “Premium Product” and asked you to analyze supplier readiness with your team. Your analysis included a deep dive of the non-US based suppliers. Initial findings have discovered:
• 13 Tier 1’s in central MX, with heavy dependence on Mexican Tiered suppliers
• 17 Tier 1’s in Asia (all in China, Japan, Vietnam and Malaysia)
• 3 Tier 1’s in Manila Philippines (computer processors that could be flashed at Mfg Plt)
• 1 Tier 1 in Caracas Venezuela (low dollar non-engineered part…remote area)
• 12 Tier 1’s in Canada, of which employees for 4 suppliers are represented by Unifor and ships weekly by rail
• 3 Tier 1’s in UK, that the SC team failed to order parts from a new supplier and has just begun expediting parts by air to support final pre-production builds. (Normal mode is to be by sea).
• Balance of parts have been sourced in the US and viewed as low risk.

Recent Disruption Root Cause Analysis:
The most recent supply disruptions were result of:
- Transportation failure (flooding in Arkansas),
- Supplier in Ohio who refused to ship due to financial constraints
- Supplier continues to short ship requirements with no notification .


1. Develop a simple matrix that identifies 8-10 risks that should be evaluated. Rate each risk element (high-medium-low).

2. Based on your matrix analysis, identify the three highest risks and propose countermeasures to lessen those 3 risk. Justify your selections. Leverage tools/strategies we discussed in class.

3. State your assumptions and references

3. Summarize your analysis with a one page “Executive Summary,” that Dave can use in his meeting on Monday with the Rob and his manufacturing leadership.

Answer rating: 100% (QA)

Risk Matrix for Premium A Product Launch Risk Impact Probability Risk Rating Supplier capacity constraints High Medium High Transportation disruptions High Low Medium Financial instability of suppliers High Medium High Lack of advanced warning from suppliers High Medium High Dependence on nonUS based suppliers High High High Labor disputes with Canadian suppliers Medium Low Low Difficulty in sourcing computer processors Medium Low Low Inefficient sourcing strategy pay on ship Medium Medium Medium Limited buffer inventory at manufacturing plant Low High Medium The three highest risks identified in the matrix are Supplier capacity constraints This risk is rated as high due to the high impact it has on production and the medium probability of it occurring To mitigate this risk we can diversify our supplier base by adding more suppliers or finding alternative sources for the same parts We can also establish a closer working relationship with our current suppliers and have regular communication to ensure they can meet our demands Dependence on nonUS based suppliers This risk is rated as high due to the high impact it has on production and the high probability of it occurring To mitigate this risk we can diversify our supplier base by adding more suppliers or finding alternative sources for the same parts We can also establish a closer working relationship with our current suppliers and have regular communication to ensure they can meet our demands This can also be mitigated by implementing hedging strategies like forward contracts options and futures to protect against currency fluctuations Financial instability of suppliers This risk is rated as high due to the high impact it has on production and the medium probability of it occurring To mitigate this risk we can diversify our supplier base by adding more suppliers or finding alternative sources for the same parts We can also establish a closer working relationship with our current suppliers and have regular communication to ensure they can meet our demands We can also implement a supplier rating system to evaluate the financial stability of our suppliers and take appropriate action if necessary Assumptions The production plan and manufacturing request provided in the scenario is accurate and uptodate The current sourcing strategy of pay on ship with a 3day buffer at the manufacturing plant is the current standard in the company The analysis of supplier ... View the full answer