De Havilland

De Havilland Inc

Maulik Patel

Maulik.patel@westburne.ca

Module -2

Executive Summary

During a recent discussion with De Havilland's current vendor, Dollard, they were asked to provide a discount of 25% on part prices. When Dollard refused, Kim Tomar was tasked with selecting a new vendor through the RFQ process to achieve these savings as well as achive below target.

• 25% discount on purchases across the board

• Establishing 5 year fixed cost contract with suppliers

• Consolidation of sources / reduction of suppliers

Out of the nine bids, Marton Enterprises came in with the lowest bid. The purpose of this paper is to help guide Tomar through the analysis phase to ensure the viability of Marton and to prepare for submission to the Supplier Selection Board. 

The two main issues in the case are whether Marton's pricing is realistic and if they are stable and viable enough to enter into a long term contract. There are a number of concerning issues affecting the analysis of Marton, specifically their pricing structure, quality of products, absence of financial information, and their relationship with Boeing. 

Two alternatives are presented where De Havilland can recommend Marton to the SSB as well as select a BATNA for protection or continue with using Dollard as their prime vendor. 

It is recommended that De Havilland select Marton and go with Lakeside Industries as a BATNA, given that they currently do business with the company. It is also recommended that an inspection and audit of the financials be set up by Tomar. To control the situation, Tomar will conduct a clarification meeting 14 days after to review the outstanding issues with Marton and any irregularities found during the audit or inspection. If either party refuses, the bid will be closed and Lakeside Industries will be considered for the contract. If no issues exist, Marton will be recommended to the SSB.

Identifying the issue

Dollard Plastics has been supplying our flap shrouds and doors...