Stryker Case

Stryker Case Assignment

Stryker Corporation, founded by Dr. Homer H. Stryker in 1941, now has more than 20000 employees over the world. “It was a leading provider of specialty medical and surgical products with 2002 revenues and operating profits of $3.0 billion and $507 million, respectively.”

In late May 2003, executives in this company were thinking about in-sourcing PCBs. PCBs are printed circuit boards which were used in almost all of the Instruments’ key products and platforms. The reason for them to change in their sourcing strategy for PCBs is the performance of the contract manufacturers had bad quality, delivery and responsiveness. This is because these manufacturers tended to operate on thin margins with scant capital, and a financially weak supplier was less reliable.

The manufacturing manager of Stryker Corporation got three options to improve this situation.

“Option 1: It was to maintain the current basic sourcing policy for PCBs, but with important modifications.

Option 2: It would boost reliability by establishing a partnership with a single supplier, one of the current group of contract manufactures.

Option 3: It was for Stryker Instruments to manufacture its own PCBs in its own facility near company headquarters in Kalamazoo, Michigan.”

The benefits for option 1 are no capital outlay, to some extent can protect future against disruptions with lower cost, and flexibility. But the risk is instability in quality, cost, delivery and responsiveness. Compare with option 2, the benefits is that it can improve quality of the supplies by increasing business with the supplier. But the risk are the possibility of bankruptcy and weak financial performance of supplier, the sole supplier can strongly affect Stryker’s performance, and coordination problems. Compare with option 3, the benefits are that they would have better control the quality, delivery and cost; it would maintain the business stability; they could supply PCBs to other Stryker...