Jill Jennings , owner of Barefoot Campus Outfitter in Stephenville had just gott

Question

Jill Jennings , owner of Barefoot Campus Outfitter in Stephenville had just gotten off her cell phone with Tony Duster, her long-time friend from Post, Texas and the sole supplier of her most popular offerings, when her telephone rings again. This call is from Sally Haussmann , her number-one client.

“Hey Jill,” Sally says. “I just received a text message from the owner of Aledo Stingers. Guess who got the contract? That’s right; Sis, I want you to get ‘em to me. That will be 20,000 Sweatshirts but I need them before Christmas. I’ll get you the designs by early next week!”

Jill hangs up the phone, stares out of her small store on Washington Street and watches the sun go down on an early November evening. There was no doubt that Jill was thrilled about the great opportunity, but how was she expected to produce such a huge order in a short time?! The season was to start in January 2018 and the Christmas deadline was deadlocked; there was absolutely no room for negotiation. The stores in Aledo will want the new merchandise before the season gets under way.   Realizing that she wouldn’t want to miss an opportunity, she places a call to Tony to place the order.

Tony is a small sports outfit manufacturer in Post that primarily focused on making sweatshirts for local sports teams. However, the factory had been set up for expansion, and was capable of handling a production of this magnitude. But where can Tony get the special materials to produce such a large volume in such a short time? The most Tony had ever had to fill an order was one-third the size that Jill needed. A big order like this means big publicity and more orders were sure to start rolling in over the next few months.

A call to his supplier, Betsy confirms Tony’s suspicions. Betsy can’t produce that much fabric in such a short amount of time. He needs another supplier and he needs one fast. Before Tony decides what to do with this order, he has to make some tough choices. He doesn’t want to disappoint Jill either – oh Boy!

1. What potential options does Tony have to procure the needed volume of fabrics in order to meet the deadline?

2. What are the trades-offs for each of these potential options?

3. What should Tony do?

4. What lessons can be derived from Tony’s situation?

Explanation / Answer

1.
Tony has following options to procure the needed volume of the fabric.
A.   Combination of Betsy as a supplier and another supplier who comes through the reference of Betsy
B.   Betsy as supplier and contracting with other suppliers in the market
C.   Contracting with other manufacturers of the sweatshirt and allocating the orders and these manufacturers will work for Tony

2.
Tradeoff for the alternative A is the assurance of quality provided in the past by Betsy, but higher prices charged by another supplier who will come from the reference of Betsy. Further, the bargaining power of Betsy will increase.
Tradeoff for the alternative B is the scope of doubt upon the quality of fabric and high prices to be charged by the new suppliers. Further, time is another issue for Tony. Though, Tony can get the new network of suppliers that will help Tony in the future.
Tradeoff for the alternative C is the timely delivery of the dress, but lack of assurance of the quality and Tony cannot rely upon any other manufacturer in the same way.

3.
Tony should take Betsy and his another supplier. Besides, Tony can also add one more supplier to provide the fabric. With a network of three suppliers, Tony can produce the number of dresses as required. Tony should pay the price, but quality should not be compromised as it will be the foundation of getting the bigger order in the future.

4.
Following lessons can be drawn from the Tony’s situation.
A.   Maintain good inventory management practices to capitalize on any unexpected rise in demand
B.   Build a contractual relationship with more than 1 suppliers so that Tony will not be dependent upon only one supplier.
C.   Build a network with different players in the market so that their services can be taken in emergency situations.

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