Driving the cost out of the supply chain has kept businesses on their toes for the last 30 years. This case looks at one classic and high-profile case, Boeing, which has a globe spanning supply chain. It is aimed at students on supply chain management or procurement courses who need to know cost reduction and innovation in the supply chain.
The case shows how companies can avoid increasing their exposure to risk. The author highlights the dangers of pure cost reduction with no regard to product quality or service delivery. The case delivers an indepth analysis of economies of scale and free-market fundamentalists, as well as looking at the pros and cons of outsourcing. Readers are encouraged to think about the large variety of alternative procurement and supply chain strategies which Boeing could have incorporated.
The case study examines ground-breaking best practice models, helps the reader understand the importance of innovation in the aerospace industry, and analyses the many pros and cons of outsourcing in aviation. It also explores interesting ways in which big companies can use their procurement and supply management teams more effectively in order to avoid nightmare scenarios, resulting in successful projects and an improved bottom line.
Gerard Chick is Chief Knowledge Officer at Optimum Procurement Group. He is also a visiting Senior Research Fellow at Curtin University in Australia, a visiting Fellow at Cranfield School of Management, and a member of the Logistics and Operations Management Board of Cardiff Business School.