Muenster Pump Case Study Example | Topics and Well Written Essays - 500 words

Muenster Pump - Case Study Example It is amply clear that Union Foundry’s quote is most competitive. Moreover, it guarantees to deliver the quality product as they have adopted modern technology. Outsourcing pump housing is in benefit of the company. Ned Dorf is not enthusiastic about outsourcing the parts. He is of the view that his company produces quality products and has reputation in the market place. He is a bit conservative and wants to have every parts produced in-house for this reason. The bigger issue is when foundry is closed down and pump housings are outsourced, what would happen to the workers working in the foundry unit? Currently, industries try to save every cent in material and direct labor cost because that is a key to survive in the long run – in the good and bad market. Market dynamics change rapidly and efficiency is the mantra for any industry to progress in the market place. It is quite likely that someone else might offer pumps at lower cost by employing Union Foundry’s housing and outplay The Muenster Pump Company from its age-old secured business. The clichà © ‘Survival of the Fittest’ is equally true in the business too. a. The Company will reduce its direct cost by more than 10% percent and will save substantially increasing the bottom line. The company can offer more competitive prices to the customers and increase its market share. Only disadvantage with outsourcing is to ensure quality supply of the component outsourced and if Union Foundry fails to deliver the supply in future for the reasons beyond their control what should be done? The advantage is that the company would be able to judge the quality of Union Foundry in due course of time and then gradually increase the procurement to make it hundred percent. This will give company enough time and leverage to adjust the workers in the other processes or in expansion of the main activities. This will take care of the human adjustment