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Fisher & Paykel

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Submitted By avro5
Words 978
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Organization Background
Fisher & Paykel Ltd. (F&P) Located in Auckland, New Zealand was the largest home appliance manufacturer of major appliances in the country with eight operating divisions. It’s major appliance sales amount to $135,000,000 with total sales of $270,000,000 annually including annual export sales and royalty income of $36,000,000.
The Laundry Division of F&P has spent two years developing a new washing machine with a projected annual production level of 75,000 to 100,000 and 50,000 for the first full year of production to start the beginning of next April.
Defining the issue
The key concerns are: 1. Getting the best quality, quantity, price and service for the required parts while adhering to the New Zealand’s importing licensing policies 2. Coming up with clear parts sourcing decisions and direction quickly
Due to the automated production process planned for the new machines, new plastic cable ties with new specifications will have to be produced as none of the existing ties suppliers actually have them in stock. Each machine will require 45 plastic clips with 6 different part numbers for a total of 4,500,000 annually given the projected production of 100,000 machines a year.
With the lead times involved before the first production run in April, F& P must resolve the 2 key concerns above as soon as possible.
Analyzing the Case Data
There are 4 possible plastic clip suppliers:
Olson Plastics: * Quoted 4 out of the 6 items quoted were priced higher than other suppliers * In previous orders their quality has not been as good as other suppliers * Olson seems to have capacity problems, even with long lead times deliveries are unreliable * This Company would meet all of New Zealand’s agent licensing laws * As a New Zealand manufacturer Olson would not be aligned with F&P’s goal of using more

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