“Boeing has begun a push to streamline its supply chain, reducing overlap between existing divisions and cutting layers of management and bureaucracy,” writes the Seattle Times (Nov. 10, 2017). The firm’s enormous global supply chain delivers more than a billion parts to its assembly plants every year, everything from buckets full of fasteners to entire wings for its 787 Dreamliner. The management of that global network is the focus of Boeing’s plan.
One tool it has turned to is increasing its use of modern information technology and digital analytics to track supplies and identify blockages in the pipeline. Boeing’s current supply chain has grown organically over many decades with multiple internal divisions all using separate tracking systems. The extended study, currently under way, will also help Boeing better determine which suppliers are working well and which are underperforming — so that it can allocate contracts accordingly, and in some cases take work in-house.
Boeing expects the first organizational pieces of the streamlining initiative — bringing together supplier management, raw-material management and elements of engine systems supply — to be in place by year end.
Classroom discussion questions:
- Why is Boeing struggling to control its supply chain?
- Why is a large percent of the supply chain outsourced, and why to many different countries (refer to the Global Profile that opens Chapter 2)?