pmm assignment - 2

7/25/2019 PMM Assignment - 2

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PMM Assignment 2: Case Study on ABC Motor Company

Sameer Dubey 44C

Ans 1- The purchasing strategy of ABC was to purchase the parts and components in large volumes.

The overall cost structure of their suppliers was accustomed to the high volume production of

scooters. The quality measures were less stringent and the purchasing team was using the same

costing norms for the motorcycle parts as for the much larger volume scooters.

ABCs Company Strategy was focused on high volume wheeler production. After a decision to foray

into motorcycle mar!et" the strategy evolved from single focus scooter mar!et to accommodate

upcoming motorcycle mar!et too. The strategy involved to procure # produce as much local as the

company is technically capa$le of" stri!e a partnership with foreign manufacturer to leverage its

technical and %nancial strengths to $uild leadership in local mar!et. &hen the mar!et is protected or

the company $ecomes self-reliant" do entire production and procurement themselves.

Ans - ABCs 'urchasing team was una$le to get its suppliers to deliver for (C) $ecause of the

following reasons.

i* Suppliers were not ready for the change and focused mainly on scooter parts which were theircore strength.

ii* The suppliers did not want to invest time and cost into low volume (C) parts.iii* Suppliers were una$le to match the quality standards as the technical e+pertise was not at par

with ,s standards.iv* The pressure was $uilding on (C) and hence on suppliers as the import cost was continuously

increasing.

Ans /- To avoid this situation ABC could have ta!en the following steps0

i* ABC could have tied up with new suppliers who were ready to learn and then produce the

required quality parts for motorcycles.ii* ABC could have invested more in the training of the suppliers to increase their competence in

manufacturing (C) parts.iii* ABC could have incentivied their suppliers to provide high quality (C) parts.iv* ABC should have focused more on top-down leadership approach and the change should have

$een driven $y the top leaders $y focusing more on colla$orative activities $etween ABC and

,.v* ABC could have entered in a much longer contract with the government instead of going for an

aggressive 2 year contract after assessing the situation at hand.

Ans 3- Ar4uns strategy for (C) purchasing should $e to convince the e+isting suppliers to invest in

manufacturing of motorcycle parts $y incentiviing them. 5e should loo! for new suppliers that havethe technological advancement and are ready to deliver the required quality of parts and

components.

6n order to purchase other parts and components" Ar4un should approach the suppliers of the

competitors who are already ahead in the race and use the mar!et leadership situation to its

advantage.

Ans 2- Ar4uns strategy may impact the purchasing of parts for scooters $y ma!ing the suppliers

more competent and they could use the new technology in the improvement of quality of parts for

7/25/2019 PMM Assignment - 2

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