Supply Chain Management Graduate Program

Purchasing & Supplier Management

SCM 5004

AFLI Part 3 Submission

Submitted To: Submitted By – Group No. 3

Professor:

Date of Submission:
Table of Contents

 Executive Summary
 Brief on Vendor A - Steel-Town Fabricators, Hamilton Ontario
 Brief on Vendor B - Music City Metals, Nashville, Tennessee, USA
 Brief on Vendor C - East Coast Metalworkers, Saint John, New Brunswick
 Reason for Selecting Vendor A
 GANTT Chart for Vendor A

Group No: 3
Executive Summary
This executive summary was created by a group of graduates for the AFLI outsourcing
selection.

- Within a month, gather the necessary business requirements for the area and our demands.

- In the next month, AFLI should be able to clearly decide which vendor will work best for the organization.

- The documentation process should be completed as soon as we decide with the vendor, and that should take no
more than one month.

- The project for AFLI should kick start within a month.

- Each step for production and quality control should be completed within a month of the other.

Gather Buss. Vendor Documentation Project kick off Production Quality check
Req. Finalization

1 month 1 month 1 month 1 month 1 month 1 month

Group No: 3
Vendor A
Steel-Town Fabricators, Hamilton Ontario
•Well-established metal fabricators. Privately held family business.

•Annual Sales: Estimated around 18$ million

•Customer base: Primarily small and medium-size enterprise. No existing customers in fitness industries.

•References: 3 local references provided all close to GTA.

•Reviews: Fair, reliable good people. Some missed deliveries but with a notice and follow up to ensure good connection.

Proximity, stable, good credit.

•Quality Programs: ISO 9001 certified.

•Production Lead time: 2 weeks

•Terms: Annual volumes below 75% of the RFP estimate result in a 10% surcharge, payable at year-end.

•Volume over 150% of RFP estimate: 5% Annual Volume Rebate (AVR)

•Order Quantity: MOQ 8 fitness machines, MOQ equal 2 units for accessories.

•Product Cost: $1975.00 per machine. $210 per accessory

Group No: 3
 Steel-Town Fabricators, Hamilton Ontario

Advantages of choosing this vendor

• In-house production in Canada

• Already well-established metal fabricators

• Good annual sales
• Nearby References
• Quality ISO 9001 certified.

• Proximity, Stable and good credit

• Transit time: 1 Day excluding pickup
• Low Shipping rates

Group No: 3
 Steel-Town Fabricators, Hamilton Ontario

Disadvantages of choosing this vendor

• No existing customers in the fitness industries

• Miss deliveries sometimes

• Product Costing is on the higher side

Group No: 3
Vendor B
Music City Metals, Nashville, Tennessee, USA
•New player in the field. Privately held diversified business

•Modern Technology

•Annual Sales: Estimated around 10 million USD and growing

•Customer Base: Southern USA Currently supply fitness equipment to sportlife a USA based competitor

•References: Four references are provided, only one in Canada. Canadian reference is less than 12months old.

•Reviews: The general consensus was positive: flexible, quality products, “pleasure to do business with”.

•Weakness: Canadian customer noted initial problems with export documentation and shipping since rectified.

•Production lead time: 2 weeks

•Terms: FOB Origin, One year deal with provisions for renewal/cancellation

•Order Quantity: MOQ 3 fitness machines, MOQ 1 unit for accessories. Order over 10 machines will have 3 weeks lead time.

•Transit time: 4 business days, excluding the day of pickup

•Product cost: 900 USD per machine 95 USD per accessory

Group No: 3
 Music City Metals, Nashville, Tennessee, USA

Advantages of choosing this vendor

• Has a raging potential as they are a new company

• Low rates of product costs

• Diversified businesses with trucking firm and DC’s

• Has positive feedback- “pleasure to do business with”

• 2 week production lead time

Group No: 3
 Music City Metals, Nashville, Tennessee, USA

Disadvantages of choosing this vendor

• High risk profile- since they are new in Canada

• Custom brokerage fees will be 75 CAD per shipment

• Prices of the shipments according to the sizes are high

Group No: 3
Vendor C
East Coast Metalworkers, Saint John, New Brunswick
•A subsidiary multimillion dollar Business empire providing full engineering and design services.

•Annual Sales: Estimated at $50 million to $75 Million CDN

•Customer Base: Majority of them are Lrving sister companies. Customer size includes both SME and larger organizations.

•Limited customers in the GTA. No existing customers in the fitness equipment industry.

•References: 5 references provided who have been customers for 5 years with positive reviews. Only weakness is they are

less flexible to last minute changes. Positive general consensus, process oriented and highly dependable.

•Transition time: Six weeks

•Quality Programs: Six Sigma Program. ISO 14001 in progress.

•Terms: No deals of less than 18 months with minimum order quantity of 80% of the annual volume figures in the RFP.

•Order Quantity: MOQ equal to 3 fitness machines ,MOQ equals 1 unit for accessories.

•Production cost: $1600.00 per machine and $150.00 for each accessory.

Group No: 3
 East Coast Metalworkers, Saint John, New Brunswick

Advantages of choosing this vendor

• Canada Based and privately held.

• Senior executive is Allstar Irving.
• Good annual sales
• Good references.

• Six Sigma Program, ISO 14001 certification.

• Production cost Is lesser comparatively.

Group No: 3
 East Coast Metalworkers, Saint John, New Brunswick

Disadvantages of choosing this vendor

• No existing customers in fitness industry

• Not flexible on last minute changes.
• Higher shipping costs.

• Transition period is more.

Group No: 3
Reasons for Selecting Vendor A
• In comparison to Vendors B & C, Vendor A's production time is shorter.
• Vendor B will cost us more in terms of custom than Vendor A because he is a reputable supplier from the
USA and not from Canada.
• Three individuals who reside close to the GTA have suggested Vendor A, which gives us confidence that he
is the best option.
• Compared to Vendor C, Vendor A costs less for shipping.
• Vendor A is an ISO 9001-certified company, making them superior to the other two vendors.

Vendor A Skid cost’s: Vendor B Skid cost’s: Vendor C Skid cost’s:

Shipment Size Shipment Size Shipment Size
1 skid $135.00 1 skid $305.00 1 skid. $185.00
6 skids $405.00 6 skids $1,100.00 6 skids $840.00
10 skids $600.00 10 skids $1,950.00 10 Skids: $1,450.00
16 skids $780.00 20 skids $3,100.00 (All in USD) 16 skids: $2,180.00

Group No: 3
GANTT Chart for Vendor A

1/1/2023 1/2/2023 1/3/2023 1/4/2023 1/5/2023 1/6/2023 1/1/2023 1/1/2023

1/1/2023

1/1/2023

Group No: 3
 Thank you

We appreciate you providing us the chance to present and discuss our points.
Please feel free to ask any questions you all might have. We will be more than happy to address it :)

Group No: 3