Case: Custom Fabricators. Inc. – from Lean Manufacturing Partner to

776 Words Jul 4th, 2008 4 Pages
1. How does Ben Lawson’s Custom Fabricators, Inc., create value for
Custom Fabricators Inc. has a very companionable relationship to Orleans. Orleans Elevator is a subsidiary of United Technologies and provides Custom Fabricators Inc. with a monthly schedule of their products and these are produced by order and delivered either to the nearby Orleans plant site or directly to the construction location. Custom Fabricators Inc. creates value for Orleans by delivering quality and great service with the speed, reliability and flexibility of the manufactured items they produce. Most of the manufacturing business is done with Orleans. Because of Orleans purchasing the raw
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Orleans seems to feel that the lower cost of labor in Mexico will substantially decrease their raw material supply costs. A company called “FreeMarkets” should help them to obtain contract bids from a variety of Mexican suppliers. This event concerns the CEO of Custom Fabricators Inc. because if the quality of products provided from Mexican suppliers is not the same then it will take a week or longer to get replacement materials. Currently it only takes about some hours to a couple days to correct quality problems because of the closeness of the current raw material suppliers. By purchasing raw materials from a distant location, Custom Fabricators realizes that this could have an impact on product quality and punctuality and this would drastically increase the risk of manufacturing elevator products for Orleans. 3. Have Orleans’ priorities changed?
It is obvious to see that Orleans has changed priorities. They are trying to change their base from high quality and reliable products to a cheaper price based strategy. This has brought
Ben to be concerned in the security of his business relationship with the company. 4. Should Ben change his business model?
Ben is realizing that by outsourcing raw materials, Orleans strategy could also include outsourcing manufacturing to other locations. Custom Fabricators should reevaluate
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