AMSDEER CORPORATION

Abhishek Kumar

Introduction:
Nov05: RFQ for 1 reactor(paint resins,6000 gallons capacity, stainless steel, agitator). RFQ for 2 reactor(for Central and one for Western Plant).
Jan06 : Bids received and orders were placed. Jan07 : 3 more units were ordered. Issues before Mr. Steele : 1. Reactors on order were costing more than the amounts for which the original awards has been made due to subsequent engg. changes in the specification. 2. All six awards had been made to one vendor.

Reactor Design
Raw materials are cooked in the reactors at temp

500F in various cycles spanning up to eight hours in length. Reactors have inner and outer steel shells between which hot oil is forced to heat the chemical mixture and water to cool it. One Resin line : 4 reactors ($65,000 to $80,000) Other Equipment (Valves, piping, etc.) : $6 million. Conventional Reactor : smooth stainless steel outer shell : 3/8 to 5/4 inches in thickness. Dimpled Construction : outer shell :1/8 inch in thickness. 3rd concept : Half-pipe Coil instead of an outer jacket.
Used in Europe and South America for 15 years.

Stages In Buying Process

1) Problem Recognition 2) General Need Description 3) Product Specification 4) Supplier Search 5) Proposal Solicitation 6) Supplier Selection 7) Order-Routine Specification 8) Performance Review

Problem Recognition
To make a capital investment in
New units of Equipments New Production Line Entire new plant.

General Need Description and Product Specification

To increase the production capacity of
Alkyd Resins for paint manufacture Special Resins for outside customers.

Number of reactors required Reliability Productivity Durability Price Technical Specifications Prepare project budgets Contract for services of Consulting Engineer Allowances for cost escalation

Supplier Search
Past Record of the suppliers

Internal References
External References(Outside sources of

information)

Proposal Selection
Type of reactor to be used

Meeting of the specifications

Price Duration of delivery History and technical expertise of the supplier Past experience with the supplier.

Supplier Selection
Supplier Reputation

Price
Product Reliability Service Reliability Supplier Flexibility

Order Routine Specification

Negotiation in Price and delivery time

Steady flow of key raw material

Flexibility in change in product attributes.

Performance Review
Cost of Maintenance

Quality of the deliverable

Appraisal of Engineers and Managers on buying

performance

Participants in decision making and their benefits

Engineering Group (Plant Managers, Plant

Engineers, Consultants)
Ease of operation Modernization of Plant Reliability

Improvement in productivity

Purchase Department-Purchasing Agent

Cost effectiveness

Contd
Board of Directors
Increase in Revenue and profits Increase in market share in terms of productivity

Suppliers
Increase in customer base Repeat business

Increase in revenue, profits

THANKS !!