Agile Electric: Quality Issues in a Global Supply Chain
The complete recall or field failure together with the associated cost should not be charged on the tiered suppliers. Firstly, they were forced to supply items that were not part of their production. Therefore, they never had the technical expertise on the production of these items. It is also important to note that Automek had a hand in the reported failures of the product simply because they sent their engineers to take part and oversee the production process (Richard Ivey School of Business 2).
Moreover, it is also reported that Automek was aware of the dangers involved in their alliance with Agile Electric. However, Automek defied all the odds but decided to continue with their newfound association simply because of the financial reasons. Automek knew from the beginning the possible consequences of their relationship but decided to continue because the deal seemed to be very economical (Richard Ivey School of Business 3).
Additionally, Agile Electric is not to be charged on the issue of tiered suppliers because it is alleged that the capacitors that are behind the problem was not their product. Interestingly, the capacitors were procured from a source that was recommended by the Automek. Unfortunately, Agile Electric had no control of that United States of America based source. Though it is the responsibility of the supplier to ensure that their products are of high quality that are to the satisfaction of the customers, the case of the Automek cannot be blamed on the Agile Electrical. This is because; Agile Electric has a culture of testing its products thoroughly before allowing it to leave their promise. As a result, there are high chances that the faultiness of the reported capacitors does not originate from their company. However, chances are there that a downstream customer failed to install it properly or failed to use it as recommended (Richard Ivey School of Business 6).
It can be argued that the decision of the Automek to source from the Agile Electric was a good for the business. Every business organization dream of making a profit, however, in order to make profit the cost of production has to be low. One of the ways of reducing the cost of production is to source for a supplier that produce high-quality products at a reasonable price. Agile Electric offered that chance and there was no way that Automek was able to turn it down. Therefore, Automek made the right decision to source for the Agile electrical (Zadelhoff 541).
In addition, Automek did not just rush in making the decision of collaborating with the Agile Electric. However, they first sent their technical teams to assess the potentiality of the Agile. Their technical team was satisfied with the capacity and the quality-oriented culture of their newfound supplier. Therefore, Automek did not make the wrong decision by agreeing to accept Agile Electrical as their suppliers (Weil 90).
Agile made the right decision in accepting the contract. This is because the deal was very lucrative for business reason. Firstly, the contact offered Agile Electric to expand on the global front and to improve their revenue. Global expansion is one of the main objectives of any ambitious business organization (Weil 90). Therefore, Agile being very ambitious could not turn the contract down but to accept it. Secondly, Agile got an opportunity to do business with one of the reputable global organization. As a result, they saw this opportunity as a way of building their reputation in the global front with the aim of displaying their brands globally (Loomba 196). Therefore, Agile made the right decision of accepting the contract.
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