QUESTION THREE (20 MARKS)
Posted: Fri May 20, 2022 7:30 am
QUESTION THREE
(20 MARKS)
Estbee Marine finds that it must spend a huge portion of its
revenue on purchases. Estbee has also found that the better its
suppliers understand its end users, the better are both the
supplier’s product and Estbee’s final product.
As one of the 10 largest U.S. power boat manufacturers, Estbee
is trying to differentiate its products from the vast number of
boats supplied by 300 other companies. Thus, the firm works closely
with suppliers to ensure innovation, quality, and timely delivery.
Estbee has done a number of things to drive down costs while
driving up quality, responsiveness, and innovation. First, working
on partnering relationships with suppliers ranging from providers
of windshields to providers of instrument panel controls,
Estbee has brought timely innovation at reasonable cost to its
product. Key vendors are so tightly linked with the company that
they meet with designers to discuss material changes to be
incorporated into new product designs. Second, the company has
joined about 15 other boat manufacturers in a purchasing group,
known as American Boat Builders Association, to work with suppliers
on reducing the costs of large purchases. Third, Estbee is working
with a number of local vendors to supply hardware and fasteners
directly to the assembly line on a just-in-time basis. In some of
these cases, Estbee has worked out an arrangement with the vendor
so that title does not transfer until parts are used by Estbee. In
other cases, title transfers when items are delivered to the
property. This practice drives down total inventory and the costs
associated with large-lot delivery.
Finally, Estbee works with a personnel agency to outsource part
of the recruiting and screening process for employees. In all these
cases, Estbee is demonstrating innovative approaches to supply
chain management that help the firm and, ultimately, the end user.
The Global Company Profile featuring Estbee Marine
provides further background on Estbee’s operations.
Required:
(20 MARKS)
Estbee Marine finds that it must spend a huge portion of its
revenue on purchases. Estbee has also found that the better its
suppliers understand its end users, the better are both the
supplier’s product and Estbee’s final product.
As one of the 10 largest U.S. power boat manufacturers, Estbee
is trying to differentiate its products from the vast number of
boats supplied by 300 other companies. Thus, the firm works closely
with suppliers to ensure innovation, quality, and timely delivery.
Estbee has done a number of things to drive down costs while
driving up quality, responsiveness, and innovation. First, working
on partnering relationships with suppliers ranging from providers
of windshields to providers of instrument panel controls,
Estbee has brought timely innovation at reasonable cost to its
product. Key vendors are so tightly linked with the company that
they meet with designers to discuss material changes to be
incorporated into new product designs. Second, the company has
joined about 15 other boat manufacturers in a purchasing group,
known as American Boat Builders Association, to work with suppliers
on reducing the costs of large purchases. Third, Estbee is working
with a number of local vendors to supply hardware and fasteners
directly to the assembly line on a just-in-time basis. In some of
these cases, Estbee has worked out an arrangement with the vendor
so that title does not transfer until parts are used by Estbee. In
other cases, title transfers when items are delivered to the
property. This practice drives down total inventory and the costs
associated with large-lot delivery.
Finally, Estbee works with a personnel agency to outsource part
of the recruiting and screening process for employees. In all these
cases, Estbee is demonstrating innovative approaches to supply
chain management that help the firm and, ultimately, the end user.
The Global Company Profile featuring Estbee Marine
provides further background on Estbee’s operations.
Required: