De Havilland Case Study

De Havilland Case Study Analysis

Table of Contents

Executive Summary…………………………………………………………………….….3

Issue Identification……………………………...………………………………….………3

Environmental and Root Cause Analysis…………………………………….……………4

Alternatives and Options………………………………………………….……………….5

Recommendations…………………………………………………………………………6

Implementation…………………………………………………………….………………7

Monitor and Control……………………………………………………………………….8

Executive Summary

To Whom It May Concern,

Through my findings and research, I have come to the conclusion that we should award the contract to Marton, pending a meeting/negotiation. It is imperative that we lower our manufacturing costs because it is holding as back far too much in order to maximize our profitability. Our current supplier, Dollard Plastics Marton has prices that are far too high and they have already rejected a request for a discount. They have also offered no alternatives or solutions to us that would persuade us to extend our current agreement. Based upon the bids that we have received from our RFQ, Marton appears to be the best choice at first glance, but there are a few underlying issues that I believe need to be sorted out before they are awarded the contract. If Marton does not wish to negotiate or an arrangement cannot be reached, it would be best to go to the next lowest bidders and negotiate pricing and terms with them. Our sole objective should not just be to get the cheapest contract, but to choose one that will benefit us in the long run where we are able to work with our supplier closely and allow both sides to benefit from this agreement.

Issue Identification

The biggest issue that de Havilland faces are that 60-65% of our total manufacturing cost is the result of the total parts cost of the Dash 8 airplane. This number is far too high and if we are able to lower this number, we will be able to achieve greater profits. When we approached Dollard for a 25% discount for the...