Purdue News

December 10, 1999 Purdue bests Indiana in business challenge WEST LAFAYETTE, Ind. – Purdue University students walked away with top honors in a Purdue-Indiana Case Challenge by devising an innovative way for automobile producers to sell their cars. The competition challenged 32 students from Purdue, Indiana, and Indiana University-Purdue University at Indianapolis to create a new way for car manufacturers to produce, supply and sell motor vehicles. The teams of four had 24 hours to formulate a way for the automotive industry to duplicate the business practices of several computer producers. "It's standard practice for many computer companies to build products on the initiative of the customer and a computer is manufactured only after the customer places an order for one, but car manufacturers routinely produce and distribute automobiles with the assumption they will be sold," said Michael Sanders, director of management undergraduate programs at Purdue. "The students had to figure out a way for the automotive industry to produce cars as they are purchased. An advantage to the computer industry's business practice is that it requires a low investment in inventory. "You can imagine the investment automobile manufacturers have in their cars before they are even sold," Sanders said. "If they could produce cars on demand, the savings would be phenomenal." The winning team recommended that automobile manufacturers reduce the number of car dealers and increase Internet sales for vehicles. First-place team members were: Emily Johnson, a management major from Huntsville, Ala.; Matt Donaldson, a management major from Cedar Rapids, Iowa; Becky Lange, an accounting major from Milwaukee, Wis.; and Anthony Dudek, a management major from Barrington, Ill. The team also suggested a way in which automotive suppliers could provide the parts to produce a car as needed, which would reduce the automobile producer's inventory investment. "Computer parts suppliers are often hooked up to a computer company's order requests, and when a customer places an order for a computer the parts needed for that computer are shipped immediately to the company. The product is made after the parts are delivered," said Sanders. "If car manufacturers gave their suppliers access to the information on special orders they could provide the parts immediately for that order, but right now they can't." The team projected that if information from those special orders was made available to its suppliers, the shipping time on those orders could be reduced from 60 days to 11 days. Sanders said another problem faced by the students was that "customers literally want to kick the tires" when they invest in an automobile. "That was solved by still having a limited number of car dealers out there with demonstration models for the consumer to see and drive before they order an automobile," he said. Second place winners, all management majors at Purdue, were: Pat Lenihan, Avon, Ind.; Nate Rasmussen, Valparaiso, Ind.; Carrie Campbell, Lincoln, Neb.; and Adrienne LaBuy, Wauconda, Ill. The event was held at Purdue's Krannert School of Management. Student organizers were Kristin Federer, a junior from Wolcott, Ind., and Amanda DeRita, a junior from Fort Wayne, both from the Purdue School of Management Council. Harvard Business School provided the problem for the competition. "This was the first year we've done this, and it was just a good activity with some friendly rivalry," Sanders said. "We plan to do it next year at the Kelley School of Business at Indiana University." Team presentations were judged by business representatives from Aramark Inc., Schaumburg, Ill.; Cintas Inc., Griffith, Ind.; Crowe Chizek LLP, Indianapolis; Ernst & Young, Cincinnati; and Enterprise Rent-a-Car; Indianapolis and Hobart, Ind. Source: Michael Sanders, (765) 494-4342, msanders@purdue.edu Writer: Cynthia Sequin, (765) 494-2073, cynthiasequin@purdue.edu Purdue News Service: (765) 494-2096; purduenews@purdue.edu To the Purdue News and Photos Page