Part Teardown Exercise – The Computer Mouse Situation: You are a buyer at a major computer manufacturing company. Having recently been hired after graduating from the prestigious Portland Community College Supply Chain Management program, your management has decided to let you lead your own sourcing package in order to demonstrate your purchasing abilities. You have been assigned to work in a team. The product you have been tasked to source is the computer mouse. Recently technological innovations have rendered the traditional mechanical mouse with the rolling ball underneath obsolete. The new technology is the optical mouse. Your organization does not know how much the new optical mouse will cost and has therefore asked you to run a sourcing package in order to find out the new market price and identify a recommended supplier to partner with. The current supplier of the mechanical version of the mouse has been an excellent supplier in the past and has gone out of their way to try to win the business for the new optical versions. In fact, they have even given you a prototype sample to demonstrate the maturity of their development process. The supplier will be providing you with a quotation for the product using the standard piece price breakdown form at a later date. Task: Your task is to get ahead of the curve and develop your own price analysis of what the part should cost. You will do this by taking apart the prototype mouse down to the component level and building up your own price breakdown sheet that you will be able to use in price negotiations with the supplier. Traditionally, suppliers are less than complete in their piece price breakdowns, choosing to lump together numerous cost components in order to inhibit full visibility into component pricing. You however, cannot do this, but must estimate costs down the component level of purchase for your supplier. In other words, the paper label on the bottom side of the mouse must be a separate line item, just as each screw, resistor, capacitor and microprocessor, to name a few items, should also be separate line items. You will use your company’s standard quoting template / piece price breakdown form for all parts. Volume Assumptions: 300,000 units per year for 3 years Result: Once you have developed and submitted your own piece price breakdown (part 1) you will then compare it to the supplier’s quote submission that you will receive after you have turned in part 1. In part 2 and you will prepare a presentation to the supplier on the accuracy (or not) of their submitted quote. You will give this presentation as if you are presenting to the supplier. Part 1 Group project to physically break down a simple product into its components. Identify those components and price them individually.
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