Supply Chain Dreams and Nightmares looks at one classic and high-profile case, Boeing, which has a globe-spanning supply chain. Aimed at students on supply chain management or procurement courses, the case shows how companies can avoid increasing their exposure to risk. Supply Chain Dreams and Nightmares 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 the ways in which big companies can use their procurement and supply management teams more effectively in order to avoid nightmare scenarios. Register for a Kogan Page account at check-out to access and download your PDF after purchasing. You'll also have an opportunity to sign up when receiving your purchase confirmation email.
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Case Study: Supply Chain Dreams and Nightmares
Risks of Unmanaged Cost Reduction
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CASE STUDY
SUPPLY CHAIN MANAGEMENT
Supply chain dreams and nightmares
The risks of unmanaged cost reduction
Gerard Chick
AUTHOR BIOGRAPHY
gerard chick is Chief Knowledge Officer at Optimum Procurement Group. He has considerable experience working with some of the keenest minds at the most senior level in supply management today. He is regularly invited to make keynote presentations and deliver workshops on strategic procurement issues to senior executive teams across the world.
Introduction
Driving cost out of the supply chain has kept businesses on their toes for the last 30 years, but in doing so many have incrementally increased their exposure to risk; sometimes to catastrophic levels. This may be expected in situations of pure cost reduction with no regard to product quality or service delivery, but even some of the wunderkind of procurement, who recognize that cost reduction can be allied to innovation and competitiveness, have not been immune to this folly. One classic and high-profile case which I’m exploring in this paper is Boeing. With a globe-spanning supply chain, the Boeing 787 Dreamliner became the fastest-selling aircraft in aviation history. Boeing’s share price skyrocketed and the C-suite received their bonuses. Procurement supporting the business at its best and the work was done, or was it?
Background
On 10 November 2013, a 787 Dreamliner flight operated by Japan Airlines developed a problem with its battery – the latest in a spate of problems plaguing Boeing’s 787 aircraft. A cockpit indicator in the aircraft pointed to a problem with the battery connected to the aircraft’s auxiliary power unit. The 787 Dreamliner was developed by leading airplane manufacturer the US-based Boeing Airplane Company (Boeing). The 787 Dreamliner was Boeing’s modern jet in which the aircraft manufacturer used new technology to cut the cost of fuel used for operating...
Table of contents
- Supply chain dreams and nightmares
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