How Close Is Too Close?
How would you suggest Tim analyze this opportunity? Senior Vice President of supply chain management Tim Tree of Top Line, Inc. Has to decide if being a partner is right for him. For Tree to make the proper decision he will need to list vital factors that will allow Dynamo and Top Line, Inc. To work as one. By strategically analyzing the short-term and long-term goals of Dynamo, Tree will see if the Dynamo organization will remain in a business with Top Line, Inc. For several years.
He will see through evaluation of gains and losses if Dynamo will try to find nether company that could possibly offer the same thing that Top Tree Is offering. For the company to profit Tree will need to ensure that consumers are in the market for what is being offered if Dynamo does not partner with Top Line, Inc. For this to be accomplished Tree will need the help of those that work for him. Those that work the day-to-day operations of the company will are in the best position to tell him what they are observing, and If moving on will be the best choice. Question: What the Implications of saying “yes”?
The Implications of Tim accepting the offer from Dynamo to become one of their few “partner suppliers” is a perplexing situation for Tim, who is the Vice President of Supply Chain Management at Top Line Inc. There are tremendous positives for Top Line if they were to accept this offer, but there are also some negative considerations that could be significant. The positive opportunities for Top Line Include the commitment of Dynamo to Top Line as their sole source for their products. This means stability for Top Line with this customer and as Dynamo grows so grows the Top Line Inc.
There are also great opportunities for engineering and technology sharing between the two organizations and this could be a strong addition to the Top Line group. An additional positive of this acceptance into the partner/supplier is that Top Line will be included in the early development and design of new products from Dynamo. This means that Top Line can design and be ready to supply Dynamo with their new requirements because of this early Inclusion and partnership agreement. The negatives of this agreement are very real and must be carefully considered before accepting this seemingly golden opportunity.
There is a great deal of resource commitment that will have to be made to meet Dynamo’s agreement. From mandatory meetings, to the sharing of technical resources, a great deal of resource time will have to be allocated to this one customer. There is also a mandate where cost, technological, and resource Information Is required to be shared with Dynamo. This Is a very sensitive area for Top Line as there patent strength Is one of their key intellectual properties and the information of these will be required to be shared tit Dynamo.
Another consideration is the mandated cost reduction that Top Line must supply each year as a partner to Dynamo. This will have to be evaluated, and the financial impact reviewed carefully. Question: What the implications of saying partner supplier for a Dynamo corporation or to decline this offer. Although Tim can see a lot of advantages of saying “yes” to this opportunity, he has to analyze the outcomes of his negative decision if he will have to make one. The positive sides of not accepting this offer would be not feeling the pressure of being a sole partner applier for a large corporation.
He would not have to worry about the availability of resources to supply. The company would not have to be involved in all the organized agenda of a large company, I. E. Holding the mandatory meetings, sharing intellectual property, like technical resources, costs and resource information. The patents, therefore, would be safer here, not being shared with a large customer. Mandated cost reduction would not have to become an issue, because the impacts of reduced costs on financial stability of the Top Line are not really known.
All the process of reading the inventory would not have to be shared every single step of the way. In other words if Top Line would decline the offer, it would not have so many obligations to take upon itself and it would not have to follow an agenda of someone else. The negative side of declining the offer to become a partner supplier is that Top Line would not secure a large contract that could potentially lead to more revenues and better financial security of the company. The company would not get an enhanced publicity, which it would otherwise enjoyed by securing a large contract and gaining exclusivity status.
That publicity is usually very good for marketing and getting the name of the company out there. The company would not have opportunities that could arise while sharing the engineering and technology between the large organizations. Top Line would also not be included in the early development and design of the new products, and that means that they would not have so much say in the design specifications and requirements of the product. Question: If the invitation is accepted, how can Tim assure a successful “partnership”? As Tim considers if Top Line Inc. Would partner with Dynamo he should consider hat saying “no” would do for the company. Currently Top Line Inc. Is doing very well and Dynamo has proven that they are a company that can be depended on for service by winning the supplier of the year award and being names the key stake holder. The fear of that Tom has on communicating information real-time, sharing technology, integrating planning and production schedules, and dedicating resources are all validate point of concerns but the Dynamo has shown that will to meet the needs of Top Line Inc. Saying “no” would be a missed opportunity to grow future business.
