Business marketing Columbia industries Inc.
Business Marketing Columbia industries, Inc.
Introduction
Buying centre organization are the people who participate in a decision making process within an organization. They are also known as the Decision Making Unit, as they are concerned with undertaking an analysis that will lead to a an effective decision that will meet the demands of an organization or project (Johnston & Bonoma, 1981, p. 143). In this context, Columbia industries, Inc. is considering to acquire seven forklifts for the essence of transportation of products to and from the industry and warehouse. Therefore, the company has to come up with a strategy that will view five proposals from five different suppliers. This will include a group of key potential and component operation managers within the organization who will evaluate the proposals and come up with an effective recommendation, which will be submitted, to the general manager.
Potential buying centre organization
The potential members who will undertake this process include plant engineer, plant manager, industrial engineer and Vancouver and head mechanic. These people are vital in the decision making process as they hold higher positions in the organization and are conversant with the procedures that take place within the industry. According to the Columbia industries, Inc. plant operations manager they needed seven more forklifts for safety precautions. For example, there was an incident where the current forklifts almost cost a life of an employee. In addition the company had experienced a lot of loses as the company could not meet the demands of their consumers due to poor transportation. Therefore, these are some of the factors that contributed towards the need for more forklifts.
Alternative models for buying center organization
Buying centre organization is entitled to have different models of addressing the issue of buying new forklifts. The models should involve identifying a potential supplier who can provide quality products, affordable products, ease of access of spares of the forklift in question, size of the forklift as compared to the price and many more. When a Decision Making Unit analyzes the products in terms of quality, they base their argument on maintenance.
A good quality forklift will manage to work well for a longer period. However, its maintenance in terms of service done on it to make sure that it works properly plays a huge role in its maintenance. For example, Columbia industries, Inc. serves many consumers within Canada. Therefore, in order to meet the demand of all these consumers, the company is expected to have efficient transportation. However, due to insufficient transportation vehicle, the distributors and most supply houses could not meet their target goals in terms of delivery. The reason being that, some forklifts could carry more than their capacity in order to deliver the required amount to various distributors (Hanson, n.d. para10). This leads to their breakdown and more costs used to maintain them. However, if the company can add more forklifts that carry more products than the previous ones the company will be able to meet the demands of its consumers and eventually increase its sales and profits.
Investing in affordable products is also a model that can be used to determine if purchasing more forklifts will be efficient in meeting the company’s goals. The reason being, the company has spent a lot in trying to maintain the current forklifts and other transportation devises. Therefore, it is advisable to invest money wisely by purchasing affordable forklifts but basing in mind that they are of good quality. The company should be in a position to get reasonable insurance so that they may replace any of the seven newly purchased forklifts malfunctions before the products guarantee expires.
Another important aspect to consider while trying identifying a potential supplier is the ease to access spares of the forklifts. Some machines are powerful and very efficient, however, in case the machine breaks down it will take the company a long time and expense to get the spares of that machine. This concept also applies for the forklifts. There are different makes of forklifts and models. For example, one of the old hyster lift trucks used within the company broke twice within three months. It took ten days to get access to spares that could put the truck back to work. This means that some customers could not get their full order and other clients found the Columbia inc. inefficient in terms of delivery (Hutt & Speh, 2012, p.463). Therefore, before the team decides on which one to purchase they should be certain that the supplier could guarantee those spares in case of any breakdown.
The size of the forklift as compared to price is an important model to consider while addressing the issue of purchasing seven forklifts. As said earlier, the forklifts being used by company were less efficient in meeting consumer demand. This means that the seven being bought should be big and strong enough to be able to handle the heavy ceramics and pipes. They should be big enough to move around the warehouse as they arrange the products for storage and distribution to tracks that distribute them to other small suppliers. The forklift should be in a position to maneuver easily around the warehouse. This factor is vital, as it will determine how fast the forklift can move while distribution is done. Therefore, when all these alternatives are considered the decision-making unit will have the opportunity to choose the best candidate among the five suppliers to be.
Key members of the buying center at Columbia industries
Whenever there is, a group decision there should be representatives who are connected to the problem are situation at stake. In this case, the Key members of the buying center at Columbia industries include plant engineer (Ms Sadra Ogrosky), plant manager (Mr. Jacques Debre), industrial engineer (Mr. Smart West), and head mechanic (Hutt & Speh, 2012, p.463). These people are responsible for decision making, as they are professionals in the various positions that are responsible for the transportation and distribution of the products. Among these four, the one who has the higher influence on purchase decision is Mr. Smart West who is the industrial engineer. Mr. West has worked with the industry for 5 years. Initially, he worked with other industries as an industrial engineer. Throughout that time, he got vast experience in that position. Mr. West is responsible for the efficient allocation of machinery and other equipments like the lifting trucks. In addition, he is accountable for analyzing the financial cost that is related to equipment justification and the general capacity of planning (Hutt & Speh, 2012, p.463). Considering the responsibility he has on financial analysis, it gives him a higher influence to decide on the purchase. In every company, it is important to consider the cost that will be incurred before making a purchase decision. In the case of Columbia Industries Inc, they experience frequent downtime due to breakdown of machines. The high cost of maintenance also takes a large share of the company’s revenue, thereby increasing costs. Therefore, it is upon the financial analyst to determine the purchase decision, as he is aware of the financial status of the company in detail. In addition, through his vast experience in product justification, he will be in a better position to justify the most appropriate forklift depending on the company’s financial status.
Needs of Columbia Inc.
