DRW Technologies: Case Study Analysis
Name Roll No
Hargunjot Singh P42126
Neepa Agrawal P42135
Nikhar Gandhi P42237
Rishabh Choudhary P42147
Samar Singh P42152
Saransh Agnihotri P42155
Executive Summary
DRW Technologies, a defence and aerospace company with 21 plants in the United
States which makes advanced electronic systems for US military and commercial aircraft
manufacturers, hires a new Corporate Vice President of procurement, Ed Claiborne.
Even after reservations from Charles Suh about Claiborne’s ability to adapt to DRW's
culture, CEO Dagmar Hilgard goes with the decision of hiring Claiborne to cut costs
who was a procurement executive for a profitable national defence subcontractor, where
there was a hierarchical system and there was a chain of commands. The news of his
arrival was announced in an email to corporate executives and plant managers and in
the company newsletter. After deciding the new policy, while it came to inform plant
procurement managers, he thinks to use email as a medium but He did not even listen
to Debby Lopez’s suggestion of meeting some of them personally who was working in
the company for around 14 years. Claiborne decided to send the message via email,
and the message was met with unexpected results and it seemed that he was not given
due importance. The analysis revolves around finding the reasons behind negative
responses from executives, why the contracts were not submitted, and finding possible
solutions.
Statement of Problem
The hiring of Ed Claiborne was not suitable to company conditions, the Culture of the
old and new organization was different which carried out the incompatible approach
towards managing plants, and lack of communication while implementing new policies
having many loopholes at various levels.
Causes of the problem
The problem of the communication gap is from both Ed Claiborne and Plant procurement
managers' sides. The previous work experience of Ed Claiborne is in an organization
with a hierarchical structure and strict chain of command. In DRW technologies, every
plant enjoys an autonomous character. This makes it difficult for Ed Claiborne to work
in accordance with the nature of the Organisation.
Ed Claiborne didn’t consider the advice of his assistant Debby Lopez, regarding visits
to some of the larger plants to meet the plant procurement manager and take their
feedback on the proposed policy.
The plant procurement managers are involved in an informal conversation with vendors
about cost pressure but not with other plant executives. Their response to Ed Claiborne
over email was not constructive as they promised to provide information on contracts
but didn’t fulfil it.
Decision Criteria and Alternative Solutions
Decision Criteria
1. Taking into consideration the views of experienced co-workers.
2. Reduce overhead procurement costs.
3. Transparency in communication within the procurement/plant managers.
4. Creation of a nationwide supply chain for raw materials.
5. Revisiting fixed-priced contracts.
Alternative Solutions
1. Ed Claiborne After determining that cost-cutting could be achieved by reducing
the number of suppliers and placing a policy, requiring plant procurement
managers to clear with him contracts of 250000 dollars or more two weeks
before the contracts to be signed. He could have taken the recommendation from
Debby Lopez who had been working for 14 years of experience at DRW, to
visit some of the larger plants, and meet the procurement managers, and ask for
feedback on the proposed policy. In this way in one-to-one interaction,
communication would be clearer between them.
2. Increasing the price of contracts that are predefined to compensate for the
increase in cost price.
3. Setting up a quarterly appraisal system for plant managers who achieve their
targets. This would be a factor in increasing sales, which in turn would increase
revenue.
Recommended Solution, Implementation, and Justification
Solution 1 should be implemented as it is the compatible one. Without bringing much
change, a proper communication bridge can solve the problem effectively. Ed Claiborne
is new in the company and a formal visit to different plants will form a better
communication channel. This might provide information on contracts valued at or above
$ 25,000 which is necessary to avoid increasing cost pressures and to reduce the number
of suppliers. The overall plan to work on economies of scale and complete potential
cost savings of up to 50% can be easily reached through this plan.
