Case Analysis: Dashman Company
Case Analysis: Dashman Company
Case Analysis: Dashman Company
DASHMAN COMPANY
SITUATION:
Dashman Company is one of the major suppliers of equipments to the U.S Armed Forces. There are about
20 of their plants which almost work as autonomous bodies.
In an effort to avoid the foreboding shortfall in the essential raw materials required by the plants, Mr. Post
is appointed to coordinate the purchasing activity by Mr. Manson, the president of the company.
Experienced Mr. Larson is appointed as Mr. Post’s secretary.
Post decides to centralize a part of the system by announcing through letters to the purchase executives that
all the purchases made over $10000 should be cleared with the head office and that he is notified about
contracts that are being negotiated at least 1 week in advance.
The plant managers express support and co-ordination but the head office doesn’t receive any notice from
any plant in this period.
Observations:
Any purchase contract in excess with one limit should get approval from head office six weeks in
advance.
Preserving plant autonomy & company culture.
Timely purchase & availability.
Centralized purchase process among plants overlooked by head office.
Best possible price for raw materials.
Keeping head office aware of all the purchase contracts signed at individual plants.
ALTERNATIVE SOLUTIONS
Developing strategy or planning to make purchase on centralized level.
One authorized control personnel can organize, for centralized purchasing process.
Inviting views and suggestions from individual plant executives for centralizing the purchase
process.
Creating a separate purchase department for the company with all the decision powers and control
on the purchase process of individual units.
RECOMMENDED SOLUTIONS
1) Communicate to the plant heads through Larson to make a report on the estimates of raw materials their
plants would require.
2) Call the plant heads for an urgent, high priority board meeting at the head office to discuss these estimates
and the new clauses and norms.
2) Get a report done on what raw materials each supplier supplies, approximation of the quantities of these
raw materials available with each supplier.
3) Analyze the logistics and come up with a purchasing model, where each plant is mapped to certain
suppliers, based on distance between the plant and supplier, raw materials required by the plant, raw
materials supplied by the supplier etc. Ex; Plant 1 mapped to suppliers A, B, C, D...
5) Clause: Each of these plants can deal independently with the suppliers they are mapped to, without any
interference from the head office. In case of an exigency, where the plant requires more raw material than
the estimation they present to the head office and/or there is scarcity of raw material with its mapped
suppliers, than the plant has to get clearance for a purchase order from the deal office to deal with any
other supplier.
6) Explain this model to the plant heads during the board meeting.
7) Regularly follow up on the purchasing activity of the plants
CONCLUSION:
This method of communicating with the plant heads, because of its moderateness, will not elicit strong opposition like
the centralization method that Mr. Post had adopted. The issue of the plant heads feeling alienated from the system
would thus be resolved. This would also facilitate a quicker and more optimal solution. This clause of mapping certain
suppliers will ensure that no plant is able to monopolize any supplier(s). This purchasing model will streamline the
purchasing activity and the dealings will become more transparent. Also, the purchasing procedures will become more
coordinated.