De Havilland Inc Case - Supplier Selection

Table of Contents

Executive Summary Page 2

Identifying Issues Page 3

Environmental and Root Cause Analysis Page 4

Alternative and Options Page 5

Recommendations Page 7

Implementation Page 8

Monitor and Control Page 9

Executive Summary

De Havilland Inc. has continued to be a front runner in the Canadian aircraft manufacturing industry, with a rich history dating back to 1928. Although the company has been under multiple owners in the past few decades, the company has endured multiple challenges and continues to stand strong.

In order to continue the success of the company, a review has been done to help identify key areas of interest, where we can improve the financial strength of this great company. One such area is the costs of parts for one of our popular airplane models, the cost of the Dash 8 accounts for 60-65% of the total manufacturing costs for the company, and more specifically the majority of the costs lies with the flap shrouds and equipment bay door parts. We recently approached the vendor who supplies these parts, but efforts yielded little results. Our only alternative is to find an alternative supplier that is willing to negotiate a better costing for these parts.

Our main focus is to find a new long-term supplier that we can cooperate and be compatible with, while negotiating favourable terms to mitigate any potential risk this new partnership may bring. We have several bidders and a few preferred vendors that are suitable for such a partnership, and through detailed financial and environmental analysis we can determine the best candidate for this contract. A detailed recommendation, implementation, and monitoring strategy will help provide reasoning and clarify the process and procedures required for the transitioning of suppliers to flow smoothly.

Kim Tomar

Financial Analyst, Materiel

De Havilland Inc.

Identifying Issues

1. Finding an alternative and...