* IPL Inc. is a leader in the Canadian injection molded plastics industry, specializing in the design, manufacture, printing and marketing of plastic products, mainly intended for industrial uses and made of thermoplastic resins. IPL distinguishes itself from competitors through its emphasis on better quality and performance products, superior engineering and service, innovativeness and the capacity to meet customers’ specific needs.
* Julien Metivier, CEO of IPL Inc.
* Make a decision, in the next month and respond to Ford’s contract offer as well as deciding on several other projects IPL is considering.
* What direction should ...view middle of the document...
* IPL contributed as much as $150, 000 annually for local charities, sports facilities and the Metivier arena. Metivier brothers always tried to concentrate IPL’s activities in Saint-Damien in recognition of the local population’s continuing support – if they expand to different areas, will this make the community backlash and IPL’s reputation diminish?
* IPL had become one of two North American firms developing visible, imitation leather parts for Ford. Ford had offered IPL a five-year contract, beginning in spring 1989 and worth an estimated $10 million annually, for supply of these parts.
* The deal could make IPL roughly $40 million.
* The contract would be in addition to existing business done with Ford, and could thus raise IPL’s annual sales to them.
* This contract could be executed with IPL’s current production capacity.
* Collaboration with Ford represented a unique opportunity to enter a market offering rapid growth and profit potential, while capitalizing on IPL’s skills in high quality injection molding.
* Business with Ford was facilitated by the rapid accreditation of IPL’s Saint-Damien plant as a Q-1 supplier in 1984.
* In 1986, Ford had expressed an intention to reduce its number of suppliers by 90 percent within five years and to develop lasting relationships with the remaining firms, especially those which obtained Q-1 or TQE accreditations.
* IPL’s achievements in quality control were recognized when the firm received the prestigious Mercure award for Total Quality form the Quebec Board of Trade.
* The automobile market could represent a lucrative opportunity, if IPL is able to maintain a good margin on these products and it would allow them to expand their customer base.
* All major advances in knowledge in plastics industry came from work in the auto and aerospace industries. The auto parts market could be a priceless source of know-how if IPL was able to develop lasting relationships with automakers.
* Ford’s increasing emphasis on quality rather than just price is consistent with IPL’s capabilities.
* Ford is offering F.O.B shipping
* The order volume was not guaranteed but would depend on the sales volume of Ford’s cars.
* The contract terms allowed IPL a level of profitability equivalent to the industry’s average, but included clauses permitting Ford to withdraw its business at any time and required price reductions of five percent annually.
* Ford was at the forefront of trends toward rationalization of supplier networks and improvement of overall product quality.
* Some concerns were voiced regarding IPL’s increasing dependence on a single, much larger customer.
* IPL will have to create an independent division to exclusively handle the auto market.
* IPL being involved in custom molding for Ford are basically subcontractors that used molds...