Purchasing and supply management

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Case 5- Dorman Printing Inc.

Dorman Printing Inc. is a small printing firm with 4 employees, produced tag labels for the food packaging industry. Alex Szabo, the purchasing manager recently received a call from Print Shop Manager (Production Department) complaining on the quality of ink that was purchased 1 week ago from Mareden Ltd. Mareden Ltd is a new supplier of Dorman as it emphasizes in providing good quality of ink and offering a competitive price. The offered price was 5% lower that the recent supplier of Dorman.

The major problem is that Alex Szabo would like to continue dealing with Mareden Ltd., so that the price of materials will be lower and gain a competitive edge. On the other hand, the ink from them was not satisfying production department as it dries slowly and causing a delay in production.

Refer to the case, apparently there is just a little problem on the supplied ink, the ink can be used as usual, but it just dried slowly. Dorman firstly has to clarify the ink requirement to Mareden that it may required some ¡§Instant-Dry¡¨ ink to fulfill its production requirement. Moreover, there should be more communication between Dorman & Mareden on the productions specification. For example Is there any rush requirement from customer? If the answer is yes, Dorman is necessary to order another type of ink from Mareden. On the other hand, Mareden has to inform customer on the alteration of material to its customers and the increase in price due to the ¡§Faster-Dry¡¨ ink order from Mareden. Mareden also need to consider the relationship/ trade-off between price & quality.

During the procurement stage of Mareden, a proposal was sent to Alex. I am so suspicious the proposal quoted a basket of inks or just one type of ink to Alex for selection. If it was the latter case, Alex should blamed for this problem as he was not concern the failure and risk of acquiring unique ink from Mareden, i.e. Out of stock, the shut-down of manufacturer.

From the test production, it showed that there was a discrepancy. The performance of the test was different from the normal production. Such discrepancy might be arisen due to the quantity differences. Moreover, there is also a trustworthiness problem of Mareden Ltd on its ¡§good¡¨ supplies.

According to the above problem, I suggest the following solution for Dorman

1. Revise/Re-draft the proposal from Mareden

As I have recently mentioned, Mareden might only offer one type of ink to Dorman. Instead, Dorman should negotiate with Mareden in altering the proposal from Dorman, such as offering different inks for selection. It is not only solving the slow-dry problem but also avoid the shortage of acquiring unique supply.

. Sampling Alteration

It seem there was no problem in the test production, however, the sampling size might be too small. Small sampling size resulting an unrepresentative figure or result, and eventually a discrepancy occurs. Once, the problem discovered from the ink, it is wise for Dorman to shift to another brand/type of ink.

. Adjustments

Due to the huge proportion in acquiring ink from supplier, Dorman should continue gaining the competitive edge of using the ink of Mareden. To avoid the slow-dry ink, Dorman may seek for some other printing paper, which is suitable for this kind of ink, such as high absorption performance paper. Such adjustment can help Dorman keep using the cheap supply from Mareden as well as not slow down the production.

4. Specification to Mareden

Dorman can communicate more closely with Mareden on its specification as well as its customer one. Due to this production, Dorman should state much more details, such the time allow for the drying out of ink. Specification may include the requirement date of customers. If there is a rush order from customers, Mareden should offer another type of ink to Dorman, so that it can meet customers' orders on time.

In my view, I will first altering the sampling size of the test, so that discrepancy will be discover, then a more detail specification will be sent to Mareden in order to clarify my requirement of the ideal ink needed by Dorman.

For the other solutions, I found that there would be a major change in the production. It is not really appropriate for Dorman to change the printing materials, since the problem is derived from the ink but the printing materials.

Moreover, a continuous improvement ¡V TQM has to implement simultaneously so that the quality can be improved. Despite, the relationship between the two companies is also very important. Unless there is a harmonious supplier-customer relationship (Dorman vs. Mareden), the production schedule can be smoothed out and further meet customers' needs.

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