Sue Wilson, purchasing manager for the Humboldt, Tennessee, plant of National Agri-Products Company, is back in her office reviewing her notes from a meeting she just finished with Tom Roberts, Vicki Sievers, and Greg Runyon. Tom is the plant manager of the Humboldt plant, Vicki is the plant engineer, and Greg the production manager. The four met for the last hour to discuss the equipment National needs to buy to complete expansion of the Humboldt plant.
National Agri-Products Company produces various agricultural products at its four manufacturing locations throughout the Midwest. The Humboldt plant was built seven years ago to produce cornstarch and dextrose for use as food ingredients. Five and a half years after the plant was completed, top management decided to expand it to produce corn syrup, which is an ingredient in soft drinks, candy, and various baked goods. Humboldt will be the second National Agri-Products Company plant with the capability to produce corn syrup.
As Sue reviews her notes, she notices that Tom, Vicki, and Greg have various requirements for the equipment that would be needed to produce the corn syrup. During the meeting, Tom said it was very important to “get everything right” in completing this project. The company already had invested a lot of money in the expansion, and Tom didn’t want to risk that investment by installing equipment that would produce syrup inferior to National’s standards. Tom said that although he expected to be consulted when needed, he thought Vicki and Greg could handle this assignment without his daily input.
Vicki knew that quality equipment would be needed to produce high-quality corn syrup. She wondered if the plant could meet the deadline National’s home office had given of producing corn syrup in six months. Vicki said she was already working on equipment specifications and she would get them to Sue as soon as possible. Greg’s main concern was producing the corn syrup efficiently and making sure his maintenance people could “keep the stuff running.” Both Vicki and Greg asked Sue to let them know when she had more information about potential suppliers
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After reviewing these notes, Sue knew this was going to be a big job. She has no direct experience buying equipment to produce this type of product line. She decided to call Vijay Sethi, National’s VP of purchasing, to discuss a few options. Vijay reminded Sue that National’s policy is to get three bids on purchases of this amount and suggested that she start with the storage tanks and tubing since they are the most time-consuming items to fabricate. Vijay also gave Sue the number of Larry McDermott, a salesperson for New Products Steel Company, as a potential supplier. Finally, Vijay asked Sue to keep him up to date on progress, as this was the most expensive expansion project the company was undertaking this year.
After talking with Vijay, Sue decided to call Larry McDermott.
LARRY: “Larry McDermott, New Products Steel. May I help you?”
SUE: “Larry, this is Sue Wilson at the Humboldt, Tennessee, plant of National Agri-Products Company. Vijay Sethi gave me your name as a potential bidder on the stainless-steel tanks and tubing we are installing for our new corn syrup product line.”
LARRY: “I’ll certainly be glad to help you out with that, Sue. As you may know, we provided similar equipment for your Hawarden, Iowa, plant when they added the corn syrup line there. We worked with Jim Fisher in Hawarden.”
SUE: “I didn’t know that but I’ll certainly give Jim a call. Anyway, our plant engineer will have specs on the equipment available early next week. When can you come in to go over them?”
LARRY: “Next Wednesday around 2:00 looks good to me. How does that sound?” SUE: “Great. I’ll get our team assembled here and we’ll look forward to meeting you next Wednesday.”
1.1 Who are the various members of the buying center that Larry should take time to get to know? What role or roles within the buying center is each person filling? (4)
1.2. What are the primary needs of each member of the buying center? How much influence do you expect each member of the buying center will have on the final decision? (4)
1.3. Discuss the buying process being followed by National Agri-Products Company. How does this buying process differ from that discussed in class & prescribed in text book? At what stage of the buying process is it most beneficial for Larry to get involved? (2)
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