Dehavilland Case Study

Executive Summary

De Havilland is a Canadian aviation company that is in the process of determining how to contract out the supply of its flap shrouds and equipment bay doors for its Dash 8 aircraft. Its current supplier, Dollard Plastics is believed to be charging a large premium over market price and for that reason, a completive tender was issued to test De Havilland’s hypothesis. After receiving bids from 9 companies, a strategic review of De Havilland’s options and alternatives was conducted. Based on this review, it is recommend De Havilland ceases its contractual relationship with Dollard and instead enters into a contract with Marton Enterprises. Although entering into a contract with Marton puts forth the issue of whether or not product quality would rival that of Dollard, quality can be monitored and controlled through engaging De Havilland’s stakeholders to conduct vendor management, including a full review of Marton’s fabrication facilities, as well as engaging in customer-supplier relationship meetings on a quarterly basis.

Issues Identification

De Havilland is faced with the issue of determining the future supply source for flap shrouds and equipment bay doors (collectively referred to as shipsets) for its Dash 8 aircraft, as the current contract with Dollard Plastics is set to expire and the company’s shipset inventory will be depleted within the next sixteen months. De Havilland must adhere to two new company instituted corporate procurement policies; it must seek to reduce to the cost of its parts by 25%, and it must institute long term strategic relationships with its suppliers. De Havilland will have to demonstrate that it is indeed receiving a true 25% discount, and that the supplier it has chosen is able to provide the quality of service required to produce a good quality product and enable the formation of a long term strategic relationship.

Environmental & Root Cause Analysis

De Havilland believes that the price of its...