Deirdre Collins, buyer-expediter for Global Heat Exchangers Inc. (GHE), was faced with an important purchasing decision. A large new client had just signed for a substantial order, and production was scheduled to begin in a couple of days. Unfortunately, the original pricing of the project was now being threatened because a GHE supplier had just raised its prices considerably.
Company Information. Global Heat Exchangers Inc. (GHE) was established in 1920 and had since established a strong reputation as a leading designer and manufacturer of a wide range of specialized heat transfer equipment. Their refined manufacturing process had enabled GHE's heat exchange systems to find applications in a wide variety of industries, including pulp and paper, power generation, electrical transmission and distribution, and other process-related industries. Some of these systems were known to last more than 20 years, so long-lasting relationships in the industry were normal.
GHE had operated as a distinct entity under ' various ownerships during its evolution and maintained a leadership position in the industry. In 1991, GHE was acquired by Zest Industries, and became a member of the Zest Heat Transfer Group. Zest was a large privately held corporation in the United States with more than 12,000 employees.
GHE's facility was divided into two principal areas: (1) the manufacturing facility, and (2) the office building. The manufacturing building consisted of fabrication, machine shop, assembly, testing, and research and development areas, totaling approximately 94,000 square feet with 80 employees. The office building consisted of sales, purchasing, engineering, estimating group, accounting, and management, totaling approximately 9,000 square feet with 60 employees. GHE's renowned international reputation was supported by various sales offices across North America as well as foreign offices in Australia, China, Pakistan, Sweden, and the