Maria Perez, senior VP of supply chain management at High Mountain Inc. (HM), pe
ID: 368220 • Letter: M
Question
Maria Perez, senior VP of supply chain management at High Mountain Inc. (HM), peered at the traffic, pondering the ramifications of the formal letter of invitation that she had read three weeks ago. The letter had been sent from HM’s most important customer, Agilic Inc., and extended a unique opportunity to become one of only a few “Partner” suppliers to Agilic. The letter pointed out that the “Partner designation represents the apex of Agilic / supplier relationships and is awarded exclusively to carefully selected suppliers with whom our Company shares common objectives and a commitment to a long-term, mutually beneficial interaction geared to meeting our customers’ needs.” Agilic had given a deadline for a final decision, which was tomorrow. Maria couldn’t help but wonder whether HM was ready for the time and resource commitments required to participate in such a tightly coupled relationship.
As Maria considered what a “yes” or “no” decision might mean, she reflected on the changes that had taken place at HM over the past 24 months. Just a little over 2 years previously, HM had found itself perilously close to financial ruin. Quality levels were suspect, productivity was below industry standard, and it seemed that HM couldn’t deliver product to key customers on time if its future depended on it (which it did). The only thing standing between HM and bankruptcy was a set of 7 patents that protected HM’s key processes and product technologies, which unfortunately were set to expire within 18 months.
This spurred a new determination to improve HM’s customer service capabilities. Maria and her team had approached HM’s top 10 most important customers in an attempt to find out just what constituted world-class service. After evaluating the customer feedback, HM embarked on a total quality campaign coupled a with a tailored-logistics initiative. However, Maria’s available budget and human resources were limited from the previous years’ financial hit. She was forced to cut-corners during the process.
For reasons she couldn’t explain, the new campaign and initiative seemed to benefit only the business with Agilic. Quality defects for had dropped to an average of 250 parts per million, delivery performance had improved to almost 98 percent on time, and productivity had increased by over 15 percent for product lines associated with Agilic. Further, sales for the Agilic product line had increased by almost 30 percent in the past year. Yet, results continued to spiral downward with the other 9 of the most important customers.
The next morning, Maria scoured the packet that had come with the letter to identify Agilic’s expectations of HM. She highlighted the key points stating that “Partner” suppliers must:
• Work with Agilic toward continuous improvement.
• Share information regarding cost, technology, and resources.
• Share real-time quality.
• Use cost-reduction programs to reduce costs 3 percent per year.
• Participate in quarterly “Business Performance Reviews.”
• Attend Agilic’s annual supplier conference.
• Be early participants in the new product design process.
• Commit, and receive, technical, production, and financial support to achieve shared goals.
• Integrate planning and production schedules to reduce lead times.
• Share technology to create unique product/service offerings.
• Share information about business opportunities.
• Be sole sources for vital components.
• Collaborate on the following programs: vendor-managed inventory, supplier-integrated manufacturing, and co-located engineering personnel.
Reviewing the list of expectations created a sense of concern deep in Maria’s gut – she simply was not confident that HM could live up to the challenges. Communicating information real-time, sharing technology, integrating planning and production schedules, and dedicating resources to a customer’s operations were not something HM was accustomed to doing. Recent discussions with other areas of HM created even more angst for Maria: Sales couldn’t believe Maria was hesitant about accepting the offer; Marketing argued this could provide more focus for HM as well as drive innovation; Legal raised intellectual property concerns suggesting patents and contracts could provide only so much protection; Logistics and Production seemed completely unconcerned about it and didn’t think it would affect them in any way.
Nevertheless, Maria saw tremendous opportunity to grow HM’s capabilities and sales by working closely with Agilic. She wondered whether the benefits of “partner” status outweighed the costs and risks.
Case write-up evaluation – Organize your case write-up using the following 1-5 headings
1. Problem Statement Definition : How clearly and concisely have you identified the problem moving forward? Is it precise? A problem statement identifies the area or areas where there are issues that need to be addressed, such as inefficiencies, missed opportunities, following through on a vision, unacceptable performance, or potential concerns they could face in the future. Did you identify a true problem and not just symptoms? The problem may not be explicitly spelled out in the case.
2. Situation Analysis : Did you summarize the key factors most relevant to the case? Do not simply summarize the case. Did you incorporate relevant concepts we discussed? Does the analysis provide the necessary background to lead to defining a reasonable recommendation to the problem?
3. Recommendation : Did you justify and support your recommended course of action? Is it supported by evidence? Did you critically evaluate the recommendation in terms of pros and cons? Does the recommendation make sense given your problem statement and situation analysis? Is it decisive?
5. Writing Quality :Was the paper easy to read, well organized with proper headings (using headings 1-4 offered here), and without grammar or spelling errors? Did the paper stay within the 2-page limit?
Explanation / Answer
Case write-up evaluation:
Problem Statement Definition:
The problem statement utters that there are two companies one is High Mountain Inc. (HM) and another is Agilic Inc. Agilic Inc. is the customer of HM. The Agilic. Inc. wants to become a Partner supplier of HM. But the HM company’s not in a position to handle the new partnership relationship according the past record of it. The VP have less time to think about and work over it. Also, it is the matter of concern that weather the Agilic as a partner / Supplier will make the status of the HM.
Situation Analysis:
The situation here is with the VP is instant decision making. Another case here is that how to convince the HM management to work with the Agilic Inc. which forms the new relationship. The concern about the business is there as previously it was running very slowly. She has another situation in addition to this is Reply in either Yes or No of the company. Which option should take is very much important.
Recommendation:
The company HM should work with the Agilic Inc as this would be the wonderful deal. It helps to grow with the Agilic Inc. It helps to increase the relationships with the customers of the company. As the partner /supplier of the HM. The VP should boost the HM overall profit. A decision can change the companies working.
Writing Quality:
The Writing Quality should be very clear and concise. The case shows the clear-cut idea for the Agilic Inc. and it also gives the brief introduction about the topic which is mentioned already. Agilic Inc. is very clear objectives and goals which was send to the HM company.