Written Analysis:

DRW
Technologies
Written Analysis:
DRW Technologies
Written Analysis:
DRW Technologies
Group 8 (Section 2)
DM23255 Hardik Dube

DM23227 Pavan Balakrishna

DM23254 Anjali Ojha

DM23234 Rohan Jamuar

DM23224 Kritika Jain

DM23249 Vigash Dharrsan

 Executive Summary

DRW Technologies, a defense and aerospace company in U.S., is facing a drop in demand and the
dire need to lower cost. Claiborne, the new Vice President of Procurement, put up a new purchasing
policy in place requiring procurement managers to get contracts of $250,000 or more cleared by
him. However, the managers do not submit new contracts.

To resolve problem, the new purchase policy should be suspended for the time being. Claiborne
should visit the plants or meet the procurement managers to resolve the problem. Claiborne should
make decision after consulting with the plant procurement managers.

Case Synopsis
 DRW Technologies, a defense and aerospace company in U.S, is facing a drop in the
demand and urgent need to lower cost.
 Dagmar Hilgard, first woman CEO of DRW Technologies, hired Ed Claiborne as the Vice
President of Procurement. Claiborne’s appointment was announced through a press
release on the website and in an email by Corporate Human Resources.
 Charles Suh, CFO of DRW Technologies, feels that Claiborne won’t be able to adapt to
DRW culture.
 Hilgard emphasized that Claiborne’s chief concern should be cutting costs.
 Claiborne introduced a new purchasing policy requiring plant procurement managers to
get contracts of $250,000 or more cleared by him. He ignored Lopez’s recommendation
to visit the plants and introduced the new policy.
 The responses by procurement managers were short and typical. However, no contracts
were submitted by the plant procurement managers even so the plants were busy.

Situation Analysis

 Lack of co-ordination between

-Dagmar Hilgard, CEO and Charles Suh, CFO:
-Ed Claiborne, VP of Procurement and Plant Procurement Managers.
 Ed Claiborne came from an organization that was hierarchical with absolute chain of
command and so he was not able to adapt to the culture of DRW Technologies because
DRW Technologies was de-centralized organization where each plant worked
autonomously. Claiborne introduced a centralized purchasing policy at a time when all
the plants were extremely busy because of backlog of orders. The plant procurement
managers did not get enough time to understand the new policy change.
 Improper research to set the contract value at $250,000. Claiborne studied the cost of
materials for 10 plants out of 21 and for previous year only. Claiborne did not consider
the operational inefficiencies that the plants might face because of the change in the
purchasing policy.
 Problem Statement
One major problem that was of "cutting down costs" of the company due to anticipated decline in
the budget allocated to US defense. Moreover, the central most and major plant of DRW
Technologies, though had a lot of major tasks on hand, wasn't profitable. They were required just to
maintain strong relationships with their loyal customers.

The hiring of the Ed Claiborne was not suitable to company conditions, the culture of old and new
organization was different which carried out the incompatible approach towards managing plants
and lack of communication while implementing new policies having many loopholes at various
levels.

Another problem that needs to be addressed is the procurement executive's seriousness towards
their work. It is presented in the given case that Claiborne didn't feel it necessary enough to meet
the heads of the sub-plants even though that would have resulted in better bonds and the heads
agreeing and working on submitting the contract at least 2 weeks before. Even when Claiborne
wanted to discuss his idea and implementation plan with Hilgard, she brushed it aside and asked
Claiborne to proceed ahead with whatever he has in mind.

One last problem that needs to be worked upon is that even though when plant procurement
managers agreed on mail to forward Claiborne the details of contracts above $250000 at least 2
weeks before, no such submission came to Claiborne even in the next several weeks.

These are some of the instances in the provided case which highlights the problems that needs to be
addressed.

Solution Options
The following options could be considered to solve the problem of declining profit:

 Option 1 The company can assign a mentor to Ed Claiborne, VP of Procurement. Mentoring

Claiborne can help him in adapting the culture of DRW technologies and gaining trust of the
plant procurement managers.

 Option 2 Claiborne should pay a visit to at least the major plants and meet the plant
procurement managers and call a general meeting of the procurement managers from all 21
plants to consult with them on the new purchasing policy.

 Option 3 Claiborne can implement the new policy by making the plant procurement
managers more accountable.

The corporate headquarters of DRW technologies has many major tasks to be operated
upon and they are not profitable as well. Some tasks such as marketing, sales, handling
relations etc. can be passed on to the sub-branches of DRW technologies. The work being
 evenly distributed will bring out productivity more efficiently and hence the problem of
many backlogs or pending orders can be worked upon.

Key Decision Criteria for Evaluation

The key decision criteria for evaluation of solution options are:

1. Ensure Effectiveness
2. Time taken to implement
3. Ease of implementation
4. Cost of implantation
5. Impact on Organization

Evaluation Of Options
Key Decision Criteria
Cr 1 Cr 2 Cr 3 Cr 4 Cr 5
O Op 1 Improves Slow, long Not easy, Huge cost Great, long-
P significantly drawn requires lasting impact.
T involvement.
I Possibility of
O ego clash
N because of
S Claiborne’s
dictatorial
behaviour
Op 2 Improves Immediate Easy Some Good impact
substantially results additional and will lead to
cost a better
communication
strategy in
both short run
and long run.
Op 3 May worsen Immediate Easy Little cost Risky, might
the situation Results seem coercive
and rude.

Recommendations
From the above grid, option 2 appears to be the best. It states that Claiborne should pay a visit to at
least some of the major plants and call a meeting of the procurement managers from all 21 plants to
consult them on the new purchasing policy implemented by Claiborne.

This doesn’t involve long drawn plans and is therefore quick. It ensures active involvement and
initiative of the two parties who are directly impacted by the situation. It will help to improve to
improve the relationship between Claiborne, VP of Procurement, Debby Lopez and Plant
Procurement Managers.

To achieve this:

 Claiborne should focus on developing network in the organization. Claiborne needs to take
the time to understand the organization’s culture because he comes from a firm which was
hierarchical with a strict chain of command whereas DRW technologies is a decentralized
organization.

 Claiborne and Plant Procurement Managers should both try to co-ordinate. Claiborne should
try establishing network with the plant procurement managers. At the same time, Plant
Procurement Managers should communicate to Claiborne or his assistant the operational
issues they might face while implementing the proposed plan.

Action Plan
 Claiborne should visit some of the major plants and call a meeting with the procurement
managers from all 21 plants. This would enable him to understand the culture of different
plants and change his communication style accordingly.
Claiborne should try to have a face-to-face interaction with the plant procurement
managers. Video conferencing could also be done because the plants are extremely busy for
the next 4-6 months because of backlog of orders.

 Claiborne should discuss his new purchasing policy with the plant procurement managers.
This will give them a sense of responsibility and importance. Procurement managers will
therefore pay more attention to the implementation of the new policy.

 Claiborne and the management should encourage healthy competition among the plants by
rewarding the plant which achieves cost efficiency.

Contingency Plan
 Third party intervention.

 A customized purchase strategy can be developed for each plant or cluster of plants by
collecting data from all 21 plants.

Word Count: Total – 1315, Without Case Summary– 1170