What are all the issues here, from both CJI’s and Heavey’s perspectives, that need to be researched by Mr. Ashby?
Another possibility for CJI would be to make these pumps in-house. Nik Grams knew
that CJI had the capability to make this pump, but it would require an initial capital
investment of about U.S. $500,000 according to the CJI production manager, along
with the clearing out of some space, and the hiring of three additional employees.
This whole thing seemed to Nik like an ideal job for his special project buyer, Bob
Ashby. He figured he had maybe a week or two to hammer out a plan to assure contract
compliance with Great Lakes, and Bob was known for his ability to put things together
quickly. So, he called Bob.
Discussion Questions
1. What are all the issues here, from both CJI’s and Heavey’s perspectives, that need to
be researched by Mr. Ashby?
2. Should CJI continue to use Heavey to supply pumps, should they make them
in-house, should they consider one of the other suppliers, or should they do some
combination of these alternatives? Discuss the advantages, disadvantages, and risks of
each of these alternatives.
3. How can CJI assure continued contract compliance and additional contract business
from Great Lakes in the future?