Hudson Fabricators is a small fabrication firm that was founded in 1976.

The company
acts as a supplier and produces platforms, supports, frames, hoppers, and light building steel.
Hudson Fabricators customer base consist mostly of major companies located around central
Ohio, however they also ship parts to various companies across the globe. Although they are not
large in size, the company is profitable and has some well-known clients such as: Rockwell
International, Anheuser-Busch and Marzetti Foods. The main problem in this case study is that
Hudson Fabricators, as currently constructed, has issues in their Purchasing Department that are
of major concern. The rest of this paper will discuss how the company should go forward in
addressing this issue.
As currently constructed, the company operates in a job-shop environment and has 12 full
time employees which, based on levels of production, can expand to up to 40 employees.
Because of this job-shop structure the company is not able to purchase material in large enough
quantities. In an attempt to account for this the company has negotiated with a steel broker to get
the price based on the annual usage of steel rather than on an individual order. The issue with this
is that they currently arent able to forecast their annual usage. Moreover they arent even able to
tell what their workload will be 2 months in advance. Simply put their forecasting system or lack
thereof does not work. The rest of this paper will discuss how the company should go forward in
addressing this issue.
Furthermore, because of their nature of work in supplying key products to major clients,
Hudson Fabricators is certified by the American Society of Mechanical Engineers (ASME).
Since the company is ASME certified they must meet the requirements of ASME. ASME
requirements state that the company must produce certain information to the society, and
mandates that whatever steel is purchased by them must be chemically tested to meet ASME
code. If they do not meet these standards the company can lose their ASME certification. In light
of this, uses a third party to inspect their materials and spends $3,000.00 to $5,000.00 every three
years for an ASME audit.

Florida Agricultural and Mechanical University

School of Business and Industry

Strategic Purchasing and Supply Management

Case Study: Hudson Fabricators Inc.
Prepared by:
Camrron Hughes
Prepared for
Dr. Sutterfield
MAR 5465
September 26, 2016