De Havilland

Contents

1- Executive Summary 4

2- Issue Identification 5

3- Environmental and Root Cause Analysis 6

4- Alternatives 7

5- Recommendation 8

6- Implementation 8

7- Monitor and Control 9

8- Conclusion 9

1- Executive Summary

De Havilland's Dash 8 aircraft has a high manufacturing cost, which is due to high cost of sourcing the flap shrouds and bay doors from Dollard plastic of Montreal, without a proper contract in place. Dollard, however was unwilling to lower the price at all for the flap shrouds as a result the purchasing process then moved to the BSB stage to seek a number of competitive bids.Kim Tomar to recommend a new vender to De Havilland's source selection board vary soon, who will be able to meet a set of standards that De Havilland had developed earlier for their procurement department. We have to determine whether Morton is sufficiently stable to be relied upon in the future. The process started almost a year and half earlier than the expiry date with the currentsupplier.We have received nine bids to supply the required parts; I (Kim Mortan) have recommended Morton Enterprise Inc. to De Havilland’sSource Selection Board (SSB) as potentialsupplier.Per initial information from thecomparison of bids from all nine bidders, Marton enterprise Inc. offered a huge saving overt the current supplier (Dollard). Marton offered 18% lower compare to the other bidders and compare to the prices of current supplier Marton prices were 54% and 75% less expensive.However, other than parts' cost reduction we have to establishstrategic sourcing down on the road, to award comprehensive contract with the supplier. As a Strategicplanning,we have to negotiate long-term contract with Morton that will be of the greatest value possibleto De Havilland.

2- Issue Identification

High Manufacturing Cost

The parts cost, of Dash 8 airplane at De Havilland represent 60-65% of their total manufacturing cost, considering procurement policy...