Labrador Inc. Case

Background

Labrador Inc. $($Labrador$)$ started in $1915$ and has become an internationally successful company with about $46,000$ employees at $65$ locations in $27$ countries. Initially, they started as a trading company for automobile accessories and eventually expanded into the production of automobile components in Germany. In the $1950$s$,$ Labrador manufactured handles, hatches, hinges, latches, sun visors, and canisters. They were the first company to produce power windows starting in the $1960$s and eventually started producing seat recliners and adjustable back rests for automobiles. By the $1970$s they were the first to produce power seat adjusters and electronic control$-$units for power window regulators in the $1980$s$.$ At the end of the $1990$s$,$ Labrador had production sites in Germany, England, Spain, America, Mexico, Japan, and France. By $2005,$ Labrador had $8900$ employees in $37$ locations and in $19$ different countries. Throughout the years Labrador continued to strive for lightweight design to optimize fuel efficiency and CO$2$ emissions. In $2008,$ Labrador added electric drives for window regulators, sunroofs and seatbelt retractors to its product range. In $2009,$ it formed joint ventures in China and Thailand to start production in those locations. In $2011,$ Labrador entered a joint venture in South Korea. In $2014,$ they built new facilities in South Africa. Labrador$$s competence of has been the production of technology for doors and liftgates; adjustment systems for front and rear seats; and electric motors and drives.

Labrador strives to play active roles in shaping the social environment by using environmentally friendly technology and by being involved in the communities they are in$.$ The company regularly participates with food drives, habitat for humanity, and supports mental health charities. They are committed to protecting the health and safety of their employees. Management operates with principles of: putting the company$$s interest ahead of their own, to be innovative to secure leading market position and best price$-$performance ratio, acting fairly towards employees on all levels and in all locations, delivering top performance to their customers, all stakeholders act as one team with trust, making fast decisions and assuming responsibility for their actions.

In $2005$ Labrador started two plants in London, Ontario, Canada. There are currently over $400$ employees who work in production, skilled trades, administration, and management at the London location. The main process was seat adjusters, seat components, and doors systems production. This has evolved to focus on the production of seat systems with their main customers being Volkswagen, Ford, and Chrysler. The London plant has received the London Chamber of Commerce Excellence in Human Resources Award, Ivey Academy Manufacturer of the Year, ASQ Quality Award of Excellence, London Economic Leadership Award, the FCA supplier of the Year Award, Volkswagen $$A$$ Rating, and Ford Q$1$ Certification.

As Labrador is a global company, they manage the procurement of production materials, services, and capital equipment through a global sourcing network. To maintain standards, they require high service standards from their suppliers but offer a stable relationship with growth prospects for their suppliers.

Christine Jackson, a buyer at Labrador in London, Ontario, has sent out Requests for Quotations $($RFQs$)$ for a wiring harness they use in their doors for a new automobile model. Marketing estimates that the demand for harness is $8000$ units a month in Year One with a $20\%$ growth expected for Year Two. The chosen supplier may incur some costs to retool for this particular harness as it has not been previously ordered by Labrador. The harness will be prepackaged in $24$ x $12$ x $6-$inch cartons with unit weight of approximately $10$lbs when packaged.

As with most automotive component companies, adequate supplier capacity is a critical issue. Taking a lesson from the demands placed on it by its current customers, Labrador will seek some assurance from its suppliers that they can increase the supply of components by $25\%$ within four weeks$$ notice of changing market conditions. Supplier responsiveness and ability to satisfy Labrador$$s volume requirements will be critical.

Evaluate the single sourcing option versus multiple sourcing option?