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  • thw022002
    thw022002

    Member • Jan 7, 2006

    Water Heater Case Study?

    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?
    Replies
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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
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  • thw022002

    Member • Jan 13, 2006

    Water heater Case!

    Thanks Sam!

    I will consider your ideas!

    Thanks for giving me comment!
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  • 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!!
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  • thw022002

    Member • Jan 14, 2006

    because this is just one of my homework case study!

    But it is a real case of my lecturer!
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  • 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
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