De Havilland Case Study

Executive Summary

De Havilland has a great response to their request for quotation for flaps and bay doors for their Dash 8 aircraft. Part cost covers 60-65% of the manufacturing cost and current supplier is well known to be at the high of its prices. De Havilland wishes to do a competitive bidding process to ensure that they get the best value per cost incurred. They also wish to enter higher level of supplier- customer relationship --- long term relationship. We will pursue the competitive bidding process using the current purchasing cycle of De Havilland. We will be using Wheelers’ framework for the analysis. On this note, we would like the quotation be compared apples to apples. We are asking for the total value including freight, tariff and custom brokerage cost in the analysis. We will be including some subjective inputs in the analysis such vendor visit assessment, feedbacks from their other clients and their overall customer service feel. All data will be compiled; the nine bidders will be shortlisted into three bidders. The 3 bidders are required to make a presentation to the team justifying why they should be selected.

Looking back on the collated data and feedback from the presentation, we will select the bidder. With respect to risk assessment, we will award the winner 85% of the business and 15% for the runner up. Contract detailing the service level agreement will be drafted and agreed upon by both parties. KPI’s will be monitored every month and a quarterly business review will be conducted.

Statement of operating environment

As Kim Tomar, I have to make a recommendation based on my assessment of each of the nine firms that responded to De Havilland request for quotation.

Statement of strategic intention

My goal is to be able to consider the overall value of each company to be able to assist decision makers and stakeholder in the interest of establishing a long term and co-operative contracts with suppliers. For the analysis, we will be using Wheeler’s framework.

List of Issues with impact analysis

One of the issues is that difference in the gap of prices quotes among the nine bidders. One would question the degree of understanding of the different bidders on the specifications of what de Havilland has provided. What stood out is pricing of the current supplier Dollard Plastics at $2.8 mio versus Marton’s $748K. It is either Dollard Plastics is too overpriced but we know how their reliability and how their business works. Marton might have understated their prices just to get the contract and might seek for adjustment in the course of the contract.

Environmental and root cause analysis

Dollard plastics ever though they were Canadian based company refused to lower their price