How Does Ben Lawson's Custom Fabricators, Inc., Create Value for Orleans?

1. How does Ben Lawson’s Custom Fabricators, Inc., create value for

Orleans?

Custom Fabricators Inc. has a very companionable relationship to Orleans. Orleans Elevator

is a subsidiary of United Technologies and provides Custom Fabricators Inc. with a monthly

schedule of their products and these are produced by order and delivered either to the

nearby Orleans plant site or directly to the construction location. Custom Fabricators Inc.

creates value for Orleans by delivering quality and great service with the speed, reliability

and flexibility of the manufactured items they produce. Most of the manufacturing business

is done with Orleans. Because of Orleans purchasing the raw materials, costs for Custom

Fabricators is limited to land lease, the plant, equipment and employee costs. This leads to a

stable revenue margin of approximately 30 percent. This economic wealth of Custom

Fabricators is being shared with their loyal employees who increased productivity as

business increased. Because of their high employee satisfaction the company’s reputation to

produce quality products and deliver on time has enhanced.

2. In the past, what has been Ben Lawson’s competitive advantage in

keeping the Orleans business?

By having a close relationship with Orleans, Custom Fabricators Inc. has been able to

maintain their competitive advantage. Custom Fabricators understands the business and is

able to provide the exact products whenever they are needed and Orleans can depend on

the quality and the service provided to successfully achieve their goals in completing

elevator contracts. Also their location has gained them a big competitive advantage and

helped them in being the primary supplier for Orleans Elevator.

Newly Orleans has included Ben Lawson in their search to find new suppliers for raw

materials. To decrease their costs of raw materials Orleans is researching the possibility of

outsourcing to Mexico. Orleans seems to feel that the lower cost of labor in Mexico will

substantially decrease their raw material supply costs. A company called “FreeMarkets”

should help them to obtain contract bids from a variety of Mexican suppliers. This event

concerns the CEO of Custom Fabricators Inc. because if the quality of products provided

from Mexican suppliers is not the same then it will take a week or longer to get replacement

materials. Currently it only takes about some hours to a couple days to correct quality

problems because of the closeness of the current raw material suppliers. By purchasing raw

materials from a distant location, Custom Fabricators realizes that this could have an impact

on product quality and punctuality and this would drastically increase the risk of

manufacturing elevator products for Orleans. 3. Have Orleans’ priorities changed?

It is obvious to see that Orleans has changed priorities. They are trying to change their base

from high quality and reliable products to a cheaper price based strategy. This has brought