Firebird

• was the first foreign supplier
relocated in United States
supplying automobile parts.
•was the direct supplier of
Road-master Car Company -
supplying headlights,
taillights, lid lamps, center
high mounts, and front-turn
assemblies.

• were also supplying OEM (Original
Equipment Manufacturing) lighting to
several automobile plants:
Orangeburg Plant
Columbia Auto Plant
Columbia Motorcycle Plant

•In addition, the company was engaged
in exporting too. Service (after market)
products and molded parts were made for
foreign and domestic demands, such as
to:
Road-master Canada
Road-master De Mexico
Germany
Brazil
Japan

FIVE DISTINCT OPERATIONS CENTERS
1.
2.
3.
4.
Halogen Bulb Department
EAST PLANT:
manufactures light assemblies and units
Manufacturing I
Manufacturing II
WEST PLANT:
provides components to assembly and external sales
Manufacturing III
Manufacturing IV
5.

1.
EAST PLANT:
manufactures light assemblies and units
Manufacturing I
produces headlights and front turn
assemblies
2. Manufacturing II
assemble tail lights, lid lamps,
center high mounts and
aftermarket products.

3.
WEST PLANT:
provides components to assembly and
external sales
Manufacturing III
an isolated sanitation areas for
coating process for lenses,
reflectors and extensions
4. Manufacturing IV
a die injection molding facility
producing reflectors, lenses, and
hourings

5. Halogen Bulb department
provides the majority of the bulbs used in
production

•Purchasing for Firebird Electric is decentralized.
•The department consists of nine full-time associates.
Purchasing manager – which assists in decision making
and controls administrative duties
Six buyers – who are responsible for obtaining materials to
meet production requirements.
Associate 1 does the duty for HB department
Associate 2 is solely responsible for MRO purchasing.
Associate 3,4,5 and 6 are responsible for specific vendors
Associates 7 and 8 are specifically assigned to supplier
evaluation and incoming quality conformance.

• have been awarded OEM production for the lighting on
the 2005 model two-door B-car.
• also started outsourcing the production of housings to
four central South Carolina molding firms. FPE , the South
Carolina Plastics ( top co) , Central South Carolina
Plastics ( COPCO ) , and Charleston Custom Plastic
(WCP) because it was noticed that of the approximately
240 parts molded, only 11 are housings.
• considering the idea of 'new product development'
which would have something to do with the production
of the housings.

Firebird Electric U.S was weighing and
analyzing the idea of the 'make or buy'
decision - whether to begin the New Product
Development project which refers to the in-
house manufacturing of housings or should
just continue to outsource these automobile
parts.

• being a reliable supplier of automobile parts to
different motor vehicle companies, local and abroad.
• very good, well organized and distinct operation
centers
• decentralized purchasing department
• allowing customers, internal departments and
potential suppliers to contribute in the new product
development process
• Flow of information is done horizontally and vertically

Incapability to produce the total
demands for the housings.

• presence of new technology such as the
two largest molding machines that they
have acquired and that will aid them in
the decisions regarding future expansion.
• Outsourcing

Non-conformance to quality requirements
and just-in-time inventory systems of Road
master may result in high costs, hinders
customer relations, and endangers
prospective contract.

A. Firebird Electric, U.S must spent some time
on studying the pros and cons of the ‘’make’’
or ‘’buy’’ decisions.
ADVANTAGES:
• It can give better results on which strategy should
the firm pursue and adopt based on its production’s
capabilities, resources, needs and objectives.
• It will enable them to choose among more than
one option rather than simply accepting what are
available.

A. Firebird Electric, U.S must spent some time
on studying the pros and cons of the ‘’make’’
or ‘’buy’’ decisions.
DISADVANTAGES:
• It will require much time, effort, and money to
complete the study.

B. The company may choose to go with the
option of manufacturing the parts or the
“make” decision
ADVANTAGES:
• It offers a total control over the cost and quality of
the products or parts.
• All informations with regard to the production of
the parts would be handled with direct responsibility
and control over security and privacy.

B. The company may choose to go with the
option of manufacturing the parts or the
“make” strategy
DISADVANTAGES:
• Employment and retention of specialized labor may
sometimes prove not economically justifiable and may have
adverse effects on the firm’s costs and profitability.
• Output is limited by their own resources- efficiency of the
workforce, machineries, warehouses, and others.
• It will offer too much expenses for the company regarding
the definition of requirements needed for the new product
development, as well as time to acquire new technology and
to perfect the desired quality requested by their customers.

