Case Study:
The Global Sourcing Wire Harness Decision
Ricky J. Myers
Embry-Riddle Aeronautical University
April 25, 2013

Abstract
As Sheila Austin works out the decision to source from one of the two suppliers that have responded to her request for quotes for a new wiring harness for Autolink, she is faced with a decision to go with an international supplier in China, or from a local supplier. The initial look at the price quotes would steer towards the international source, but the underlying fees and costs associated with the international seller would make her think twice about accepting that deal. The in-depth analysis will steer her in the right decision to which supplier is the better candidate as well as how the cost per …show more content…
Renting can be cost effective in the short-term, but not so in the long-term. Since this is an international delivery, the container would have to go from China to the U.S. and back to China, meaning even more cost. Renting a container would only cost about $175-225 per container in a 30 day cycle (as opposed to buying at $2,500 for used, and up to $5,000 for new). (‘Shipping Container Pros,’ n.d.) Using the worst case scenario of $225 per month, per container, Autolink will have to factor into the cost of the unit price. On top of that price, Sheila will now have to factor in the international shipping costs, ground transportation, customs fees, and accountant fees to the unit price as well (see Figure 2). Since Sheila is not sure if the wiring harnesses will be phased out due to new technologies, she will likely error on the side of caution, and rent containers. (Monczka, Handfield, Giunipero, Patterson, Purchasing and Supply Chain Management, 2011, pgs 806) The calculations of how many units each container holds in order to maximize available resulted in 2,207 units per container. Lost interior container space, due to stowing the units on six inch wooden pallets, is based on cubic feet available before and after the units are palletized for loading into the containers. (‘Pallet Delivery,’ n.d.) Palletizing is necessary to loading and unloading of the container from the port in China to the port in Seattle, and