De Havilland Inc

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The repose of this paper is to help guide Tomato through the analysis phase to ensure the viability of Maroon and to prepare for submission to the Supplier Selection Board. The two main issues in the case are whether Marten’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 Maroon, 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 Maroon to the USB as well as elect a BAT AN for protection or continue with using Dollar as their prime vendor. It is recommended that De Havilland select Maroon and go with Lakeside Industries as a BATAAN, given that they currently do business with the company. It is also recommended that an inspection and audit of the financial be set up by Tomato. To control the situation, Tomato will conduct a clarification meeting 14 days after to review the outstanding issues with Maroon and any irregularities found during the audit or inspection.

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If either party refuses, the bid will be closed and Lakeside Industries will be noninsured for the contract. If no issues exist, Maroon will be recommended to the USB. Identifying the issue Dollar Plastics has been supplying our flap shrouds and doors for the series I’ 100 and are not covered by any contract; but the flap shrouds for the AAA are supplied under contract that will end at the end Of 1993. Industries supplies all the equipment bay doors with no specific con place.

Dollar is not lowering their pricing so we have to look to late we can stay with Dollar or find a new supplier. The Bill of materials costs represented 60-65 percent of De Havilland total manufacturer So the fact that Maroon has offered the lowest prices over Dollar, if positive direction to move in. Tomato has to analyze the firm and the determine if Maroon was sufficiently stable to be able to service the in the long run and if the prices for parts are realistic and are not jus buy the contract.

During this stage, company was Dash 100 & Series 300 aircraft. Series 300 aircraft was sharing many parts 100 aircrafts. Acquiring De Havilland by Bombardier (with 51%share company) brought many changes in overall supply chain policies an’ organizational structure of DO. Exhibit 1 reflects company Sourcing Exhibits 2 shows, DO new organizational structure. Among other poll suppliers were asked to confirm 25% discount across the board Witt fixed price commitment. Two major parts costs of Dash 8 series 1 00 (Flap shrouds & Equipment bay doors) represent 60-65% of overall c airplane manufacturing cost.

These parts were being sourced from ‘ Plastics “a Montreal based supplier. ; DO had limited but good for worth of inventory of these parts and now planning to secure, supply for future but under the guidelines of new policies and rules. ; Doll refused to reduce the cost by 25% and confirming any commitment the cost for next 5 years. As an alternate to Dollar, DO BBS (Bided selection Board) had prepared and sent out RFC (request for quota potential new suppliers for these parts.

While preparing RFC, they k following objectives into considerations. 1 past purchase trend and pattern of the parts. 2. Based on reviews and economical situations, forecast future purr trend. 3. Based on company new policies, overall economic condition estimated new cost of the parts. After all sort of screening and bid process, a list of nine potential suppliers was finalized (Exhibit 3). OLL nine supplier , Maroon Enterprises Inc. A subdivision of British based