The Navistar International Corporation

The Navistar International Corporation (Navistar) is the owner of one of the most recognized international brand for medium and heavy-duty trucks. For 17 years, the North American market was led by Navistar in sales. They were also known as the global leader in the manufacturing of 160 to 300 horsepower diesel engines. Now, Navistar’s trucks are assembled at two important plants, the first one, Chatham located in Ontario, Canada, and the second one, Springfield’s company located in Ohio, United States.
Navistar manages a large assembled process for each of their trucks and with it an extensive supplier’s network. These suppliers are selected under a specific criterion regarding their prompt and continuous supply, high quality, and competitive prices of the parts they supply. These suppliers provide more than 13,000 different items that are essential for the assembling of each truck. The person in charge of this entire process is Andy Ramsz, Navistar’s assembly supervisor. Andy has demonstrated that he is a very qualified person for this position since he has worked for approximately 20 years at Navistar. During this time, he has built his career with ample experience and knowledge from different areas of the business. Not to mention, his outstanding academic preparation.
Navistar manages two different trucks’ options for its customers and prices vary according to them and the level of customization of the truck. The first option is the no-frills model truck and the second one, the highly customized model. However, Andy noticed that Navistar had been experiencing a critical problem with interior part shortages in Navistar’s premium conventional trucks that were assembled at the Chatham plant. Consequently, assemblers were not able to finish their work with the interior trim because a lot of parts were missing, or some of them were inappropriate for the truck model. After collecting some information, Andy has concluded that this problem represents a cost for Navistar over $200,000per year. In addition, the company has spent another $100,755 in the last six months to repair interior trim parts that were delivered either incorrectly punched or with the incorrect specifications. The truck’s interior trim was provided in the form of “kits” that contained a series of interior trim parts, normally, between 18 to 26 individual trim pieces. After collecting the data and discussing the problem with different managers, assemblers, and repair people, Andy has identified the seven reasons for the interior trim shortages which include: missing parts, defective parts, incorrectly punched parts, incorrect specifications, incorrectly sent parts, and robbed parts.
The main consequences of this problem include the