Logistics Case Study
Case 1: Integrated Logistics for DEP/GARD Tom Lippet, sales representative for DuPont Engineering Polymers (DEP), felt uneasy as he drove to his appointment at GARD (Automotive Manufacturing (GARD). GARD is one of DEP’s biggest customers. In the past, sales deals with GARD had proceeded smoothly. Oftentimes competitors were not even invited to bid on the GARD business. Mike O’Leary, purchasing agent at GARD, claimed that was because no competitor could match DEP’s product quality. But this contract negotiation was different. Several weeks before the contract renewal talks began, O’Leary had announced his plan to retire in 6 months. GARD management quickly promoted Richard Binish as O’Leary’s successor.
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But there will be some changes by next year.” “Such as?” “Well, you remember when I started buying from DEP? You were the leaders, no question about it. Now I knew some other suppliers had moved up since then but I figured, hey, if it ain’t broke don’t fix it! As long as DEP’s price was in line, I knew I wouldn’t have any troubles with manufacturing. Less headaches for me. Now it turns out that Binish has some other ideas about purchasing. I can tell you for a fact that he’s sampled several lots of DEP feedstock. He’s also invited other potential suppliers to submit samples. The long and short of it is that there’s not much difference between DEP and the competition in terms of product.” “I still don’t clearly understand the problem, Mike.” “In Binish’s terms, product quality merely becomes a ‘qualifying criterion.’ If everyone’s product is comparable, especially in something such as polymer feedstock, how do you distinguish yourself? Binish claims companies will need to demonstrate something called ‘order winning criteria’ to get our business in the future.” “I still don’t see a problem. We have our reviews with GARD every year. Our service performance has always been found to be acceptable.” “True. But acceptable according to my guidelines. Let me throw a number at you. On average GARD schedules delivery of DEP shipments 10 business days from date