He now has the opportunity to authorize the use of any X ray film other than Kodak. An investigation was complete in where Mr. Rubble had a reason to believe that the current Kodak price was above that of possible competition. There was an existing agreement with Kodak calls for furnishing X ray equipment along with maintenance and service, at a considerable discount for using Kodak as a single supplier of the X ray film. Kodak refused to provide those services if they were not their only source for X ray film. II. Major Problem Kodak has been Pacific HealthCare’s main supplier for X ray film. Now that Mr.
Howell has pasted it is Mr. Rubbles’ responsibility to either decide to keep the Kodak for the X ray film or change to a different X ray film supplier. What needs to be kept in mind is that Kodak was also offering Pacific Healthcare discounts for furnishing X ray equipment along with maintenance and service. This was all because they were their only X ray film supplier. If Pacific Healthcare switches to a different X ray film supplier they will lose those discounts. Obtaining the highest quality with the best service at the lowest price is Pacific Healthcare’s supply strategy for medical supplies.
Their objective is to find a single source supplier for a one year contract. III. Possible Solutions A. There are four other companies that make X ray films DuPont, Agfa, Fugi, and 3M. The quality of DuPont and Agfa are consistent with Kodak. Mr. Rubble can choose to go with DuPont since it holds the standard of Kodak and cost less than Agfa. The price of DuPont $1. 50 per sheet of X ray film. B. There are four other companies that make X ray films DuPont, Agfa, Fugi, and 3M. The quality of DuPont and Agfa are consistent with Kodak. Mr. Rubble can choose to go with Agfa since it holds the standard of Kodak.
The only real issue I see here is that there is another company that makes the same quality of X ray film than both Kodak and Agfa. DuPont make the same quality of film for a lower price. The price of Agfa is $1. 58 per sheet of X ray film and DuPont offers it for $1. 50 per sheet. C. Mr. Rubbles can choose to stay with Kodak. The price for Kodak is higher than the other competition but they give Pacific Healthcare discounts on other services. Kodak furnishes Pacific Healthcare with X ray equipment, along with maintenance and services at a substantial discount for using Kodak as a single supplier for X ray film.
I have found three issues with this possible solution. One, I do not know how much of a discount they are getting for the X ray equipment, along with the maintenance and services they are receiving from Kodak. With that I also need to know how much the competitors are willing to give Pacific Healthcare for those additional services that Kodak is offering to them. Last, but not least there are other competitors that are at a lower price range with the same quality as Kodak. DuPont offers their X ray film for $1. 50 per sheet and Agfa offers theirs at $1. 8 per sheet. Kodak is charging Pacific Healthcare $1. 80 per sheet of X ray film. With this solution we have to keep in mind that Pacific Healthcare uses approximately 1,500 sheets of X ray film per day. That is approximately $2,700 per day. If Mr. Rubbles chooses to go with DuPont which is the same quality as Kodak that would be approximately $2,250 per day. By choosing DuPont Pacific Healthcare with be saving about $450 a day. That is $3,150 per week and $12,600 a month by switching to DuPont. That is a huge saving for Pacific Healthcare.
Pacific Healthcare can save money as well as keeping the same high quality as Kodak. IV. Choice and Rationale After reviewing all of the possible choices I chose to go with choice A. I chose A, because it saves Pacific Healthcare a lot of money as discussed in choice C. By choosing DuPont the company would save $450 a day compared to Kodak. That is $3,150 per week of savings and $12,600 a month by switching to DuPont. Also in choosing Agfa which is the same quality as Kodak, Pacific Healthcare would save $330. Keep in mind that Agfa and DuPont have the same quality as Kodak.
Why choose Agfa over DuPont if they have the same quality of X ray film? That is why I chose DuPont. It is a smart solution, because it saves Pacific Healthcare money while also keeping the same quality as Kodak. Moving on two the other choices Mr. Rubble has. In the beginning I mentioned that there were four competitors that offered X ray films at a much lower rate than Kodak. The competitors were Agfa, DuPont, Fugi, and 3M. I have discussed Agfa and DuPont. The reason for not adding Fugi and 3M to my possible solutions is because Pacific Health care wanted to keep the same high quality in X ray film.
Even though Fugi and 3M met minimum requirement they were thought of as having lower quality. Pacific Healthcare was looking for obtaining the highest quality with the best service at the lowest overall cost. To me they did not meet the requirement of Pacific HealthCare’s goal. V. Implementation I would let Pacific Healthcare know of my overall decision. In this brief, I would brief all my possible choices I had and why I chose to go with my choice. If we are in agreement my next step would be to contact DuPont and request their service for X ray film.
From there I would let Kodak know that we appreciate their business, but we no longer are in need of their X ray film service. Of course I would make sure that DuPont has agree to be our single source supplier for X ray film prior to finishing the contract with Kodak. Appendix A What alternatives should Barney Rubbles consider when addressing the problem? Barry Rubbles should consider the high quality that Pacific Healthcare would like to keep as well as the best service with overall lower cost. He should consider which one would give the overall high quality as well as trying to save money.
Should Pacific’s’ supply policies allow for any medical staff personnel to control sourcing decisions? In my personal opinion no, because they may not have the proper training or know what the companies needs are. I would like the professionals handle that. This case does not show a good example, because Mr. Howell chose the highest competitor. I would definitely have had both Mr. Howell and Mr. Rubbles work together. Sometimes one may come up with a different solution. What are the advantages and disadvantages of staying with Kodak—or changing suppliers?
How would you evaluate these? If the Pacific Healthcare would stay with Kodak they could keep receiving their discount for the other services that Kodak provides. This includes the X ray equipment, maintenance and, service for being their only source for X ray film. Like previously stated, I am not sure exactly how much that discount was. Nor did I know how much the competitors were willing to give those services to Pacific Healthcare. With changing suppliers Pacific Healthcare would definitely save a lot of money. This would include changing to DuPont or Agfa.
With DuPont the company would save $450 a day and by switching to Agfa the company would save $330 a day. Mr. Rubble has to keep in mind that both have the same quality of X ray film as Kodak. What action could Mr. Rubble have taken prior to Mr. Howell’s death to obtain reduced film prices? Mr. Rubble should have conducted a research just like he did when they put him in charge of the X ray film ordering. He should have presented this information to Mr. Howell and if he had disagreed Mr. Rubble should have taken it up to the company.