Agile Electric Quality Issue in a Global Supply Chain Case Study Solution
ECPL:
ECPL is an Indian based tier 3 supplier for PCB to Agile in the supply chain. The project does not possess much importance for ECPL as the project has no strategic importance for ECPL However, ECPL with assurance of technical assistance and supplies support from Automek, ECPL agreed to the project to maintain its strategic relations with Agile.
Tier 4 Suppliers:
Tier 4 suppliers include a local supplier BIPL and other international suppliers for capacitors, transistors etc. These suppliers were recommended by Automek to ECPL and Automek was responsible to handle supply between ECPL and theses suppliers. BIPL is an Indian based supplier of PCB that was inspected and finalized as a supplier by Automek for ECPL after a quality inspection. (Emmino, 2019)
Table-1: Multi-Tiered Global Supply Chain
Synopsis of the case
As stated above, the case involves a discussion of certain quality issues related to the supply chain and how these issues evolved with the passage of time in context of a global multi-tiered supply chain. Agile, being a core low-cost supplier to Automek, has succeeded to provide quality products with only 70 PPM to Automek through its engineering support. On the basis of the successful track record of the firm, Agile got an order of a critical product (actuator assembly) which bring huge concerns for Agile in terms of lack of knowledge and technical support from Automek this time, along with the supply of critical parts required for actuator assembly. However, Automek motivated Agile to accept the project with assuring its support in terms of providing global suppliers for critical parts i.e. capacitors and investigating and validating the Indian suppliers on behalf of the firm. Agile finally accepted the proposal and started its actuator assembly line.
The issues started in September 2008, with a failure in one of cars supplier by OEM that seemed to originate from the actuator assembly. After inquiry, Agile realized that the issue came due to the faulty capacitor that was supplied by Tier 4 international supplier, suggested by Automek to ECPL. After a deep discussion and inspection form a foreign team the issue was resolved with production and supply delays, inspection costs and complaints.
In June 2009, another issue raised related to the electronic component assembly which was shifted to actuator assembly after inspection. However, after several inspection rounds, Agile was successful to defend itself and the allegation transferred to PCB supplier by BIPL. These issues raised tensions for each of the party involved in the supply chain with supply details, customer complaints, inspection costs etc.
Issues Identification
Main Issues
Supply of PCB Assembly:
One of the major issues for Agile is the supply of PCB assembly. Due to PCB assembly, Agile needs to seek help of local suppliers to complete its assembly. However, the PCB supplied by local suppliers creates several issues for Agile in form of subsequent liability. If it decides to drop local supplier then Agile needs ti search an alternative for this component.
Responsibility of subsequent Liability in case of Recall:
Another problem faced by Agile is the responsibility of subsequent liability in case of a recall. According to Agile, Automek is responsible to pay back in case of a recall as it assured the inspection and validation of all tier 4 suppliers.
Side Issues
Tensed Relations with Automek:
Beside the main issues, the deterioration of relations with Automek with a question mark on the quality of future contracts is also one the concern for Agile. If the project gets unsuccessful due to failure of any tier, the long-term relations with Automek could become tensed and bring substantial strategic losses to Agile..............
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