Erica Carson Case

Case 1-2: Erica Carson

Name: ________________
Group: ___A or B________
Date: ________________
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Situation: * Erica Carson is PM for Wesbank, a financial institution (note: You are Erica) * Reports to VP Supply * Unsolicited bid from Art Evans, Sales Rep. Killoran Inc. * 10% reduction on printing and mailing of checks * not current supplier * Westbank provides free checks at a cost of $8M per year * Current situation – 50% split suppliers, last 5 years * Supplier A prints and mails 50% checks, renewed contract 8 months ago * Supplier B prints and mails 50% checks, contract expires in 4 months * Each 2 year contract, good quality and service * Costs studied one year ago, determined pricing was fair BASIC ISSUES; (note - tie to elements from textbook)

1. Purchasing for a service organization.
2. The price, quality, delivery, service trade-off.
3. Supplier selection and splitting of business.
4. The purchase of services.
5. Treatment of unsolicited proposals from suppliers

Tasks: * What does Erica do? * Does Erica consider the bid? 10% savings = $800M * Status quo * What are alternatives? Need to weigh alternatives. * Complete cost-benefit analysis * Are checks really needed? * What is core competency of bank? * What is business imperative with checks? * What is company / VP Supply policy on unsolicited bids? * Does this bid and subsequent action fit business goals and objectives?

SUGGESTED QUESTIONS FOR DISCUSSION;

1. What importance is the check printing to the bank?
2. How would you do a cost analysis on a check printing order?
3. How would you evaluate a supplier of check printing for this bank?
4. How many suppliers are desirable for check printing?