De Havilland

De Havilland

Prepared for

SCM Module 2 (Session 3)

Prepared By

Claude Nyvoll

February 17, 2014

TABLE OF CONTENTS

EXECUTIVE SUMMARY……………………………………………………………………………….ii

Issues …………………………………………….…………………………………………………………1

Environmental and root cause….………………………………………………….….1

Alternatives and options……………………………..…………………………………..…2

Recommendation and Implementation ……………………………………….....3

Conclusion………………………………………………………………………………………………3

Executive Summary

De Havilland has been purchased by Boeing and one of Boeings requirement on De Havilland is to request a 25 percent savings on parts or bill of material items. The parts make up a very high cost to the organization. The following report will examine three possible suppliers for flap shrouds and equipment bay doors. The BSB has sent out RFQs to 9 suppliers and will need to make a decision on which supplier to enter into an agreement with. Lakeside seems to be the best option with the fewest barriers and the highest potential for success. Entering into a contract with Lakeside will help De Havilland achieve all the goals set forth by Boewing and the BSB.

Issues

De Havilland, must make significant savings on its high parts cost in production of airplanes. De Havilland also has a goal to reduce vendors and make longer contracts with vendors.

The contract for flap shrouds came up for consideration and the equipment bay doors currently have no contract in place. There is an opportunity to make an agreement to cover bot similarly constructed items. With no contract covering the equipment bay doors locked in, long term pricing is desirable.

De Havilland cost of parts makes up 60-65 per cent of its overall cost in making its products and the. Boeing, the new owner at the time, had a directive to De Havilland to reduce the cost of parts by 25 per cent across the board. The current vendor for flap shrouds is considered high.

Environmental and root cause

The BSB has received quotations from nine...