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  • Posted on 23rd Sep, 2022 02:41 AM
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This story appears in the November 1999 issue of Entrepreneur. Subscribe »

In the early 1990s, one of Chrysler's hottest products wasthe Jeep Grand Cherokee. The procurement and supply departmentdecided to determine how reliable its suppliers were and beganmapping out all the sources for the Jeep's engine. One of itscomponents was a roller-lifter valve made by Eaton Corp.

But the raw metal castings for this piece came from a small shopnear the Eaton factory. The castings company, in turn, got theunique clay it used in its foundry from another supplier. WhenChrysler visited that source, it discovered the company had beenlosing money on its clay and its owner had decided--without tellinganyone else--to change his . Imagine the reaction of theChrysler executives when he informed them that he was planning toprocess the clay into kitty litter instead! If Chrysler hadn'tbeen keeping tabs on its suppliers, it could have lost a lot oftime and money trying to replace its clay supplier.

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