Water Heater Case Study?

thw022002 · 2006-01-07T20:53:15+00:00

The bellow is a case study! About 13 years ago, I was working as a technical engineer with a subsidiary company of Wembly Industries. One day, I received a call from Mr. Chai of AVC engineering, asking me to quote on fabrication of 4 units of stainless steel water heater. These water heaters are to be installed at one of the offshore platform. Based on the specs, I quoted a price of RM 200,000/unit. The estimation is based on SS316 materials. Delivery shall be made 3 months after awards of project. Mr. Chai like my quotation. So the project was awarded to my company! I was very happy. I got my first project!!! After 2 days, Mr. Chai called me and ask how much would be the price difference if the materials were changed from SS316 to SS316L. I checked the price and advise that it will cost him an extra RM20,000/unit. Mr. Chai is negotiating…. Mr. Chai is negotiating…. Mr. Chai is negotiating…. At the end (after almost 2 months) he agreed & asked me to start the fabrication. After the called, I initiated the project. Order materials and starts the fabrication. 1 week after that, Mr. Chai called me again. He asked me when can I deliver the water heater. I said it should be 3 months after he change the material from SS316 to SS316L. He said, that will be too late. Client want the item in 6 weeks. Otherwise the helipad cant be installed!! I told Mr. Chai, it is impossible to deliver the item in 6 weeks. Please tell your client. The next day, Mr. Chai called me. He said the main client want to meet everybody in their office. It turned out there are 3 other companies involves; Shell Sime Sembawang GE Engineering AVC Engineering Wembly Indusrties Question: If you were me, what would you do?

Water Heater Case Study?

thw022002

Member

Updated: Oct 25, 2024

Views: 1.3K

The bellow is a case study!

About 13 years ago, I was working as a technical engineer with a subsidiary company of Wembly Industries.

One day, I received a call from Mr. Chai of AVC engineering, asking me to quote on fabrication of 4 units of stainless steel water heater.

These water heaters are to be installed at one of the offshore platform.

Based on the specs, I quoted a price of RM 200,000/unit. The estimation is based on SS316 materials. Delivery shall be made 3 months after awards of project.

Mr. Chai like my quotation. So the project was awarded to my company!

I was very happy. I got my first project!!!

After 2 days, Mr. Chai called me and ask how much would be the price difference if the materials were changed from SS316 to SS316L.

I checked the price and advise that it will cost him an extra RM20,000/unit.

Mr. Chai is negotiating….
Mr. Chai is negotiating….
Mr. Chai is negotiating….

At the end (after almost 2 months) he agreed & asked me to start the fabrication.

After the called, I initiated the project. Order materials and starts the fabrication.

1 week after that, Mr. Chai called me again.

He asked me when can I deliver the water heater. I said it should be 3 months after he change the material from SS316 to SS316L.

He said, that will be too late. Client want the item in 6 weeks. Otherwise the helipad cant be installed!!

I told Mr. Chai, it is impossible to deliver the item in 6 weeks. Please tell your client.

The next day, Mr. Chai called me. He said the main client want to meet everybody in their office. It turned out there are 3 other companies involves;

Shell
Sime Sembawang
GE Engineering
AVC Engineering
Wembly Indusrties

Question: If you were me, what would you do?

0

Replies

Howdy guest!

Dear guest, you must be logged-in to participate on CrazyEngineers. We would love to have you as a member of our community. Consider creating an account or login.

Replies

Sam

Member • Jan 9, 2006

Some discrepancies

Dear Sir/ma'am,

My comments below may seem rude, i in now way mean to sound condescending. This is in context to the written paragraph -

Firstly - there are 5 companies in the list.

Secondly - if this was a real situation, why didnt you mention it to Mr. Chai when he wanted to changed from SS316 to SS316L that it would take 3 months from the DATE OF PO GENERATION to deliver the heaters. If Mr. Chai was aware of this and was negotiating for 2 months over the change of the material - the project should have been halted then and there.

As i assume, some money must have been paid to your company and hence the company decided to go on with the manufacturing, ELSE you didnt pass on this 2 MONTH NEGOTIATION DELAY with Mr. Chai to the management of your manufacturing firm. In either case - Manufacturing of the product would start with a committment on paper. This written contract is leagally bound between the 2 parties and Change of Control attracts a penalty from the issuing party.

On the Whole - it seems there was a serious communication gap and in the zest of closing your first business, the deliverables werent clearly mentioned in the Contract agreement resulting in such a lapse.

It is evident Mr. Chai went to the client and blamed your manufacturing firm for this lapse. If i were you - i would walk in to the meetign with a clear conscience. I would make the entire episode rather clear to the client . I would take all the correspondences (in print) to the meeting to ensure the client that the fault doesnt lie with our manufacturing firm.

A ceratin level of diplomacy coupled with humility and Firmness should help retain the client.

Best,
Sam

Are you sure? This action cannot be undone.
Cancel
thw022002

Member • Jan 13, 2006

Water heater Case!

Thanks Sam!

I will consider your ideas!

Thanks for giving me comment!

Are you sure? This action cannot be undone.
Cancel
s_mankotia

Member • Jan 14, 2006

The bellow is a case study!

About 13 years ago, I was working as a technical engineer with a subsidiary company of Wembly Industries.

One day, I received a call from Mr. Chai of AVC engineering, asking me to quote on fabrication of 4 units of stainless steel water heater.
just for the sake of knowledge (and because i like 2 meddle in other ppl business) if this thing happened 13 yrs ago then wat do u mean by

i'll consider your ideas!!

Are you sure? This action cannot be undone.
Cancel
thw022002

Member • Jan 14, 2006

because this is just one of my homework case study!

But it is a real case of my lecturer!

Are you sure? This action cannot be undone.
Cancel
Sam

Member • Jan 15, 2006

Lighten up guys ... here's another one for your grey cells

Common guys - lighten up. No use fighting...

Let me share another Case study for all of you -

You are driving a 40Lakh Merc and on a red light - some crazy kid tries to overtake you and rams into your car.

In a short and simple way - Describe your next course of action. Please keep it precise so i can give you a feedback.

Best,
Sam

Are you sure? This action cannot be undone.
Cancel