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Case 15-1: Rocky Plains Brewing Ltd.

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Case 15-1: Rocky Plains Brewing Ltd.

Situation Analysis/Size-up

• Mike Pearson, packaging materials manager for Rocky Plains Brewery Ltd., notified Gerald Gilpin, owner and president of Gilpin Printing Inc., that Rocky Plains will be terminating its contract and expected a contractual rebate of $690,000 – Gerald refused and demanded $4.4 million wire transfer in order to continue supply
• Contract expires on May 30 – decision has been made to test the market for better pricing, materials, and print methods – major concern for ongoing financial problems at Gilpin
• RFP for a 3 year contract were sent – analysis for proposals included financial stability, protection for raw materials price increase, currency and foreign exchange exposure, freight costs, print run sizes, and label cutting options – narrowed two suppliers: Gilpin and Stiles Printing
• Second proposal from Gilpin was presented and confirmed that he intended to sell the business
• Long-term relationship with Gilpin has lead to concern that losing the contract may push the company into bankruptcy – under current circumstances, recommended to award the label supply contract to Stiles based on better pricing and financial stability – Gilpin threatening to cut supply (some sort of blackmail)

Problem Statement

• How to resolve supply problem and avoid production interruption due to supplier withholding shipments

Analysis

• S – One of the most recognized beer brands in the US – producing products of exceptional quality, supported by high standards of raw materials, proven brewing methods, rigorous production process
W – Ending of a long-standing relationship with supplier, Gilpin
O – Opportunity to have supplier with better pricing, materials, and print methods
T – Label shortage due to termination of contract and transition to new supplier

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