Agile Electric-Quality Issues in a Global Supply Chain.Pdf

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S w W12056 AGILE ELECTRIC: QUALITY ISSUES IN A GLOBAL SUPPLY CHAIN Dhruv Dar, Sanjay Kumar and Vijay Aggarwal wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of…show more content…
Smith: How can we go with Agile, they have no experience in manufacturing this critical product. Arthur: I know, Tom. But look at it this way. Agile is one of our most successful overseas suppliers. They have a record of just 70 PPM [parts per million] defects and no delivery defaults in the last three years of supply for all their parts. I am sure they will be able to develop this part successfully. And we will be saving the corporation a decent amount by buying from them in these tough times — Agile is asking US$7.20 per part whereas our local supplier will cost us US$16. Further, as this is a small sub-assembly, the logistics costs will not be more than US$0.80 per piece. Smith enquired whether or not Automek engineers would work with Agile for the development, as done earlier. Arthur mentioned that due to the tight financial situation this might not be possible: But hey, come to think of it, haven’t we given enough support to Agile already? Our engineers have been virtually camping there for the last three years working on new products. I am confident that Agile must have developed sufficient skills by now to develop their processes inhouse. Let us try them out this time, I am sure they will be very successful. And anyway, you will be sending your Supplier Quality engineers to assess the suppliers. If there is anything grossly wrong they will definitely

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