Platinum Box - Supplier Selection
Contents
Executive Summary 2 Issue Identification 3 Environmental and Root Cause Analysis 5 Alternatives 6 Recommendations & Implementation 7 Exhibits 8
Executive Summary
Platinum Box Ltd. is at a strategic juncture; it has enjoyed a phase of consistent growth over the last few years, and built on this growth is planning to expand operations to take advantage of new markets in the USA. Critically, the equipment (printing presses) that have enabled Platinum’s growth and success are approaching the end of their life-cycles, as evident in doubling of their maintenance costs over the last two years. If this equipment is not replaced in the near future, Platinum cannot expect to expand production or to effectively push into new markets.
There are three potential suppliers available to Platinum to replace the existing machinery; JabaKing, the existing supplier, who enjoys a very close strategic relationship with Platinum, Merakuri – a supplier out of South Korea who offers cutting edge technology, and Pnutype – a relatively new supplier in the market who offers preferable financing options, service and superior technology.
In order to arrive at a decision on choice of supplier (or mix of suppliers) I have taken the approach of a Total Cost Analysis, which explores all costs associated with the purchase of the equipment in addition to examining which option might bests meet the strategic business needs of Platinum, while best mitigating the inherent risks to the business – like lost productivity due to reliability issues. Examining the total cost of ownership presents a better understanding of the impact that the selection of machinery might have on the business, and in this case revealed that while JabaKing’s price and financing was cheaper than its competitors, that their total cost of ownership was substantially higher. In addition to the total cost of ownership, consideration was given which supplier’s offering would most likely enable
Executive Summary 2 Issue Identification 3 Environmental and Root Cause Analysis 5 Alternatives 6 Recommendations & Implementation 7 Exhibits 8
Executive Summary
Platinum Box Ltd. is at a strategic juncture; it has enjoyed a phase of consistent growth over the last few years, and built on this growth is planning to expand operations to take advantage of new markets in the USA. Critically, the equipment (printing presses) that have enabled Platinum’s growth and success are approaching the end of their life-cycles, as evident in doubling of their maintenance costs over the last two years. If this equipment is not replaced in the near future, Platinum cannot expect to expand production or to effectively push into new markets.
There are three potential suppliers available to Platinum to replace the existing machinery; JabaKing, the existing supplier, who enjoys a very close strategic relationship with Platinum, Merakuri – a supplier out of South Korea who offers cutting edge technology, and Pnutype – a relatively new supplier in the market who offers preferable financing options, service and superior technology.
In order to arrive at a decision on choice of supplier (or mix of suppliers) I have taken the approach of a Total Cost Analysis, which explores all costs associated with the purchase of the equipment in addition to examining which option might bests meet the strategic business needs of Platinum, while best mitigating the inherent risks to the business – like lost productivity due to reliability issues. Examining the total cost of ownership presents a better understanding of the impact that the selection of machinery might have on the business, and in this case revealed that while JabaKing’s price and financing was cheaper than its competitors, that their total cost of ownership was substantially higher. In addition to the total cost of ownership, consideration was given which supplier’s offering would most likely enable