Scribd
Upload
26 views2 pages

(Log) Group 9

Nürnberg Augsburg Maschinenwerke (N.A.M.) is a prominent German manufacturer facing a significant business opportunity to supply 224 articulated buses to Brazil, contingent on meeting strict cost and delivery deadlines. The company must navigate production capacity issues between its Munich and Prague plants, as well as decide on the most efficient transport route for timely delivery. Key decisions include transport logistics, production strategy for the remaining buses, and cost management through appropriate Incoterms.

Uploaded by

Khoa Đỗ Đăng
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
26 views2 pages

(Log) Group 9

Nürnberg Augsburg Maschinenwerke (N.A.M.) is a prominent German manufacturer facing a significant business opportunity to supply 224 articulated buses to Brazil, contingent on meeting strict cost and delivery deadlines. The company must navigate production capacity issues between its Munich and Prague plants, as well as decide on the most efficient transport route for timely delivery. Key decisions include transport logistics, production strategy for the remaining buses, and cost management through appropriate Incoterms.

Uploaded by

Khoa Đỗ Đăng
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Case Summary: Nürnberg Augsburg Maschinenwerke (N.A.M.

)
Context:

Nürnberg Augsburg Maschinenwerke (N.A.M.), a leading German manufacturer of heavy


trucks, buses, and diesel engines, has a long history dating back to 1748. It has faced
challenges due to international politics, particularly losing foreign assets after both World
Wars. By 2003, it had regained its global position and was a major player in the industry.

Current Issue:

Karl Huber, N.A.M.’s regional vice president for South America, received a promising
business opportunity from Brazilian authorities. The deal involves supplying 224 articulated
buses for São Paulo and Rio de Janeiro, with a potential follow-on order of 568 more
buses. However, there are two major conditions:

1. Cost Constraint: The price per bus must match or beat a previous order for Buenos
Aires, which was €124,500 per bus.
2. Strict Delivery Deadline: The first 25 buses must arrive in Santos within 90 days
(by November 15). Successful delivery would secure the remaining 199 buses
within 15 months and increase chances of winning the additional order.

Huber quickly accepted the offer but now faces the challenge of ensuring cost-effective and
timely delivery.

Production & Logistics Challenges:

1. Factory Capacity Issues:

○The Munich plant is operating at full capacity.


○The Prague plant has available capacity but has older and slower
assembly lines. It can handle only 20% of the full contract but can produce
the first 25 buses on time.
○ A split production approach between Munich and Prague may be necessary
for fulfilling the full order.
2. Transportation Decision:

○ Options for transporting buses from Prague to the Port of Santos (Brazil):
■ Rail transport to Bremerhaven or Hamburg (Germany) or Rotterdam
(Netherlands).
■ Waterway transport to Hamburg, which is cheaper but takes 3 extra
days.
○ Shipping from Rotterdam is slightly faster and cheaper than from Hamburg or
Bremerhaven.
○ Hapag-Lloyd, the chosen shipping company, has deck space available on
multiple dates, with €6,000 per bus shipping cost.
3. Logistics Costs & Risks:

○ The company needs to balance cost-effectiveness while meeting the


deadline.
○ Assembly and disassembly costs for articulated buses must be factored in.
○ Customs, port handling, and potential delays need consideration.

Key Decisions to Be Made:


1. Which transport route to choose for the initial 25-bus shipment to meet the tight
deadline?
2. What production and delivery strategy should be used for the remaining 199
buses?
3. Which Incoterms (DAT, DAP, or DDP) should be chosen for cost and risk
management?
4. How to optimize logistics costs while ensuring reliability?
5. Should the company prioritize shipping via water to align with the EU’s
“Motorways of the Seas” initiative?

You might also like