Selection of a Pessure Vessel Manufacturer - Assignment Example

1. What specific areas and activities should the Oceanics group have investigated on its two visits The two visits were intended to evaluate the twosuppliers and judge the pros and cons of each. This was to avoid future trouble when Oceanics would be using the vessel. Thus based on this the intention was to find out which, amongst the two suppliers, is better qualified for the task at hand. Along with this they had to evaluate the criteria given in both the proposals. They had to evaluate the respective proficiencies of each on in their respective fields. Thus Oceanics has to further evaluate Delivery, Price, Past experience, Shop facilities, Subcontracting, Organization, and Guarantee They have to find out details about the following: potential customers / inter-company business history to see attitude at plant visit day to develop further Oceanics/Jack Tooles perception to measure cooperation to show plant/plant visit to evaluate capability to meet specification and cleanliness requirement to see equipment and machinery as per company perception cause for stated cost self image of management, machinery , equipment and to meet TARGETS to see equipment and machinery as per Oceanics perception work disruptions and strikes at plants staff and area to meet TARGET previous experience of this type of construction and associated claims knowledge of product and facility by representatives that is to measure involvement measure and evaluate material facilities evaluate ability of metallurgical and chemical laboratories 2. Evaluate each supplier on each of the above items using information obtained on the field visits. Information obtained in the field visits is as follows:- Factor Offering company Comment ATOMIC PRODUCTS NUCLEAR potential customer they were potential customers no mention of them being potential customer Therefore in order to keep in the good books of atomic products Oceanic should choose Atomic products cooperation to show plant/plant visit case shows points of arrogance and less enthusiasm very cooperative, highly enthusiastic Nuclear vessels would work with enthusiasm to meet requirements attitude at plant visit day The head ignored the representatives and delayed meeting very cooperative and a good host jack Tooles perception top contender somewhat a top contender both seemed good to Jack Tooles capability to meet specification and cleanliness requirement had some reservations had a few reservations both very neither completely capable ,neither did they lack the capability to meet Oceanic requirements equipment and machinary as per company perception new and up-to-date Considerable age, and not of large capacity, but adequate for the job. Also available for use in other places/subsidiary plants Clearly Atomic products were better of the two Factor Continued on next page >>>> Offering company Comment ATOMIC PRODUCTS NUCLEAR equipment and machinary as per Oceanics perception new and up-to-date not as adequate as Atomic Products'. cause for stated cost lower number of man hours required higher number of man hours required Hence Atomic products show a greater degree of efficiency self image of management,machinery,equipment and to meet TARGETS were firm on their abilities and believed they could make such a vessel or bigger relatively confident Both firms are relatively confident in there ability to meet the challenge work disruptions strikes several according to case Company was on a profit sharing plan. No union existed. Workers were at good terms with management. Clearly Nuclear vessels were better, because they would have little work disruptions. This implies that because worker and management interests in profits should result in the best of effort to make the vessel. Factor Continued on next page >>>> Offering company Comment ATOMIC PRODUCTS NUCLEAR staff and area to meet TARGET relatively sufficient One member each from supply, expediting, quality control, and scheduling was assigned to a task force headed by a project engineer. It was the responsibility of this task force to follow the entire project through the shop and keep the project engineer informed on a day-to-day basis relatively sufficient to complete the task knowledge of product and facility by representative lacking in certain areas had constructed one vessel considerably larger than the vessel required Nuclear vessels is most likely to build the required vessel based on their previous experience. previous experience of this type of construction none ran into numerous problems at the beginning of manufacturing and that the experience gained in the production of such a large vessel made them change their organization for closer follow-up Factor Continued on next page >>>> Offering company Comment ATOMIC PRODUCTS NUCLEAR material facilities up to par Records for better control of material. The group noticed that each piece of material in the shop was marked for the project of its intended use both are relatively well equipped in terms of their material facilities metallurgical and chemical laboratories well equipped to provide test specimens The metallurgical and chemical laboratories were very large, but much of their equipment was old both are relatively well equipped in terms of their material facilities oceanics review Adequate shop and laboratory facilities, location, ability to meet delivery date, and ability to guarantee the vessel. Nuclear Vessels should be given a contract because of their extreme enthusiasm to carry out the job, their past experience in manufacturing pressure vessels of equal size, and their previous Oceanics experience The ability to guarantee the vessel is the key term for me. This for me IMPLIES that what you want is what you will get and it is GAURANTEED. 