S.C. Prometalex S.A. Online publication date: Fri, 11-Jan-2008
by Daniel A. Glaser-Segura, Liviu Ilies, Oana Adriana Gica
International Journal of Integrated Supply Management (IJISM), Vol. 4, No. 2, 2008
Abstract: S.C. Prometalex S.A. is a teaching case concerning a newly privatised Romanian producer of food process and bottling systems that ventured into making hydraulic car lifts after highly disappointing sales in the newly privatised company. The venture involved the selection of off-shore suppliers for three major subcomponents: hydraulic pumps, electronic controls and hydraulic cylinders. Prometalex was not satisfied with Romanian suppliers and searched for offshore suppliers. The Prometalex managers experienced an intensive self-taught lesson in supplier selection. Their decision was based on quality, price, delivery and payment conditions. Small volume and offshore supply constraints, however, led to costs that would hurt profitability as Prometalex was about to begin volume production of the lifts. The opportunity to source from a new Romanian supplier was a welcome development but supply uncertainty was a major barrier. The case introduces history, concepts and issues associated with purchasing in a transition economy.
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