Sysco Decsion Case

Sysco Negotiation Case

Gerald Stecklen is a buyer for Sysco. He is currently responsible for developing a negotiating plan and strategy for the purchase of a component called New Prod for a newly designed product. Gerald has, after evaluating the quotations submitted by potential suppliers, decided to pursue purchase negotiations with Technutronics. He was given the unit price, tooling costs, and estimated transportation charges presented in Exhibit 2B. He then calculated the cost per unit for each supplier (using 200,000 units). The cost per unit is calculated in the chart listed in figure one.

Figure 1

Sysco sent out an RFQ to seven suppliers and only two did not provide quotations to Sysco. They are several reasons why Bauer Manufacturing and Avicraft, Inc. did not respond. Some of these reasons were possibly; they did not have enough capacity to meet Sysco’s demand, they could have had conflicts with their production schedule and Sysco’s delivery requests, they could not meet Sysco’s New Prod specifications, they may have not had current capability to produce New Prod for various reasons. Their technology may not have been sufficient enough and there may have been a conflict of interest due to competing business or relationships with competing businesses.

In preparing for the negotiations with Technutronics, price is not the only option for Gerald to consider here. Sysco also has a tight and predetermined production schedule, and they expect nothing less than high quality. Quality control measures are a vital concern for Gerald as well. All of Sysco’s products held to high quality parameters and there will be no exceptions for New Prod. Technutronics and Tyler Manufacturing both have a proven record of concrete performance assessments for quality and delivery. Therefore, Sysco will continue to expect the same from them. Since this is a new product we need to ensure that Technutronics is going to be able to keep its production consistency...