Cj Industries and Heavey Pumps – Discussion Questions

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CJ Industries and Heavey Pumps – Discussion Questions 1. What are all the issues here, from both CJI’s and Heavey’s perspectives, that need to be researched by Mr. Ashby?
CJ Industries (CJI)
The first issue presented for CJ Industries was its contract with Great Lakes. Though CJI had sufficient excess capacity to ramp up production on the parts to be supplied in the Great Lakes’ contract, they were not sure about the ability or willingness of Heavey Pumps to increase their production of the bilge pumps. The problem is that CJ Industries had signed the contract with Great Lakes prior to any discussions about ramping up production with Heavey Pumps.

The next issue for CJ Industries was whether or not Heavey Pumps could guarantee
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The question is why they decided not to make the pumps in-house. The case states that to make this pump, CJI would need to hire three additional employees suggesting they lack may lack the knowledge specific to its design, thus, the disadvantage will be a heavy learning curve over the nine months remaining.
Also, CJ Industries would need to clear out space suggesting there may not be enough, currently. The disadvantage here is that it may take awhile to clear out the necessary space. Overall, the main advantage would be more control of production, timing, pricing, etc.
Option 3 – consider one of the other suppliers. It never hurts to network to other suppliers. Getting a bid quote or other recommendation is not of no value, regardless. The advantage would be discovering who the competitors are and what they are capable of doing. On the other hand, CJI has a nine month time frame and replacing Heavey Pumps may be problematic.
Option 4 – use some combination of the alternatives. This can be used as a backup plan in the event Heavey Pumps is unable to meet a particular aspect of supply and demand, i.e. unable to supply 50 pumps per month or unable to keep relevantly low costs. For example, having another supplier may not be a bad idea especially to better ensure availability. Or, CJ Industries can continue their relationship with Heavey Pumps while developing their in-house capabilities until they are able to adequately make the pumps. In any case,