C. The firm may also pursue the “buy”
decision - outsources one of their production
lines to other companies.
ADVANTAGES:
• Adopting the “ buy” decision can cut the total costs to the
lowest without compromising the quality of the products.
• It will allow the firm to gain access to the best resources to
which the firms to be outsourced to can offer.
• The firm can able to explore new target markets and focus
on its core competency.

C. The firm may also pursue the “buy”
decision - outsources one of their production
lines to other companies.
DISADVANTAGES:
• There are high risks in retaining confidential information and
technology with regards to the external suppliers.
• There would be substantial loss in the control over the quality
of the materials.
• It would also prove to be a challenge for the buying firm to
establish a “well to-do” relationship with their suppliers.

Firebird Electric, U.S should
pursue the “buy” decision for
the housing parts.

Firebird Electric, U.S should pursue the
“buy” decision for the housing parts.
the following reasons are:
• It was stated on the case that of the
approximately 240 parts molded, only 11 were
the housings.
• Difference in quality levels of in-house and
procured parts is negligible.

Firebird Electric, U.S should pursue the
“buy” decision for the housing parts.
the following reasons are:
• The comparison between the costs associated on the “make-
or-buy” decision showed that the firm can save a lot if they were
going to continue pursue the latter.
• There is a strong inter departmental coordination in the whole
organization. Departments included in the product development
process such as product design, purchasing, quality assurance,
sales, production control and materials management are highly
integrated from each other.

Since the company has already outsourced the production of
housing parts to third party companies - FPE , the South Carolina
Plastics ( top co) , Central South Carolina Plastics ( COPCO ) , and
Charleston Custom Plastic (WCP), it must then:
• analyze first the supply and operational
performance of the current suppliers, its
reliability, partnership approach, financial
security and others
• analyze the factors that will affect the
outsourcing process as well as the
Qualitative and Quantitative Aspects

• incase of incapability, make a very good
Supplier Selection and Evaluation Plan
• Think strategically when selecting suppliers
• Identify the characteristics that a suppliers should possessed:
× Reliability
× Quality
× Value for money
× Strong service and clear communication
× Financial security
× Partnership approach

• incase of incapability, make a very good
Supplier Selection and Evaluation Plan
• Draw up a short list of suppliers
• Do some research and try to slim the list down to more than
four or five candidates.
• Approach the potential suppliers and ask for a written
quotation and it appropriate a sample.
• Get a quotation
• Compare potential suppliers
• Negotiates terms and conditions to the chosen supplier.

• establish a good and long-term
relationship to the supplier - this calls for
constant communication and flexibility
• give extended consideration on studying the Hidden Costs
of Outsourcing.
× Supplier health
× Quality breakdown
× Contract non-compliance
× Internal Expenses

• manage the Outsourcing Program
x The company must keep an eye on what’s being done on the money they’re
spending the quality, cost, efficiency, effectiveness etc.
x They must be sensitive regarding the Lead time and Quality of the Products as
the two are the most important things strictly focusing by the customers.
x They must have a detailed plan for how their going to capture, manage and
maintain all the information’s to be used. This is for the security and confidentialy of
informations and other intellectual property not to be compromised.
• continuously monitor the Outsourcing Process.
Measures Success.

Choosing the 'buy' decision may give lots of benefits for the
company but will also create certain drawbacks. They may
seem only to focus on the external forces that may affect their
business in the future and used to oversee and disregard those
in the internal.
The very first challenge that companies are likely to experience
when embarking on outsourcing certain functions, is that of a
possible lack of buy-in from people inside the company, which
may take the form of active or passive resistance. The prospect
of outsourcing also creates uncertainty for existing employees,
who may decide to look elsewhere for an employment.

• implement an effective change
management strategy as soon as the
outsourcing contract has been signed.
• A comprehensive communication
programme should be developed and
dessiminated to all stakeholders who will
be affected by the outsourcing process.

• The message should be personalized
for different levels of employees, and
should essentially answer the question:
“What about me?”
• Employees should be given the
opportunity to ask questions and be
heard.

Firebird

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