Conflicts within a Manufacturing Firm
originally titled: Inside Tool and
Die
[Prepared with Roscoe A.
Douglas.]
I
At T&D Manufacturing, the procedure to obtain needed
tooling is to have the tools designed in house by company tool
engineers. When the design is approved, part prints and
specifications are mailed to at least three approved outside
vendors. The outside shop supplying the best price and delivery
date is usually awarded a contract to produce the tool. T&D
also has an internal tool and die department.
In the past this department has been used primarily to
resharpen and repair the tools that are purchased outside.
However, now the head of the department has requested
management to allow them to offer a price to produce the
tooling internally. This request is approved. Next the
department head places a call to the Purchasing Department and
asks for the prices obtained from the outside vendors before he
submits his quote.
Is there anything wrong with the department head making this
request?
How should Purchasing respond?
- Send the department the outside quotes and allow a week
to produce their own price.
- Refuse the request as being unethical.
- Tell the department head that he will receive the outside
prices after the job is awarded.
- Other.
II
[Following 1.]
Outside vendors discover that T&D's Purchasing
Department has shared their quotes with T&D's tool and die
department head. They complain that T&D has acted in bad
faith with outside vendors. Outside vendors are, in effect,
providing free advice to T&D -- and they will very likely
lose out in the bidding. "At the very least," one of the
vendors objects, "you should tell us what your procedure is.
Then see how many of us will be interested in providing quotes
at all. Why should we invest our time and energy in this only
to have you pave the way for your own department to do the
business we are seeking? We don't object to your department
entering the competition, but only on a level playing field.
You have to play fair with us -- otherwise we don't play."
Do the outside vendor's arguments now convince you that
selection #1 in I should not be made? If so, return to I and
make another selection. If not, explain.
III
[Following 2, 3, and 4.]
The department head is disappointed with the Purchasing
Department's refusal to provide quotes of other vendors in
advance. But he tries to persuade Purchasing that it is making
a mistake: "Look, all in-plant departments are a part of the
company! They should be working together to make money, stay in
business, preserve jobs, and whatever other objectives the
company might have. When you treat the inside tool and die shop
as you would an outside vendor, you could be putting the
company in competition with itself! We can't lose sight of the
fact that we should all have the same objectives and goals here
at T&D."
Are you convinced by the department head's reasoning? If so,
return to I and make a selection consistent with his reasoning.
If not, explain.