Muenster Pump

Case Name: Muenster Pump

I. Major Facts

A. Muenster Pump Company has manufactured high-quality agricultural pumps for over 40 years.

B. The company is the largest employer in a small city in Muenster.

C. Bob Dorf is the president of the firm and is the grandson of the Emil Dorf, the founder.

D. The company contains a foundry for casting pump housing and related items, providing all required pumping houses.

E. Bob’s cousin, Terry Dorf, was named purchase manager who tries to integrate world-class management in the small business.

F. L-1012 represents 60% of Muenster demand for cast housing. Muenster Pump Company spends $180 for producing L-1012 cast housing.

G. Union Foundry proposes Muenster Pump Company cast pump housing at attractive prices (L-1012 cast housing for $90). Delivery was promised within 120 days after receipt of the first order. Thereafter, delivery would be made within 60 days of receipt of the order. Minimum orders were established as 100 units. Other foundries sell it for $94 or $98.

H. Terry thinks about outsourcing the cast pump housings.

I. Terry’s uncle Ned opposes the changes stating that more is involved than just reducing cost.

II. Major Problems

A. Should Muenster consider the political and human costs?

B. Should Muenster make or outsource the case housing?

III. Possible Solutions/Alternatives

A. Muenster should conduct a make or buy analysis that encompasses more than cost and considers the political and human cost.

1. Advantages.

a.) Muenster can gather information as it pertains to the Strengths, Weaknesses, Opportunities, and Threats to the company. (SWOT analysis)

b.) Muenster can gather information on the potential Political, Economic, Social and Technological impacts of outsourcing the cast pump housings. (PEST analysis).

2. Disadvantages.

a.) Muenster primary focus isn’t reducing...