3. Based on the face value of the written proposals, which company appeared to submit The better offer Based on face value the best value was given by Atomic products: This is because Factor Offering company Comment ATOMIC PRODUCTS NUCLEAR VESSELS Price. cost-plus-a-fixed-fee contract , Total price: Estimated cost $1,120,000,Fixed fee 112,000,Total $1,232,000,Costing rate: Estimated shop rate $24/hour,Shop overhead 180%,Material Cost + 10% handling charge cost-plus-a-fixed-fee basis, Total price: Estimated cost $1,560,000,Fixed fee 1,Total $1,560,001,Costing rates: Estimated shop rate $16/hour,Shop overhead 160%,Material At cost Atomic products are relatively cheaper on all out estimated costs. Shop facilities adequate facilities adequate shop facilities to manufacture and deliver the vessel both are adequate Past experience not made vessels of this size BEFORE but does have the equipment and know-how necessary to perform the work. Extensive experience in manufacturing pressure vessels of heavy plate. clearly nuclear vessels is more experienced Factor Continued on Next Page >>>> Offering company Comment ATOMIC PRODUCTS NUCLEAR VESSELS Subcontracting fabricate the entire vessel without exception in our shop IMPLIES NO SUBCONTRACTING Welding, machining, or testing for this work. However, forgings will be purchased from a competent supplier after he has satisfied the company's metallurgist that his forgings will meet , the specifications. Atomic products show self sufficiency. but subcontracting could produce a better product from specialized suppliers. Hence both seem okay. Organization. 2,000 employees Supply, Expediting, Quality Control, Production and other departments will each have one man assigned to follow this project from start to finish. Forms and records are available for your review. Our organization is familiar with Oceanics' requirements from knowledge gained as a result of previous work accomplished for your division. Both are relatively ok. Delivery. Shipped f.o.b. shipping point via rail in 6 months providing there are no engineering changes. Shipped f.o.b. shipping point, within your required delivery time of six months or shortly thereafter. Both are relatively ok. Factor Continued on next page >>>>> Offering company Comment ATOMIC PRODUCTS NUCLEAR VESSELS Guarantee workmanship and materials to be in accordance with the specifications AS at the time of this proposal guarantee only workmanship, Oceanics will have to stand the costs of any plate rejected or repaired after being tested clearly atomic products is better OCEANICS CONCLUSION Atomic Products Company submitted a lower estimated price, guaranteed the equipment, was more suitably located, and would meet the required delivery date. Jack also pointed out to Grinn and Holpine that Nuclear Vessels, Inc., offered Oceanics lower hourly and overhead rates, a minimum amount of subcontracting, and excellent past experience in making similar vessels. In view of this contract only. The best of the two is Atomic products because of there guarantee to back their claims in addition to expected cheaper costs. 4. Based on the proposal plus information obtained from the case history, which Company is likely to be the better supplier Based on the proposal plus information obtained from the case history, Atomic Products Company is better. This is because according to the case Atomic products offer cheaper price, shop facilities, guarantee of product. Another major advantage with atomic products is that there is no need for subcontracting. The facility and organization is large enough to tackle with the job and handle it. Delivery is expected to be in six months which is relatively acceptable. Atomic products is already a customer of Oceanics thus business relations could be improved. They are relatively more cooperative and have the potential of good relationships with Oceanics. Atomic products has the capability of meeting specification and cleanliness requirement, the have good machinery, they are currently using equipment, labor and machinery efficiently. They have the staff and area to meet the target. They have the knowledge and resources to effectively deliver the product. 5. What do you recommend I would recommend that Oceanics should wait a little more and evaluate both companies further. Oceanics should consider the possibility of having third party reviews. Based on the information available, "Atomic products" seems to be a more viable and appropriate company and thus the contract should be given to atomic products. All requirements should be documented with regular follow-ups. Read More