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Impromptu Dilemma #3 October 3: Respond within eight hours You manage supplier relations for a high-end bicycle manufacturer. The new CEO has just informed you that in two months the company will discontinue a line of specialty bikes, which require a component made by a small manufacturer in Mexico. The Mexican supplier has been a model supplier over the years, and maintains a two-month inventory of components to make sure it doesn’t fall behind in its ability to supply its parts to you. You are its only customer, and the part is the only thing it produces. The CEO explains to you that if word gets out of the discontinuation, the remaining inventory of bikes will drop about 50% in value, incurring great costs to the company. “It’s essential that you keep this absolutely top-secret.” You point out to the CEO, however, that if you don’t inform your Mexican supplier that
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Unformatted text preview: you plan to stop ordering from them, they will have produced two months of unusable inventory. The small company probably couldn’t recover from that loss. But if they learn now of the imminent discontinuation, they may be able to retool their workshop to produce some other viable product. You also explain to him that the supplier is the only reliable source of employment in its small, poor village. The CEO is adamant, however. “We can’t worry about that,” he says. “If word leaks out into our supplier network, we will get hammered financially.” You feel you need to make a decision about what to do in the next eight hours. Please write (briefly) what you would say to whom as your next step....
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