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W12056

AGILE ELECTRIC: QUALITY ISSUES IN A GLOBAL SUPPLY CHAIN

Dhruv Dar, Sanjay Kumar and Vijay Aggarwal wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of …show more content…

As it was in Automek’s interest to see that the product was developed successfully, it deputed its engineers to work with Agile engineers for the development. The teams worked together to set up the manufacturing line to produce the product as per Automek’s requirements. The product was successfully launched and Agile continued to supply with zero defects or delivery defaults. Based on the track record, Automek increased its sourcing from Agile by giving it more business. To ensure success, Automek continued to support the development at Agile by deputing its engineers to offer support in setting up Agile’s manufacturing lines. Due to Agile’s attractive pricing, more and more Automek plants in different countries started buying these parts from Agile. It eventually became a preferred supplier of Automek for electrical parts, was often quoted as an example of a low-cost high-quality sourcing model by the Automek global procurement organization and was showcased as an example of India’s manufacturing capabilities by Automek’s India-based procurement team.
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Company records.

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Automek buyers were planning to source an actuator assembly from Agile. The supplies were to start in 2008, with the projected requirements being 50,000 units for the first year and increasing to 100,000 and 220,000 units in 2009 and 2010, respectively.
Development of Actuator Assembly at Agile

Automek’s Sourcing Decision Tom Smith, Supplier