Case 1-2

Brennan Bank
"We will do it for 10 percent less than what you are paying right now." Rachel Bonnell,
purchasing manager at Brennan Bank, a large financial institution based in California
had agreed to meet with Scott Kyle, a sales representative from P. Jolon Inc. (Jolon),
a printing supplier from which Brennan currently was not buying anything. Scott Kyle's
impromptu and unsolicited price quote concerned the printing and mailing of checks
for Brennan. Brennan, well known for its active promotional efforts to attract consumer
deposits, provided standard personalized consumer checks free of charge. Despite
the increasing popularity of Internet banking, the printing of free checks and mailing to
customers cost Brennan $10 million in the past year. Rachel Bonnell was the
purchasing manager in charge of all printing for Brennan and reported directly to the
vice president of procurement. It had been Rachel's decision to split the printing and
mailing of checks equally between two suppliers. During the last five years, both
suppliers had provided quick and quality service, a vital concern of the bank. Almost
all checks were mailed directly to the consumers' home or business address by the
suppliers. Because of the importance of check printing, Rachel had requested a
special cost analysis study a year ago, with the cooperation of both suppliers. The
conclusion of this study had been that both suppliers were receiving an adequate profit
margin, were efficient and cost conscious, and that the price structure was fair. Each
supplier was on a two-year contract. One supplier's contract had been renewed eight
months ago; the other supplier's contract expired in four months. Rachel believed that
Scott Kyle was underbidding to gain part of the check printing business. This, in turn,
would give Jolon access to Brennan customer names and their contact information.
Rachel suspected that Jolon might then try to pursue these customers more actively
than the current two suppliers to sell special "scenic checks" and other products that
customers paid for themselves.

Questions
1. Consider the potential impacts on the existing relationships between Brennan
Bank and its current suppliers. How should a company like Brennan Bank
evaluate unsolicited bids in light of existing contracts and relationships?
2. Evaluate Rachel Bonnell’s decision to split the printing and mailing of checks
between two suppliers from the perspective of supplier relationship
management. What are the advantages and disadvantages of this approach,
especially in terms of risk management, cost, quality assurance, and
innovation?
3. What measures should Brennan Bank take to ensure the confidentiality and
security of customer data when entering into contracts with new suppliers?
4. Discuss the importance of transparency and fairness in the procurement
process, and propose mechanisms that Brennan Bank could implement to
ensure that decisions are made in the best interest of the bank and its
customers.