Agile Electric Quality Issues in a Global Supply Chain Case Solution

1. Should the complete recall/field failure and associated costs be charged to the tiered suppliers?

The entire case study illustrates two different incidents. The first issue relates to capacitors, and the latter relates to PCB. When merged, both issues made enough disaster for Agile and Automek. As the main supplier to Automek, Agile is obliged to tackle the issue and take responsibility. The blame is to be shifted to Agile in the entire chain process, but the associated cost should not be completely charged to Agile. Agile should be responsible for bearing 2/3 of the cost, and the rest should be taken care of by Automek. The reason is that before the manufacturing process, both parties signed an agreement. It was mentioned clearly that for any mishap, the responsibility would be shared by both parties. Although the contract clauses exhibit that the quality of the product is the responsibility of the supplier, and based on that, agile is to be blamed for this overall failure, but still, Automek is to be responsible for bearing one-third recall cost as Agile had no experience to produce actuator. 

During the process, Automek sent its own engineers to identify the issues that may affect the quality of the product, but Agile showed resistance to committing to the task. Similarly, in the second failure, it was clear that ECPL and BIPL had problems that might have become the reason for the potential recall, but still, Automek allowed them to proceed with the development. Further, with multiple failures at various steps, Automek no doubt audited tier 3 and 4 suppliers and addressed the gaps, permitting Agile to proceed with development. Hence, it shows that Automek did not handle the audit responsibility well and failed to audit the actuator supplier and sub-supplier and their capability properly. Also, Automek was unwilling to make any change or implementation to integrate with high-level suppliers, which made the situation more complex and hence was difficult to be solved. 

2. Was Automek's decision to source the business from Agile a good one? Did Agile make the right call in accepting the contract?

The outcome of the assigned case depicts that the decision made by Automek to give business to Agile was wrong. But from the reader's perspective, we have the leverage to assess the case and give the stance. If looking at the decision clearly from a business perspective, we can't label it as a wrong move. Automek is one of the largest auto component manufacturers based in North America. In developed economies, organizations are forced to outsource their production line to other countries to maintain a competitive edge at the global level.

Similarly, in the case of Automek, if the company has not sourced its business, then the chances of losing a competitive edge would be higher. With this lens, the decision of Automek to outsource its business was technically right. However, choosing agile as a supplier gives room for argument. Automek's decision to choose Agile was based on their past experiences and track record. Agile's performance has always been good as they always managed to produce quality products.