Case - Swisher System Corporation

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I. Company Background:

Swisher Systems Corporation (SSC) is an industrial heating company which was established in 1949. SSC is an innovator of flexible heating products, especially with its knit and braided heating element. The heating element is multi-stranded resistance wire that is knit and braided with fibreglass and is the base technology for almost all SSC products.

SSC is known in the industry as being the highest quality flexible heat supplier which produces control devices and heating cable. SSC’s competitive advantage is on the quality products which maintains higher and safer temperature that are more flexible than their competitors or other products in the market.

II. Facts of the Case:

A. Mike Watkins
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Financial stability

According to Mr. Watkins, his relationship to supplier representatives was “personal”, though he claims that he is still stern and fair in negotiation which he says can be achieved with honesty and integrity.

On a daily basis, Mr. Watkins sends out an estimate of fifty (50) purchase orders to suppliers. Further, he bases his OEM purchase decisions on the following:
1. MRP action report
The MRP report is usually eight (8) to ten (10) pages generated from the SIM4500. Mr. Watkins manually reads this report and determines his next step based on the system report actions which indicates as follows:
a. Cancel – means no purchase is required;
b. Purchase Requisition – means a purchase order (PO) should be placed;
c. Slide – means purchase should be pushed back;
d. Short – means no open orders, parts are needed and suggested order date is due.

Moreover, a Material Analysis Report with an estimated eighty (80) to one-hundred (100) pages is printed and manually read by Mr. Watkins, where he will sort out requirements then create POs for each supplier. It is also noteworthy to mention that according to Mr. Watkins, SIM4500 has its limits as to listing the primary and secondary suppliers, creating problems later. Thus, he controls which supplier should get the business, not the computer.

Lastly, once manual analysis is done, he prioritizes which suppliers should be called first. Mr. Watkins will manually phone, fax or email

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