Lecture10Procurement andOutsourcing Strategies（Chapter9)
Lecture 10 Procurement and Outsourcing Strategies (Chapter 9)
9.1.Introduction.What is outsourcing?. Outsourcing has been increased progressivelyover the yearsCompanies outsourced everything...* Fashion Industry (Nike) (all manufacturingoutsourced)* Electronics Industry* Cisco, Apple (over 7o% of components outsourced)Not Just Manufacturing but Product Design, Too
9.1 Introduction What is outsourcing? Outsourcing has been increased progressively over the years Companies outsourced everything. Fashion Industry (Nike) (all manufacturing outsourced) Electronics Industry Cisco, Apple (over 70% of components outsourced) Not Just Manufacturing but Product Design, Too
OutsourcingCaseWhere is the Boeing 787 Dreamliner Made?BOEINGAmerican companies make the front and back ofthe plane. The rest come from all over the world
Outsourcing Case Where is the Boeing 787 Dreamliner Made? American companies make the front and back of the plane. The rest come from all over the world
SelectedsystemsuppliersontheBoeing787DreamlinerFrance,UsJapan,FranceFrance.UsFrance,UsUK.France.UsIn-flightInside cockpit,Inside seating,InternalelectricalElectriccontrolsentertainmentsafetyavionicspowerandcomponentsBoeing787DreamlinerUSUSSelectedcomponentsandsystemsuppliersTail finCanadaKoreaItalyWingtipsAustraliaUKMovableFranceUStrailing edgeJapanSwedenAftfuselageItalyWingJapanCentrefuselageKoreaCanadaAustralia0ItalyEngineNacellesHorizontalstabilizerSwedenCargoaccessUSdoorsForward fuselageAircraftassemblersCurent-Airbus,JapanBoeingFuselagePotential -China,FranceUSUKRussia,JapanEntryFixedandLanding geardoorsLIKleadingEnginemovableedge
Comparison of Boeing'sstrategy for its737 and787 programsComponent737Program787ProgramSourcing strategyOutsource35-50%Outsourced70%Supplier relationshipTraditional supplierrelationshipStrategic partners with tier-1(purely contract based)suppliersSupplier responsibilitiesDeveloped and produced parts forDeveloped and produced sectionsBoeingforBoeingNumberof suppliersThousandsApproximately50 tier-1 strategicpartnersSupply contractsFixed-price contracts with delayRisk-sharing contractspenaltyAssemblyoperations30 days for Boeing to perform final3-day assembly of completeassemblysections
Comparison of Boeing's strategy for its 737 and 787 programs