Abstract:
The case describes the evolution of a global multi-tiered supply chain involving one of the world’s largest automotive original equipment manufacturers (OEMs), its tier 1 supplier — Automek, a U.S.-based global corporation — and the tier 2, tier 3, and tier 4 suppliers based in India.
With Automek’s engineering support, India-based Agile Electric had successfully developed many parts for the OEM in the past. Based on this experience, Automek buyers placed an order with Agile for a new product — an actuator assembly. In developing this product with little support from Automek, Agile was concerned due to its lack of knowledge concerning the suppliers for the actuator assembly components and the critical requirements. To allay its concerns, Automek promised to locate suppliers and assess and validate the suppliers based in India. Agile then invested in the assembly line and developed the actuator assembly. When supplies started, the OEM reported many quality problems, traceable to the tiered suppliers.
Along with quality and parts supply issues, the issues of subsequent liability in the case of a recall by the OEM were faced by members of the supply chain. Agile felt that since Automek had selected or approved the suppliers, and since Agile had had no original product expertise, that Automek should take responsibility for resolving the quality problems.
Keywords:
Global Sourcing, Supply Chain Management, Quality Management, Cross-cultural Differences, Developing Countries, India, Agile Electric Quality Issues in a Global Supply Chain Case Solution
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