Pacific Health Care Supply Management

Case Study of Pacific Healthcare
1. What alternatives should Barney Rubble consider when addressing the problem?
The alternatives that Rubble should consider when addressing the problem are the competitors who produce the highest quality film at the lowest price—in this case, that would be Dupont and Agfa. Dupont is 30 cents cheaper than Kodak and Agfa is 22 cents cheaper. Both are believed within the industry to have the same level of quality film as Kodak. Kodak has included a discount in terms of providing maintenance to mechanics, but only if it is the only supplier. Rubble might therefore benefit from including another supplier, at cheaper cost, but he will lose on the discounts provided by Kodak in terms of equipment and maintenance. As Burt (2010) notes, “historically, supply management has been considered important because of its impact on costs” (p. 9). For that reason, the alternatives that Rubble focuses on should be related to obtaining the desired film at the lowest cost while maintaining the highest quality.
2. Should Pacific’s supply policies allow for any medical staff personnel to control
sourcing decisions?
Medical staff should be allowed to give input regarding the quality of film stock that is desired among the staff so that the best quality care can be given. However, the role of controlling sourcing decisions should be retained by the sourcing manager, who is more trained on the practice of supply management. Burt (2010) points out that “successful firms must know where they are in relation to where they want to be,” and to that end it is helpful that staff contribute to management’s perspective on how well supplies are working so that management can gauge which sources facilitate the mission and vision of the firm best (p. 17).
3. What are the advantages and disadvantages of staying with Kodak—or changing
suppliers? How would you evaluate these?
The advantages of staying with Kodak are that the firm is able to obtain discounts on equipment and maintenance from Kodak so long as it is the only supplier of film. Additionally, the film is of a high quality and the staff is familiar with it and therefore there would be no resistance to change were the source to be maintained. The disadvantage is that Kodak’s price of film is higher than all other suppliers. If the firm already owns the equipment and can maintenance it cheaply from an alternate source, there is no reason not to go with a lower cost alternative.
4. What action could Mr. Rubble have taken prior to Mr. Howell’s death to obtain
reduced film prices?
One action that Rubble could have taken prior to Howell’s death to obtain reduced film prices could have been to sign a longer term contract with Kodak and lock in prices over a substantial period of time at a reduced rate. Given that inflation is occurring at the moment and cost prices are rising, locking in rates at a reduced price would be good for the company while also ensuring for Kodak that it has the firm’s business for a period of several years.
Another action that Rubble could have taken prior to Howell’s death to obtain reduced film prices might have been to have the other suppliers pitch a sale to the firm to see if the firm might also obtain the same discount with equipment and maintenance from the other sources offered by Kodak. By asking competing suppliers for favorable terms, the firm could have obtained a suitable offer to counter Kodak with and thus achieved a better outcome for itself. This is known as obtaining the competitive advantage (Monczka & Handfield, 2016).

References
Burt, D. N. (2010). Supply Management, 8th Edition. Devry.
Monczka, R. & Handfield, R. (2016). Purchasing and supply chain management.
Boston, MA: Cengage.