Time Context Supplier evaluation is a must for Success Company. Y Ltd which is under the management of X Inc. has to be evaluated as soon as possiblesince Success Company received substantial information about the financial status of the former. Y Ltd incurred heavy losses during the past year and Success Company wanted a clear-cut answer on the reason behind this. Mike Vanne, CEO of X Inc. figured out that it was due to incompetent management of the previous administration. In the first place, Mike should have figured this out prior to acquiring Y Ltd, for this is one of the most important considerations in the merger and acquisition activity - understanding the competency of the previous administration, its personnel and so on.
The entire case revolved around this issue, which Success Company should efficiently investigate. In other words, the time of Success Company’s evaluation of its supplier was the moment of implementing substantial research in order to make sure that everything was going well with the stability of its sources of supplies. Y Ltd’s evaluation was so timely for this purpose and so Success Company sent personnel, Jill Turner, a representative from the said organization’s assessment team as to be the one to remarkably perform the task.
Furthermore, the assessment was the appropriate time of ensuring the right future decision of Success Inc. regarding its supplier. That was supposed to be the time to evaluate whether Success Inc. will continue to rely on Y Ltd. Therefore, that was also the time to sufficiently understand financial status, and other management-related issues. Viewpoint The entire case comes from the point of view of Jill Turner, from the assessment team of Success Company who tried to investigate the financial status of Company Y (Y Ltd), their supplier and which was acquired by Company X or X Inc (Ostring 154).
She tried to combine asking both quantitative and qualitative information in order to secure appropriate analysis about their supplier through meeting with Mike Vanne. She raised substantial questions which would be the basis of identifying the information that she was looking in order to investigate Y Ltd further. Since this company was acquired by X Inc, it was integral part of Jill’s investigation to include the latter.
This paper also tries to take a look at the entire approach of Success Inc. in order to analyze how this company managed to investigate the status of their supplier under merger. Using qualitative and quantitative information, there could be more important things to learn about the supplier from the point of view of Success Inc. Central Problem How could Success Inc ensure that Y Ltd is still the best company it could rely on for its supplies?
This specifically was the central problem Jill should substantially find out in the whole point of investigating the merging between Y Ltd and X Inc. Jill was looking forward to talk to the CFO, Sandra Chia, in the hope to see the actual figures to find out the company’s actual financial performance. Unfortunately, Jill was not able to obtain the required or necessary quantitative information so she moved forward in her investigation using the following qualitative information discussed in the next sections. She continued to probe something by asking specific questions that at some point may no longer need a CFO in order to acquire potential answers.
In meetings like what Jill had with Mike, the CFO must be present in order to substantially understand how the company is performing. The financial evidences would suggest and even an important basis of why stakeholders should place their investment in a certain company and continue to put their trust in it. Statement of Objectives The following must be the ultimate goals that Success Inc should consider in the assessment process of its supplier. 1.
What is the financial stability level of Y Ltd? 2. What essential information or data would suffice to answer the level of trust that Success Inc must give to Y Ltd? 3. What must be the final decision of Success Inc regarding its trust in its supplier? Success Company has shown a very important approach in determining how to place a significant trust in a certain supplier. It was able to exercise its right to investigate information of its interest from its supplier. This entire activity therefore requires more meaningful understanding how the entire business works so that the chosen personnel for this activity should be able to come up with the right information.
In the case of X Ltd and Success Company’s assessment of the former, the absence of actual financial figures should not be a hindrance in the investigation of an organization’s status in its industry, especially on economic and financial concerns. Success Company had just shown its resourcefulness to dig on qualitative information that it could probably use in order to assess the level of economic performance of its suppliers.
The case of Jill, who was substantially smart personnel in behalf of Success Company to assess the level of performance and productivity of X Ltd, was a depiction of knowledge, creativity and resourcefulness in acquiring important details about a certain supplier. All information she gathered must be based on important and reliable source and her point of the actual investigation was a way of confirming them all. Thus, it is important to rely not only on certain information in investigating a supplier, but a thorough research and substantial know-how of the entire case should be highly required.
The assessment is not a tedious process, but it essentially requires more meaningful information that in the end would make sense in the actual decision-making process. Areas of Consideration It should be important to conduct efficient assessment of supplier’s business stability in order to evaluate in advance the quality of its future involvement with Success Inc. Therefore, it would be of significant consideration to initiate thorough investigation process of supplier prior to placing certain level of trust in it. (SWOT) 1. Strengths 1.1.