Columbia industries Inc. has had several issues with distribution and storage that has cost it a lot. There is a situation when the company had to spend over $ 4000 to repair an old broken truck lift. In addition, an extra $ 2000 was incurred when rebuilding a transmission of another lift track. Having such kind of problems may make a company lose potential customers and if caution is not taken fast, the company can run bankrupt. Therefore, there are several needs that Columbia Industries Inc. has to address before it decides on the kind of forklift to purchase.
Initially Columbia Industries Inc. has had issues with service delivery. Their machines have been having breakdown due to their inability to handle heavy products. Some were too old that they can break down anytime and therefore they were not reliant at all. In this case, before the buying centre makes any decision on purchase of the seven forklifts they should consider brands of forklifts that are durable depending on the nature of work they will handle. It is better to buy three expensive durable forklifts than purchase seven cheap once that will involve many expenses to repair them after every three months. In addition, when the company purchases durable forklifts, they will reduce on wastes and expenses and in the end, the company will be assured of proper distribution and the clients will increase their demands depending on the market structure (Purchasing strategies, n.d., p.25). The company can purchase products that are returnable and have a guarantee so that if they fail to meet the expectation of the consumer, the company can replace it without creating commotions.
Columbia industries Inc. need reliability and quick service. This issue has been bought by the downtime. The downtime effects come about due to frequent breakdown of machines. This affects the level of distribution, as the machines may take long to be repaired. As earlier said some trucks can breakdown and accessing their spares can take a long time. When a machine fails to work, it will affect the production of products. For example, in case a truck lift breaks down, it means that the warehouse’s storage capacity will be affected. This failure may be attributed to poor handling of machines or life span of the machine (Jones & Kato, 2007, p. 18). Storage space will reduce, as there will be poor distribution as compared to the previous days. Therefore, in case of incoming delivery, they will have to reduce manufacturing in order to sustain the storage capacity demands. All this contribute to unreliability in terms of delivery of products to desired customers. In the end, it can cost the company a lot of money as they may end up paying the client compensation because of bridging a contract.
The need to calculate downtime cost is important before any decision is made. As earlier stated, downtime refers to the time of reduced activity especially when a machine fails to perform its normal duties. In such a case a lot of costs or expenses will be incurred that will affect the revenue of the company. Therefore, the company’s financial analysis should brief the buying centre organization of the dangers they may face if they purchase forklifts that may break down frequently. It means that the company will have to spend more in repairing the trucks than make more profits. In the end, the company’s goals will be unattained if thorough maintenance is avoided. Practically it is not easy to avoid downtime costs completely. However, they can be reduced especially through proper maintenance of the trucks. The head mechanic should hold regular meetings with the employees and remind them on the importance of handling the machines with care. In addition, vocational training should be emphasized to the employees who use the forklifts to know how to handle them with care (Tsang, n.d., p.19). In the end, productivity will increase and the company will increase revenue via smooth delivery of products to respective consumers.
The need to address the issue of maneuvering within the warehouse should be considered by the buying centre organization before a final purchase is done on forklifts. There have been issues on safety matters especially to those who work with the lift trucks. They usually find it difficult to move round the warehouse due to the tight corners and narrow corridors. In case they are carrying heavy materials and other finished products, they fear that they may break in case the truck lift malfunctions or breaks. This means that the fragile products like ceramic are at stake. They can break easily and cause the company a huge loses. At the same, the products may fall on the person controlling the forklift and may injure the person. Therefore, the decision of purchasing new forklifts should be determined by the size of aisle of the company.
Types of buying decisions.
The type of buying decision include logical emotional motivation and impulsive. The buying decision is determined by the consumer behavior (Type of buying decision, n.d., para.1). Under most occasions, consumers are usually directed by emotions or impulse when making buying decisions. However, organizations consider logic while deciding on the best product to purchase. Before a buying centre organization makes a final decision on the purchase of forklifts, they should undertake several buying decisions. The decision should address the issues o f cots, reliability and quick services, problems with maneuver ability, increase in productivity and competition issue. In addition the buying decision process should involve identifying the need for seven forklifts, searching information about the forklifts, evaluating different proposals and then choosing the most appropriate Therefore, while undertaking buying decisions the company should consider the following:
According to the case of Columbia industries Inc. the buying decision is determined as logical buying decision-making. The buying centre organization should base its facts on the need of the company rather than emotional aspects. Therefore, they should evaluate the steps they take in determining the best alternative before purchasing the product. In addition, they should analyze their financial status, as it will determine the expenses they can use to purchase the forklifts without draining the company’s accounts for other important expenses like paying salaries. Therefore, the company should be able to determine the market structure before making any conclusions on what, and when to purchase the forklifts (Higgins, n.d., p. 4).
The brand of the forklift is vital while making buying decision. The product choice is the first thing to be considered before considering the brand. The brand type will determine the nature of durability and affordability (Isaac, 2009, para 2). Therefore, the buying centre organization should request samples to confirm if they are worth purchasing. In addition to the product and brand choice, the buying decision is determined by the kind of dealer the buying centre will choose. This means that the dealer must meet all the expectations of the company’s interest on the product. The forklift should be in a position to maneuver around easily without creating any risks to the person controlling it. In addition, it should be able to function well for a given period. If it does not meet the company’s demands when it has been purchased then the dealer will have to replace it or get sued. The purchasing time and amount should favor the company (Buyers decision process, n.d., p.2). The reason being, the company needs to cover up loses it has incurred due to the poor track lifts it has. Therefore, the supplier should be in a position to provide the products as soon as the transaction is done. In the end, the products in place will meet organizational demands.
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