Procuremet and Sourcing Course Case Study: Fuller Uses Supplier Visits to Narrow the Supply Base H. Fuller Corporation illustrates how first-hand...
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Procuremet and Sourcing Course Case Study: H.B. Fuller Uses Supplier Visits to Narrow the Supply Base

H.B. Fuller Corporation illustrates how first-hand information gained through supplier visits plays a large part in narrowing the supply base. Latin America sourcing manager Roy Calderón of H.B. Fuller narrows down his list of suppliers by obtaining first-hand information. Whenever possible, that means touring supplier plants and interacting with the supplier's staff.

 

"I have a technical and manufacturing background, so I first try to understand the logistical and manufacturing capabilities of a supplier, as well as their quality assurance process and systems," says Calderón. What he sees at a supplier's plant helps him determine how much H.B. Fuller, headquartered in St. Paul, MN, can expect from that supplier in the way of consistent quality.

 

Calderón scrutinizes the plant's infrastructure as well as its production staff. "Morale and work environment is hard to put into hard numbers or dollars, but it needs to be part of a supplier's intelligence profile," he says. Though he can't visit every single one of his suppliers, he makes a point to visit at least the top 10 suppliers in his region.

 

When visiting a supplier, Calderón looks for any signs in the facilities that might signal future supply problems. For example, if a machine looks like it might wear out or if the plant seems like it's falling apart, he takes notice. He also inspects production line pacing as another indicator of a supplier's health. If a supplier is too busy and overloaded, it might not be responsive enough to any order changes. If it is too relaxed, it might not be economically viable for much longer. Neither extreme is encouraging, Calderón says.

 

Another crucial component of supplier health is the attitude of employees on the plant floor. Calderón wants to see if they seem motivated or happy. He'll speak with employees about nontechnical topics, even just to ask them how they're doing, and gauge their reaction. If the workers seem to be proud of their work, it's more likely that supplier will provide a consistently high-quality product.

 

Although some suppliers might want to keep Calderón in the board room offices, he insists on the broader picture. "If all I see are fancy offices and the suppliers aren't willing to show me their manufacturing process and let me talk to their employees, that's a big question mark," he says.

 

1.     Explain why it is important to collect first-hand information especially by visiting the supplier's production sites during the supplier selection process.


2.     Based on the above case study what are key areas that sourcing manager Roy Calderón of H.B explored during his visit to the supplier's site.


3.     Do you agree with Calderón for insisting on visiting the production plant rather than having meetings at the board room? Explain why or why not.


4.     List down other potential factors that Calderón can use to evaluate the suppliers.

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