Assignment
Csase: HY TECH
Hy Tech is one of those fast-growing high technology firms that have sprung up like weeds around the Boston, Massachusetts, and Palo Alto, California, areas. In the past seven years, Hy Tech sales grew from $45 million to $750 million.
The success of firms such as Hy Tech depends on their abilities to produce an ever-increasing line of sophisticated products made from increasingly sophisticated parts and components. Consequently, new products and new ideas are the wellhead of Hy Tech's future prosperity.
Ed Williams, director of supply management for Hy Tech, was a most conscientious supply manager. He realized that to keep up with new materials and products it was necessary for him to read prolifically, to talk with engineers and scientists whenever possible, and to attend electronic and similar trade shows several times a year. He also knew that he and his fourteen supply managers had to see approximately seventy-two salespeople a day. To establish good supplier relations, Ed had established as one of his principal policies that every supplier calling at Hy Tech would receive a prompt and courteous hearing. He believed such a policy would guarantee Hy Tech a first chance at new items as quickly as they were invented.
The encouragement Ed gave potential new suppliers to bring their new ideas and their new products to Hy Tech caused the firm to be swamped with visiting sales representatives. Keeping track of them was difficult; evaluating them was almost impossible. One particular difficulty continuously perplexed Ed. When should he send sales reps with especially good new ideas or products to talk directly with Dr. Schmidt, Hy Tech's director of research and development? Dr. Schmidt was well known for his short temper and for not always being objective.
One afternoon in June, a salesman from Advanced Electronics, a small supplier, turned up with what appeared to be an outstanding new analog-to-digital converter. "Ed," the salesman said, "this new converter is exactly what Hy Tech has been looking for. However, it is extremely complicated; therefore, I think much time could be saved by you, me, and Dr. Schmidt if you would send me to talk directly with him." Ed reasoned with himself, "Should I call Dr. Schmidt and risk making a fool of myself if this converter is really a dud, or should I take a chance and ask the old boy to have a look at it in case it's as good as the Advanced salesman says it is?" Ed decided to call Dr. Schmidt.
Later that afternoon, in a high state of agitation, Dr. Schmidt called Ed. "Ed," he said, "Hy Tech pays dearly for my scientific knowledge and ability. To waste my time talking to screwball salesmen is really cheating the company. That salesman you sent to me early this afternoon was an absolute idiot! Besides that, my office and laboratory are filled with confidential company information, and I don't want any salesmen snooping around there. None of them can be trusted, and under no circumstances do I want to see any more of them."
Ed was crushed by Dr. Schmidt's phone call. He and his supply managers were consciously aware that they lacked scientific training. Nonetheless, all were experienced in production, and up to this time they thought they had been doing their job of locating and screening new ideas and products very well. After reflecting back on previous experiences, Ed became a little hot under the collar. He deliberated, "Old Doc Schmidt really gets under my skin! He obviously has forgotten the time that supply management discovered the key component that put our major product on the map and made Hy Tech wealthy and highly respected. That component practically had to be rammed down his throat. Although the discovery was worth millions of dollars to Hy Tech, Old Doc Schmidt just kept grumbling that he had not heard of the supplier."
Ed also was rankled because of what had happened at a staff meeting the week before. Hy Tech's president complained. "How come research and supply management let that new gamma gobbler get away from us? Our competition has it, and they are building a whole line of highly profitable products with it. We will be lucky if we can catch up in two years! What has happened to our profitable policy of always being the first company to get new products?"
1. What generally happens when supply management departments fail to pay prompt and courteous attention to potential suppliers and their offerings?
2. What can Ed Williams do to develop an effective new product screening system?
Attachment:- MANDATORY-OUTLINE-FOR-CASE-ANALYSIS.rar