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Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim
Edition 14ISBN: 978-0078029110Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim
Edition 14ISBN: 978-0078029110 Exercise 21
The Purchasing Department
The buyers for a large airline company were having a general discussion with the manager of purchasing in her office Friday afternoon. The inspection of received parts was a topic of considerable discussion. Apparently, several parts had recently been rejected six months or more after being received. Such a rejection delay was costing the company a considerable amount of money, since most of the items were beyond the standard 90-day warranty period. The current purchasing procedures state that the department using the parts is responsible for the inspection of all parts, including stock and nonstock items. The company employs an inspector who is supposedly responsible for inspecting all aircraft parts, in accordance with FAA regulations. However, the inspector has not been able to check those items purchased as nonaircraft parts because he is constantly overloaded. Furthermore, many of the aircraft parts are not being properly inspected because of insufficient facilities and equipment.
One recent example of the type of problem being encountered was the acceptance of a batch of plastic forks that broke easily when in use. The vendor had shipped over 100 cases of the forks of the wrong type. Unfortunately, all the purchase order specified was "forks." Another example was the acceptance of several cases of plastic cups with the wrong logo. The cups were put into use for in-flight service and had to be used because no other cups were available. A final example was the discovery that several expensive radar electronic parts in stock were found to be defective and with expired warranties. These parts had to be re ordered at almost $900 per unit.
It was apparent that the inspection function was inadequate and unable to cope with the volume of material being received. Purchasing would have to establish some guidelines as to what material should or should not be inspected after being processed by the material checker. Some of the buyers thought the material checker (who is not the inspector) should have more responsibility than simply checking quantity and comparing the packing sheet against purchase orders. Some believed the checker could and should have caught the obvious errors in the logo on the plastic cups. Furthermore, if the inspector had sampled the forks, they would have been rejected immediately. As for the radar parts, they should have been forwarded by the inspector to the avionics shop for bench check after being received. Such a rejection delay was costing the company a considerable amount of money, since most of the items were beyond the standard 90-day warranty period. The current purchasing procedures state that the department using the parts is responsible for the inspection before the part is placed in stock. Some buyers thought the inspector should be responsible for inspection of all materials received, regardless of its function or usage. It was pointed out, however, that several landing gears had been received from the overhaul/repair vendor and tagged by the inspector as being acceptable. These gears later turned out to be defective and unstable and had to be returned for further repair. This generated considerable discussion concerning the inspector's qualifications, testing capacity, workload, and responsibility for determining if the unit should be shop-checked.
Much of the remaining discussion centered around what purchasing should recommend for the inspection of material. One proposal was that everything received be funneled through the Inspection Department. Another proposal was that all material be run through inspection except as otherwise noted on the purchase order. Other questions were also raised. If purchasing required all material to be inspected, would this demand additional inspection personnel? Who would be responsible for inspection specifications? Furthermore, who should determine what items should be shop-checked?
The meeting was finally adjourned until the following Friday.
Questions
1. What do you think of the current system of inspection?
2. Do you think the inspector is at fault? Explain.
3. What would you suggest happen at the meeting next Friday?
The buyers for a large airline company were having a general discussion with the manager of purchasing in her office Friday afternoon. The inspection of received parts was a topic of considerable discussion. Apparently, several parts had recently been rejected six months or more after being received. Such a rejection delay was costing the company a considerable amount of money, since most of the items were beyond the standard 90-day warranty period. The current purchasing procedures state that the department using the parts is responsible for the inspection of all parts, including stock and nonstock items. The company employs an inspector who is supposedly responsible for inspecting all aircraft parts, in accordance with FAA regulations. However, the inspector has not been able to check those items purchased as nonaircraft parts because he is constantly overloaded. Furthermore, many of the aircraft parts are not being properly inspected because of insufficient facilities and equipment.
One recent example of the type of problem being encountered was the acceptance of a batch of plastic forks that broke easily when in use. The vendor had shipped over 100 cases of the forks of the wrong type. Unfortunately, all the purchase order specified was "forks." Another example was the acceptance of several cases of plastic cups with the wrong logo. The cups were put into use for in-flight service and had to be used because no other cups were available. A final example was the discovery that several expensive radar electronic parts in stock were found to be defective and with expired warranties. These parts had to be re ordered at almost $900 per unit.
It was apparent that the inspection function was inadequate and unable to cope with the volume of material being received. Purchasing would have to establish some guidelines as to what material should or should not be inspected after being processed by the material checker. Some of the buyers thought the material checker (who is not the inspector) should have more responsibility than simply checking quantity and comparing the packing sheet against purchase orders. Some believed the checker could and should have caught the obvious errors in the logo on the plastic cups. Furthermore, if the inspector had sampled the forks, they would have been rejected immediately. As for the radar parts, they should have been forwarded by the inspector to the avionics shop for bench check after being received. Such a rejection delay was costing the company a considerable amount of money, since most of the items were beyond the standard 90-day warranty period. The current purchasing procedures state that the department using the parts is responsible for the inspection before the part is placed in stock. Some buyers thought the inspector should be responsible for inspection of all materials received, regardless of its function or usage. It was pointed out, however, that several landing gears had been received from the overhaul/repair vendor and tagged by the inspector as being acceptable. These gears later turned out to be defective and unstable and had to be returned for further repair. This generated considerable discussion concerning the inspector's qualifications, testing capacity, workload, and responsibility for determining if the unit should be shop-checked.
Much of the remaining discussion centered around what purchasing should recommend for the inspection of material. One proposal was that everything received be funneled through the Inspection Department. Another proposal was that all material be run through inspection except as otherwise noted on the purchase order. Other questions were also raised. If purchasing required all material to be inspected, would this demand additional inspection personnel? Who would be responsible for inspection specifications? Furthermore, who should determine what items should be shop-checked?
The meeting was finally adjourned until the following Friday.
Questions
1. What do you think of the current system of inspection?
2. Do you think the inspector is at fault? Explain.
3. What would you suggest happen at the meeting next Friday?
Explanation
Verified
Verified
1. The current system is not specific.
2...
Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim
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