Essay about Kettering Industries

1569 Words Sep 27th, 2012 7 Pages
Case 12-3: Kettering Industries

Supply Management

Group 1 Immediate Issue:
Victoria Jackson, the supply manager of Kettering Industries Inc, must select the most suitable glass supplier(s) for KII.
Basic Issues:
• Limited storage space
• Finding a supplier willing to stock inventory
• Increasing raw material inventory turns
• Flexibility with suppliers to adjust purchase order quantities
• Implementing the Vendor Certification Program
• Planning for growth of low energy glass windows sales
• Ranking each of the potential suppliers
• Selection of single or multiple sourcing supplier
• Negotiate a flexible long term supplier contract
• Deciding between manufacturer or distributor
• Selecting a supplier
…show more content…
Supplier Alternatives:
The first option is to sign a contract with Ross Industries. The key advantage of Ross is they have worked with Kettering for 20 years providing excellent service. Since Kettering has previously worked with Ross, they can expect on time delivery and may be able to easily negotiate contract terms. KII is expecting production in low energy windows to double over the next five years. KII must select a supplier with quality windows that will pass their newly implemented Vendor Certification Program. The main disadvantage of Ross Industries is their low energy glass does not pass KII’s standards and therefore, would not be able to supply low energy glass. Another disadvantage is the lead time is one week. KII has a delivery goal to customers of 10 days from the order date. With lead time being one week, KII may not be able to achieve their goal to customers. Furthermore, supply managers prefer to purchase from local sources. Being 150 miles away from Dayton, Ross would not be considered local. A local source is more dependable. Also, since KII is located in the community, the company owes it to the community to find a local supplier. Finally, KII has a very limited storage space. To maintain the lower price of clear glass, KII would have to purchase a minimum of 12 blocks. KII may not have storage room for 12 blocks every time they order, which would result in paying a higher price.

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