InternalInterviewNotesInterviewDate:22March2000IntervieweeName:Mr.GuoShijunIntervieweePosition:ManagerofOutsourcingComponentAdministrationDepartment(OCA)CompanyandAddress:FAWInterviewerName:BillHe,JaneXuBackgroundTherearealltogether1,054componentsuppliersforFAW.Amongwhich448areoriginallyattachedtoOutsourcingComponentAdministrationDept.,Other606wereattachedtoFAW’sinternalcomponentmanufacturesbefore2000—SomeofFAW’sinternalcomponentmanufacturesjustout-sourceditscomponentratherthanproduceitthemselves,FAWContractorAdministrationDept.takebacktheiroutsourcerightfromthisyearFAWoutsourceonecomponentfromaveragetwosuppliers,componentsuppliernotonlyprovidecomponenttoFAWbutalsotocompetitorslikeSAWAccordingtoMr.Guo,FAWOutsourcingComponentAdministrationDept.hasastandardevaluationsystemtoevaluatethecomponentsuppliersfromthreemajoraspects:1)Quality.2)Price3)Productioncircle;;Theevaluationiscarriedoutonceperyear.TothedealerwhogettheevaluationscoreunderB,FAWwillstopitssupplyright,around10%ofthedealerswillgetoutofthepoolperyearKeyIssuesToomanystepsinthecomponentinformationandlogisticsflowhascausedthehighpriceoftheoutsourcedcomponentsandseverelyinfluencedtheefficiencyofcomponentdeliveryCurrentOutsourcingComponentInformationFlow&OutsourcingComponentLogisticsFlowOutsourcingComponentAdministrationDept.ProductionDept.Planning&FinancialDept.FAWTradingCompanyComponentCenterServiceStation,ComponentStoreKeyClientsComponentSupplierComponentInfoFlowComponentLogisticsFlowComponentInformationFlow:AlltheinfodeliveryiscurrentlythroughtelephoneandfaxFAWTradingCompanydeliversthecomponentdemandinformationtoPlanning&FinancialDepartmenteverymonthbasedonthemarketcomponentdemand(sincethepoorpredictioncapabilityofservicestations/dealers,informationisnotaccurateenough)Planning&FinancialDeptheldaconferencebetweenFAWTradingCompanyandProductionDepartmentthatmonthastodecideanddispatchthecomponentproductiontasktoProductionDepartmentAfterreceivingthetask,ProductionDepartmentwilldelegatethecomponentmanufacturingandoutsourcingtasktodifferentdepartmentsOCAwillstarttooutsourcethecomponentafterreceivingthetaskdelegatedbyProductionDepartmentComponentLogisticsFlow:SupplierssendthecomponenttoFAWOCA,OCAwilldispatchthecomponentstoassemblylineandFAWTradingCompanyaccordingtothepreviousplanFAWTradingCompanyrepackagethecomponentsandsendthemtoComponentCenters,ServiceStations,etc.PricingFAWOCAFAWTradingCompanyComponentCenterServiceCenterComponentStoreComponentSupplierProvidingPrice:FOBComponentpriceProvidingPrice:FOB+3%(PriceA)3%isthemanagementfeeaskedbyPlanning&FinancialDept.ProvidingPrice:PriceB+2%;5%;10%(PriceB=PriceA+10%)