Erica Carson - Wesbank Case Study

Case 1.2: Erica Carson

Situation & Issues

Erica Carson, purchasing manager from Wesbank, received unsolicited bid from a not current supplier Art Evans, Killoran Inc, which offered 10% less than what they cost $8 million on check printing and mailing to customers last year. Based on special cost analysis of two current contracted split supplier, both of them did a good service and quality, one renewed 8 month ago, the other one expired in another 4 month. Erica Carson considered this underbidding action would access the customers’ name and provide them “scenic check”.

Analysis

Based on the situation mentioned above, Erica Carson should first report unofficial offer to vice president of supply and consider the company policy for unsolicited bid. A meeting with D. Killoran is needed for agreement and details on contract if Wesbank plan to collaboration with the new supplier. Moreover, in order to test the reliability of this company, Wesbank supposed to take cost-benefit analysis and compared with the two current suppliers see which could benefit company’s long term goals. Measuring risk management is significant as well because the image and reputation of company is important. Furthermore, supply efficiency and effectiveness and quality of service is essential for customer satisfaction.

Alternatives & Recommendation

On the one hand, if Wesbank decline this offer, they will stay course with current supplier, no saving, no revenue increasing, and no other problems. On the other hand, if Wesbank accept the offer from D. Killoran, the immediate benefit is save $800,000 on expense of check printing and mailing, the leverage profit is increase. However, there are many unstable factor would occur if collaborate with new supplier. For example, since it is an unknown company, we cannot guarantee the reputation and quality of service. It is difficult to predict a confirmed result from analysis and measurements. Additionally, implementing “scenic check” strategy is a double-effect sword, it is possible to arouse competition between different suppliers, open a new sharing market to finally make an effect on increasing revenue, but when D. Killoran directly get touch with our customer, they may offer them in the same unsolicited way to our competitive company lead to we lose our customer and impact our long-term benefits. In a word, in order to maintain our image, keep the pace of development, and reduce the risk possibility, I recommend do not change and keep contract with the current suppliers.