Fisher & Paykel Limited Case

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Executive Summary To: Purchasing Manager, Fisher & Paykel Limited From: Alan Day, Fisher & Paykel Limited Subject: Solutions to Shortages of Evaporator Pad Covers Issue: As you know, the shortages of evaporator pad covers from the local supplier, Walton, threatened extremely to close down the refrigerator assembly line which led to longer lead time for customers and to affect the cost. The potential risks would make Fisher & Paykel Limited (F&P) lose the leading position if the issues had no changes. I have analyzed the work done thus and would like to propose the following as our new Problem Statement for this requirement. “How can F&P find the workable and cost-effective solutions to solve the supply problems of evaporator pad covers to increase customer satisfaction and to make profit?” We considered various other options to conclude this assignment, as follows: * Labelling on the bins with color or color code was the immediate powerful solution to increase the productivity at Walton. * Procurement and outsourcing pad covers * Hold 2 days Safety Stock at Walton by using VMI method * Reengineering to standardize the cover blanks with the same size. * Negotiation with Walton. Although these were viable, we feel that decentralized procurement strategy will provide the best strategic solution for F&P local plant, while also achieving a much better long-term solution. We could start searching new suppliers so that we could reduce the reliance on Walton. Of course, we still need to keep long term relationship with Walton for future ad-hoc. The decentralized purchasing department should keep good communication with the centralized parts. Coordination and cooperation were very important. Both the procurement strategies must meet the F&P’s business goals. As this is a strategic plan, it must take a long time for top

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