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Q1) Identify DMU and its members and explain what they are looking in the

transaction?
Ans:
DMU- Vancouver Plant of British Columbia Box Limited
Initiator: Mr. Paul Flynn, Vancouver Plant Manager(The old machine was old,
needed frequent repairs. So he was looking for a new flexo folder gluer machine
which would combine flexographic printing with folding and gluing operations.)
Users: Plant Workers (Training for the new machine); Archie, Plant
Superintendent and Quality Control Supervisor (The old machine could break
down any day jeopardising the beer business. So they were looking for a new
machine)
Influencers: Mr. Wood, Plant Industrial Engineer (Wood favoured a Bale machine
because of Bales track record in numerically controlled functions); Mr. Ray
Dover, Sales Manager (He could generate an additional 1,000,000 in sales with
the new machine); Archie, Factory Superintendent( If Flynn decided on Andrews
machine, he would get it running); Jack, Maintenance Supervisor ( He was not in
favour of buying from Bale because he did not like the old Bale die cuter at the
Vancouver plant. So he was looking for a non Bale product).
Deciders: Flynn (He had to decide whether to go for Bale which was 20,000$
cheaper or Andrews which had 8 additional features)
Approvers: Canadian Division General Manager, Manager of Engineering Services
(They visited plants to see the machines in action. They had the authority to give
a go ahead to new machine purchase), BCB vice president of Finance (to review
the quotations submitted by suppliers)
Buyers: Manager of Engineering Services ( He was awaiting decision from Flynn
by 4.30 pm on 23rd December to buy the machine), Purchasing Department.
Gatekeepers: Purchasing Agent for the Canadian Division (He was conveying
information on price reduction from Bale to Flynn)

Q2) What type of buy the org is in and how does it affect the purchase?
The buyer in a modified rebuy wants to change product specification, prices,
delivery requirements etc.
In this case, Vancouver Plant was using an old gluer machine which needed
frequent repairs. Flynn was looking for a flexo gluer machine which would be a
high performance combination printing slotting, folding and gluing equipment
that will provide finishing capacity for an additional 20 million square feet board
annually.
Also this requires additional participants on both sides.

Q3)Examine different Stages of buying and analyze what happened. How could
suppliers have responded at each stage?

Problem Recognition
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General Need Description and Product Specification


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Flynn and Wood had been conscious of the need for a flexo folder
gler machine which would combine flexographic printing with the
folding and gluing operations.
Wood performed an analysis which showed new machine will lead to
savings on setup time alone, from 36 minutes to 18 minutes and
glue rate, ink rate and jam detection features would mean less
waste, less supervision and a higher quality product.
According to Mr. Ray Dover, the new machine can generate an
additional $1,000,000 in sales.
It will provide finishing capacity for an additional 20 million sq. Ft.
Board annually.

Supplier Search
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New flexo folder gluing machine needed at Vancouver plant of


British Columbia Box Ltd. as the Old machine could break down
anytime jeopardizing the beer business.
External Stimulus was Mr. Flynn attending the conference on
Technical Association of the Pulp and Paper Industry where he learnt
about a new computer numerically controlled flexo folder gluer in
Bale brochure.
Repairing cost of the old machine is 1,60,000$ but there were
disadvantages to repairing as in a six to eight week shutdown will
be necessary and only present output levels will be maintained with
no method improvement or cost reduction.

North American supplier because Flynn wanted service and parts


close at hand.
Four major equipment manufacturers were identified.

Proposal Solicitation
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Flynn invites Four major equipment manufacturers were asked to


submit serious quotations.
Bateman, Bale representative visited Vancouver plant and showed a
video, offered approximate sizes and gave rough prices.
Jim Castrelli, Andrews salesperson also visited Vancouver plant and
assured Flynn that Andrews will launch an excellent machine within
6 months. He showed video and left brochures and invited Wood
and plant manager to see Andrews manufacturing facility in
Cleveland.
Mr Dunnel from Rhone also visited the plant.

The Kalder company initially sent a good salesperson but he died


suddenly. His substitute got promoted and the last replacement was
incompetent who talked about irrelevant things.

Suppliers Response:
Supply proposal in accordance with the requirements of the
buyer
Compare the proposals or offers by other suppliers
Try to communicate the special features of their product
Convey the future cost saving benefits the buyer will gain

Supplier Selection
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Kalder company was rejected as it has not developed any expertise


in numerically controlled machines.
Rhone was not in the race as it had lost some of its reputation for
high quality machines.
Flynn compared the CNC features and found that Andrews had 8
more features
Andrews also had a more safer and reliable feeder compared to Bale
and an ink wash-up system which performed more satisfactorily
Bale had more experience in numerically controlled functions.
Price bargaining between purchase department and the suppliers
started.
Bale and Andrews lowered their prices to compete with each other.
Each offered various services in addition to the machine like free
installation and training to workers.
Final price offered by Bale was $4,90,000 and Andrews was
$5,10,000.
Suppliers Response:
Reduction in prices
Free installation
Added discounts
Training of personnel for the machine
Passage of economic advantage
Highlighting additional features compared to competitors and
their importance.