AVION, INC

1. What initially appears to be the problem? What really is the problem(s) in this case?
The problem initially appears to be lacking of material quality and delayed delivery caused
by the poor performance and communication from the supplier, Foster Technologies. The real
problem in this case is caused by extremely poor planning, ineffective communication, lack
of alternative supplier sources and unsuitable organizational structure within Avion, Inc.
The real problem is that the Avion is requesting production quantities higher than Foster
Technologies capacity, faster than the previously agreed lead time, and Avion is making
changes at the last minute to the material release quantities. In addition, there is an overall
lack of communication across the board, but particularly between the buyer and the supplier.
It is possible the buyer has a poor forecasting system that created the initial demand figure
problems.
2. Who are the key stakeholders in the case? If this is going to be an ongoing problem of
increased sales, what other stakeholders might you consider talking to?
Key Stakeholders in the case as follows
 Production Management, Foster Technologies
 Procurement Management, Avion Inc.
 Production Management, Avion Inc.
 Materials Management, Avion Inc
Sales Department of Avion and also the Scheduling Department of Foster are the other stake
holders who we can talk to if this problem is going to continue.
The key stakeholder is the production manager. If the quantities are truly higher than
forecasted, it would be important to talk with other stakeholders in the business such as the
demand planner/forecaster and possible someone in Sales/Marketing to get a true picture of
demand.
3. Develop an action plan for Avion that addresses the issues presented in this case.
 Susan should work with Avion’s production group regarding monthly projected
volumes, delivery time frame, and requirements about altering final material release
quantities.
 Bill should begin identifying alternative suppliers, in case contract with Foster does
not continue.
 Kevin should work with foster’s production manager, firstly, to establish a sincere
communication; secondly, address issues written in the memos and letters from the
production manager and seek solutions; thirdly, discuss about next step to take and
future production volume.
 Avion, Inc. should redesign management and structure within its organization, to
prevent similar problems in the future.
Step 1: Quickly go meet with the production manager to determine the scope of the
problem and determine if it is real, or just a knee-jerk reaction to fluctuating
requirements. Need to get the facts around the problem.

Step 2: Meet with the supplier, hopefully with the production manager (as he is your
stakeholder) to develop a plan to rectify the short-term problem. Can the supplier ramp-up
production from current 2500 to 3500/month quickly and maybe 4000/month through
adding X more shifts or maybe overtime. Although the 2 weeks lead-time looks fixed,
maybe Avion & Foster could work together on ways to reduce that lead time.

Step 3: The procurement department has to take a lead in improving the overall
communication problem. Develop a robust protocol and get buy-in from all affected
parties and implement immediately.

Step 4: If the procurement buyer and the production manager don’t feel this issue can be
rectified with the supplier, and/or Foster does not want to do business with us after the
contact expires, Avion should start developing second source. While we don’t know how
quickly this can be done, we have to assume that it will take some time, so it is imperative
Avion works with Foster to correct the problem in the short-term.