Case 5-3 Brent Industries Wynne, Jake, Karolina

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Case 5-3 Brent Industries By: Wynne, Jake and Karolina
Case Background Brent Industries: supplier of OEMs for motorhome industry Sonal Doshi: General Manager of Brent Industries Mike Guthrie: Process Engineer at Brent Industries Richard Chen: Sales Manager at Empey Electronics Len Firkus: Director of the supply chain at Brent Industries Potential of insourcing the XC112 Production rather than outsourcing from Empey Electronics
Proposal Potential of insourcing the XC112 Production rather than outsourcing from Empey Electronics. XC112 is an important component needed for BR- ODS1 Recommended by Mike Guthrie (Process engineer)
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Proposal Analysis Cost analysis done by Mike showed an annual savings of about $850,000 based on current volume Current costs for XC112 is $240.53 per unit Raw material costs for insourcing is $128.42 (estimated) Direct labor costs for insourcing is $20.16 (estimated) Plant overhead from insourcing is $36 (estimated) Overall costs will be saved if proposal is taken
Meeting Richard Chen Be transparent with Richard on current relationship and potential shift in future (based on proposal decision) 1 Bring up the potential of insourcing but also maintain the supplier relationship 2 Assure open communication following potential changes in company so Empey is not left in the dark 3 Approach the meeting with openness, transparency and focus on future potential collaboration 4
Further Actions Run further analysis on cost savings to see whether the analysis done earlier is completely accurate. Assess the potential consequences of the proposal such as inexperience, market shifts and potential supplier loss (Empey) Bring in consultants to have another point of view on the proposal, more perspectives can open potential opportunities Assess the hidden costs such as management training, shift of workflow and potential efficiency issues if proposal is taken
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