Sonvilier Pen Company: An Outsourcing Decision

Abstract

The COO for Sonvilier Pen, an elite manufacturer of high-quality ballpoint and fountain pens, had gotten a proposal to outsource two pen components to Li Manufacturing, a specialist in the molding and production of intricate metals, located in southeastern China. The proposal was intriguing, but there were a number of factors for the COO to consider before making a decision. Excerpt UVA-C-2406 Rev. Nov. 27, 2018 Sonvilier Pen Company: An Outsourcing Decision Sonvilier Pen Company (Sonvilier Pen) was a manufacturer of high-quality writing pens. The company could trace its origins to the early 1900s, when founder Cedric Mettler and his father began producing various writing implements in their small shop in Sonvilier, Switzerland. The Mettler son later immigrated to the United States and soon thereafter opened his own fountain pen company, taking the name of his hometown in respect for the place where he had honed his craft. By the turn of the next century, Sonvilier Pen had become an elite manufacturer of high-quality ballpoint and fountain pens, producing over three million units annually. Its headquarters and manufacturing facilities were located in northern New England. Peter Harwood was the COO for Sonvilier Pen. On his desk was a proposal to outsource two pen components to Li Manufacturing, a specialist in the molding and production of intricate metals, located in southeastern China. Harwood had not initially courted this opportunity. An intermediary US organization had proposed the partnership to Harwood six months earlier. The intermediary was a go-between agent engaged in matching manufacturing partners, billing itself as a full-service custom-manufacturing facilitator. It specialized in first finding appropriate China-based manufacturers for US-based organizations and then providing a full suite of services related to production: engineering, packaging, customs clearing, and quality control, among others. The proposal was intriguing, and left Harwood with a number of factors to consider before he made a decision regarding the offer. Li Manufacturing's location alone brought with it a unique set of challenges Sonvilier Pen would have to face if it were to outsource production. Li Manufacturing's operations were located in one of China's many economic development zones. Moreover, the company had a stellar reputation for quality workmanship and execution and had partnerships with numerous other US manufacturers. All those companies gave Li Manufacturing stellar recommendations. . . .