The approach of Success Company is straightforward. This makes Jill so confident to confront X Inc through some generated information. 1.2. Success Company is good at finding information from outside source. 1.3. X Inc was placing high priority for expansion, which means a good opportunity for Y Ltd to expand too. 2. Weaknesses 2.1. There is less formality on the approach of Jill, which resulted further to the disorganization of the actual interview. In fact, there still remain many questions that she needs to ask, but unfortunately did not have any chance to go further as she asked straightforwardly highly sensitive question prior to everything.
2.2. In meetings like what Jill had with Mike, the CFO must be present in order to substantially understand how the company is performing. The financial evidences would suggest and even an important basis of why stakeholders should place their investment in a certain company and continue to put their trust in it. However, Success Company failed to acquire this information due to lack of appropriate approach on the part of the assessment team.
2.3 X Inc is highly disorganized company. 2.4. X Inc. is less formal in dealing with business. 3. Opportunities 3.1. It is always an opportunity for Success Company to ask relevant questions based on its interest. 3.2. The absence of remarkable persons is an opportunity on the part of X Inc to disclose the right information. 4. Threats 4.1. Inconsistent information provided by X Inc is a threat on the part of Success Inc prior to implementing its final decision with Y Ltd. 4.2. Change of R&D personnel is a probable threat on the part of Y Ltd and X Inc merging.
Alternative Courses of Action 1. Prospecting other suppliers This should be an advantage on the part of Success Inc because it would help it evaluate further the level of trust it should place in Y Ltd. In the first place, this would lead to having many choices of suppliers to consider. This would also evaluate the high risk involved with inconsistent information provided by X Inc and to be disclosed by future organization On the other hand, this would take too much time and additional further training on the assessment team and required research activities.
Thus, it would further incur additional cost, time and generally investment on the part of Success Inc. 2. Hire R&D personnel for the assessment team As Success Inc has the potential to acquire significant information regarding its suppliers, it is good to further improve this level. It could hire those R&D personnel who were eliminated during the merging of Y Ltd and X Inc. The advantage of this move is to be able to achieve personnel who could be added in the assessment team, and who already have substantial experience about assessment, evaluation and investigation. The potential drawback of this move would fall under incurring of additional cost that could be less sensible if the newly hired personnel will not perform well.
Thus, additional training should be given to them, which would again incur additional cost. 3. Training for the assessment team Another alternative course of action is to create further training or seminar for the assessment team. This would further enhance the ability of the assessment team to interact with people at various settings at a highly professional and efficient approach.
Furthermore, the assessment team will be exposed to additional information about creating detailed plan just prior to the investigation of their supplier. The advantage of this approach is to know in advance the possible questions that will be raised in order to ward off unnecessary reactions on the part of the supplier that may hinder disclosure of significant information. Furthermore, they will be exposed further to the significant of effective communication process and understanding verbal and non-verbal signals. However, this would also incur cost and will just be wasted if the assessment team will not be totally willing to learn more or accept new learning.
Final Decision The final decision then of the Success Company just prior to the assessment of its supplier is to best train the assessment team in handling various situations - the alternative course of action number 3. This has to be conducted in order to come up with an assessment team with more detailed, effective and efficient approach in the actual evaluation process with suppliers. Detailed Action Plan 1. Initiation step The CEO of Success Company should call for a meeting informing the assessment team for possible modification or enhancement in their entire operation.
The possible training and other detailed plans for the assessment team should be agreed by all through a deliberate discussion and unanimous decision. 2. Planning step The following should be the detailed plan of the training of the assessment team. Specific action plan Officer responsible Time frame Budget ($) Meeting CEO 1 – 2 days 100 – Snacks/meal Research training and workshop Outsource professional speaker 3 days 2000 Planning workshop Outsource professional speaker 3 days 2000 Verbal and non-verbal communication training and workshop Outsource professional speaker 3 days 2000 3.
Execution step The CEO should then ask the Human Resource Department to find for experts, highly calibrated, reliable speakers or training firms to be outsourced for the entire training. 4. Control stage Within the training period, all participants in the assessment team should be evaluated in order to measure the level of their learning and response to the entire duration of the training. A passing rate of 85% for each evaluation should be considered satisfactory. 5. Closing stage If majority or at least 85% of knowledge proficiency in the training will be achieved by the assessment team, then they would be remarkably ready for deployment.
In case when the team will not be able to achieve this, a re-echo seminar should be set by the company to be initiated by its Human Resource Department and deployment shall follow after this. Reference Ostring, Pirkko. Profit-focused Supplier Management: How to identify risks and recognize opportunities. New York, NY: AMACOM, 2004.