Jan 2, 2020 in Research

Supplier Relationship

The top priority characteristic feature of the supply chain model of Boeing of unconventional type is the structure of supplier. According to the decision made by Boeing, the volume of outsourcing for 787 Dreamliner was increased 20 % more in comparison with various previous models. Therefore, there was an urgent need in the powerful and well-focused management of supplier relationship aimed at reduction in quality variation caused by the supplier. Consequently, the final product control could be increased. The new structure introduced certain changes; for instance, there was powerful strategic partnership of Boeing with the tier suppliers. The number of suppliers is estimated at approximately 50. The newly-introduced practice differs from all the previous ones; thus, it requires handling of the whole structure by the supply chain team with work experience and expertise. Provided that the model operates efficiently, the problems related to a big variety of suppliers can be resolved; therefore, the focus of work can be on close relationship with a limited number of suppliers Boeing has. 

The unconventional supply chain has both benefits and drawbacks. The most significant problem is the supply risk. If the supply chain strategy is introduced by Boeing, every Dreamliner section will be assigned to tier 1 supplier that makes their decisions related to tier 2 suppliers. The SRM work amount for Boeing will be reduced, but the created trade-off will mean that the supplier quality and reliability control may be lost. The problem may be resolved in the following way. Taking into account that the number of Boeing tier 1 suppliers is cut, it is essential for them to be careful while choosing the priority suppliers from the perspective of Supplier Relationship Management. More attention should be paid to those suppliers which are the top priority; therefore, the relationship of the business with them is supposed to be stronger. Moreover, taking into account that the strategic partnership of Boeing with tier 1 suppliers is already built, there should be a clear service and product agreement concluded with the supplier to specify the requirements to the desired quality, principles of up-stream supplier selections and production reliability. Thus, Boeing can prevent possible problems, get extensive control over tier 2 suppliers, benefit from the win-win partnership and enhance the relationships between the businesses.

 

Customer Relationship

Furthermore, Boeing experiences multiple problems related to the delay in the process of manufacturing, in particular the problem with suppliers discussed above. The caused obstacles produce negative effect on the travelers and on the airline customers. For instance, the mentioned case deals with the delay in producing 787; as a result, the orders of numerous customers were cancelled, while other customers are supposed either to receive compensation from Boeing or to be offered other models of aircraft. To my mind, the efforts of Boeing aimed at dealing with dissatisfaction of the customers were sufficient. However, it is a matter of bigger importance to take the proactive management actions in customer service before there are the problems. 

First and foremost, the company always benefits from the well-built relationships with the customers and efficient communication. This approach always facilitates the customer service and increases the profitability of the company. Besides, business performance also benefits from the efficient management of customer relationships, especially if there are some problems. Effective communication between the company and the customers influences the decisions made by the customers and helps to prevent the business losses. Due to the lack of information regarding the methods Boeing applied to deal with the matter, I cannot analyze them in detail. However, I can assume that there are service segments in Boeing established on profitability and development of customer relationship. The mentioned measures aim at maximizing the profits and preventing all kinds of disappointment among the best customers if there are some unavoidable problems. No customer should be discriminated or neglected; therefore, Boeing is supposed to establish the treatment of all customers on the basis of equality in quality of services and appropriate conditions. In case Boeing cannot take measures aimed at satisfying the needs of all customers, the choice is supposed to estimate all the losses and avoid unnecessary ones. 

Manufacturing Issue

One more crucial issue to discuss is the interchangeability problem of the 787 engine. According to the design, Dreamliner has two interchangeable engines manufactured by different companies. The design can be referred to as good for the ideal conditions; however, the usage is problematic as there is lack of manufactured parts and the flow of standardized manufacturing is problematic. There should be more attention paid to the management of manufacturing flow from the perspective of supply chain perspective; therefore, it is possible to ensure implementation of the feature developed by the work of standardization. That way the business efficiency is improved and the airlines and Boeing can get more profits.

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