1. Is there anything wrong with Gilmore printing most or all of the forms and pr
ID: 361632 • Letter: 1
Question
1. Is there anything wrong with Gilmore printing most or all of the forms and promotional materials under and outsourcing arrangement?
2. What major costs savings from outsourcing?
Case 5-2 Marshall Insurance Company MARSHALL INSURANCE COMPANY Kara Murphy, purchasing manager with Marshal Insur- ance Company (Marshall), in Spokane, Washington, was The Marshall Insurance Company was a large, publicly evaluating a proposal submitted from David Callum, from Gilmore Printing (Gilmore). Dav Gilmore take responsibility for m printed materials inventory for the Marshall Automobile Club. Kara could see the advantages of outsourcing man- agement of printed materials, but she remained concerned that this arrangement would not provide the service that clients and employees had come to expect. It was Thurs- day, June 12, and David was expecting a response from Kara on Tuesday, June 17, during a meeting scheduled for clients, such as original equipment automotive ma that afternoon. id was proposing that anaging all forms and held, personal lines property and casualty insurer. Founded in 1948, it had $73.5 billion in total assets. The Marshall Automobile Club (MAC) was a division of Marshall that provided roadside assistance services to its clients 24 hours a day, 365 days a year. Its more than 750,000 clients included both individuals and corporations 1 nei yaurno or)who pro MAC provided services to two customer groups, corporilde ufacturers (OEMs) who provide free roadside assistance plans with newExplanation / Answer
1) There is nothing wrong with the Gilmore printing of all the forms and promotional materials of Mac. Earlier it just took care of Mac's printing business. But now by outsourcing the entire printing to Gilmore, it may create potential threats like - threat of information and insecurity.
With multiple suppliers for Mac, even if one supplier delays delivering the product, Mac's business would not suffer. But now, with outsourcing the entire printing, if Gilmore will not be able to suply printing and promotional material on time, then that would create a problem to Mac and it may potentially lose sales because this material is very important to raise awareness in the market.
Lastly, Kara is not sure about Gilmore's service levels. Service levels with single supplier could pose unnecessary threats to the company. And once the agreement or a contract for a fixed period is made, Mac would not be able to change it till the period ends. But within that period, Kara is not sure on how well Gilmore's quality and service levels would be.
2) The major cost savings from Outsourcing would be -
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