2013 CSUF Boeing Case Competition ( Titan Consulting Proposal )
Boeing Case Study - 2010 Global Business Case Study Competition
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Transcript of Boeing Case Study - 2010 Global Business Case Study Competition
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Build-to-HomeGrounded Boarding Take offMaintenance
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PESTLE
• Political• Economics• Social• Technologi
cal• Legal• Environme
ntal
SWOT
• Strengths• Weakness
es• Opportunit
ies• Threats
Analysis
Problem Solution Implementation Finances
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Analysis
China – WTO & AirbusGlobal Recession
Technological Strategic WindowSuppliers Developing Core
CompetenciesLegal Issue – Pratt & Whitney
Oil PricesEnvironmental Regulation and
ReformProblem Solution Implementation Finances
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Current Supply ChainDevelopment of 787
Reliant onOUTSOURCING
PROBLEMSDelays and penaltiesThreat of IP theftTwo-tier outsourcingResponsibility vs. Accountability
- lack of control
Parts
Boeing:
35%Japan: 35%
Italy: 26%
Problem Solution Implementation Finances
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Grounded Boarding Take OffMaintenance
Solution
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Supply Chain Management
High
Low
HighLow
Complexity of Supply Market
Imp
act
on
B
usi
ness Kraljic MatrixNon-critical
Many suppliersLow impact on
business BUT still may cause delays
StrategicFew Suppliers
High impact on business
Good relationship is key
Example: Food Service Equipment (Diethelm
Keller Aviation)
Example: Wingbox (Alenia)
Problem Solution Implementation Finances
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Customer Relationship Management
“Safe Pair of Hands”
Soft ApproachFoster trust through transparency of operations
and soft-sell techniquesR Cheap, quick and easy to do
Q Repeated delays may make it difficult to believe
BUT WE RECOMMEND: Hard Approach Make a guarantee to deliver that is favourable to
the clientR Significant improvement in customer relations
Q High RiskProblem Solution Implementa
tion Finances
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Leveraging the Experience
Lessons learned
• To reduce dependency on individual suppliers by:• Using multi-sourcing• Bringing them closer to us• Effectively monitor and manage suppliers• Build on supplier knowledge• Find a way to increase job security
Build-to-print and Build-to-performanceTAKE THE BEST OF BOTH WORLDS
Problem Solution Implementation Finances
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Grounded Boarding Take OffMaintenance
Implementation
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LT Implementation Plan
Begin planning Sky Valley
Supplier management programme
2-part identification of suppliers
Non- Critical
vs.Strategic
Problem Solution Implementation Finances
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LT Implementation Plan
Begin planning Sky Valley
Supplier management programme
2-part identification of suppliers
Methods used to grow Sky Valley
Develop Core Competencies
Non- Critical
vs.Strategic -Bargaining
Power &Cost Savings-Incentives to
relocate-Affiliate branch
-Acquisition
Problem Solution Implementation Finances
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LT Implementation Plan
Begin planning Sky Valley
Supplier management programme
2 part identification of suppliers
Methods used to grow Sky Valley
Develop Core CompetenciesTake
Advantage of Benefits
Lower Costs- Less
inventory- Transportati
on- Transaction
Synergies-
Procurement Economies of
Scale-
Communication
- Wastage
Labour- Pool of workers
- Commitment to region: job
security
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Grounded Boarding Take OffMaintenance
Financials
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FinancialsGrowth:• $32bn by 2013
commercial aviation• Following this – 3.2%pa
Incremental Cost of Sky Valley:• Incentives to re-locate :
~$2bn in in first 10 years until critical mass is reached• Higher salaries: more
workers in the USA – based on global wage differences and COGS growth rate
Problem Solution Implementation Finances
Benefits• Reduced penalties:
>$1bn in first 5 years • Transport cost savings:
increase as Sky Valley grows: 50% “near-sourced” by 2015• Labour Dispute
Savings: $150m annually
Qualitative• Efficiency• Communication• Synergies
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Financials
Problem Solution Implementation Finances
$1bn NPV
Discount rate of 11.5%
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Alternatives
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Alternatives
Strategy
Do Nothing
Stop Outsourcing
Sky Valley
Feasible
R
T
R
Suitable
T
R
R
Acceptable
T
R
R
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Conclusion
Conclusion