Need Help responding to a discussion question

Rising cost and missed delivery dates – must

One supplier for products – must

Excessive inventory – nice to

Delays at Border – must

Increased fuel cost – must

Warehouse rental for border prepare – nice to

Use of two ton truck just for Penner deliveries – nice to

Neil will have to find an alternate reliable supplier because the one they are working with is causing them to lose money instead of adding value to the company. Having a good supplier is important because Penner’s main objective is to sell medical supplies to their customers. If they can not get the supplies on time, it could disrupt their customer base. Part of the problem is improper paperwork at the borders. He will have to fix this by having a customs broker in place to handle shipments coming across the border. He will have to fix the increasing fuel cost and time consuming trip by hiring a transportation company. This will likely redirect funds and free up the two ton truck to focus on the local deliveries. Neil will likely let the customs broker and the transportation company handle the facility for staging to prepare for border crossing. These specialized brokers are skilled in getting the proper paperwork and shipments across the border.

I think Neil should initiate a penalty against the Stinson Distribution in upcoming contract talks. They are causing Penner to lose money because they are not performing their end of the bargain. Some pros of that would be that Stinson does not continue to perform this way on future contracts and they take it as a wakeup call to do better. Another pro would be that they could end the contract and find a more reliable company. Some cons of this action would include the company providing worse service to further sabotage Penner. Another con would be that this is the only supplier for this type of product.