Dehavilland Inc Essay

With the current proceedsion and upcoming product development and rivets up de Havilland Inc. decided that that the flap shroud and equipment bay door vendor arrangements need to be revueed. With no solid contracts in place and the request to review vendors and wince costs. Creating want term relationships and multiple contracts gives the flexibility de Havilland requires.Issue assignment Immediate Issue Changing vendors for the supply of the flap shrouds and equipment bay doors out-of-pocket to the grudgingness of Dollard reducing their costs by 25%. de Havilland Inc. believes that their could be satisfying nest egg in total manufacturing. Some vendors be shapeing without whatever contracts and any possible savings they could be losing without having contracts in place. The risks of moving to a new vendor atomic number 18 the sustainability of the company for the long term and product durability. Is Marton Enterprises going to be able to celebrate up with production and reserve a quality product.Long term Vendor relationships de Havilland currently has both major providers for the flap shrouds and equipment bay doors. With no firm contracting or relationships in place. A sm tout ensemble base of vendors creates closer partnerships. But having sensation supplier of both products could create problems on the reliability and having one supplier means you rely only on that vendor. De Havilland would be at their kindness if economic and production activities were to come to a halt. Greater ability to renegociate with the possibility of non having to search for new vendors.Long term edit pricing Cost savings on both sides for de Havilland and their customers. Firm, fixed prices would reduce the need for frequent negotiations.Environmental and radical Cause Analysis Root CausesCurrently Dollard Plastics of Montreal, Quebec supplies them with the flap shrouds. But move for the serial publication 100 were not covered by any contract but the flap shrouds for the Series 300 A were supplied nether a contract that would expire in 1993. Currently Lakeside Industries based in Kingston, Ontario supplied all equipment bay doors with no specific contract in place. When Dollard was presented with a request of 25% price reduction across the board for the flap shrouds because de Havilland believes that Dollard is on the high side. Dollard refused, that then was the terra firma to put it to competitive bid.Because of the policy that Boeing had implemented and a request was do to reduce costs by 25% and the current supplier Dollard was unwilling to lower their costs on the flap shroud. The purchasing process go to solicit a number of bids. Since some vendors have contracts and others dont de Havilland felt they could capture cost savings through more than contracts with more vendors and reduce the need for frequent negotiations. Production IssueMoving to Marton Enterprises de Havilland doesnt know the type of work they do and if th ey could keep up with production. With Marton providing all parts for the flap shrouds and equipment bay doors the reliability is great on ensuring parts are manufactured on time. How is it that Marton can produce the flaps and doors for essentially less than Dollard? Have Marton create a prototype and verify the real being used. Ensure all tooling is usable.Implementing the strategic goal of having several vendors and contracts for long term alliances alleviates the need to go out to bid every year. Relationships are built with the current vendors and competitive pricing is in place. This type of contract is easier to manage and production and financial forecasting is easier to predict. alternates and or Options Alternative 1 Keep things as they are for contracts and vendors. Pro We know the quality of work from Dollard and dont need to worry about keeping up with production. Reliable. Con But the unwillingness to cut costs is a concern.Alternative 2 Have many contracts with mul tiple vendors. Pro Having many vendors including Marton to necessitate from gives the flexability de Havilland wants with cost savings, firm pricing and vendor relationships. Huge cost savings compared to the other companies Con Unsure of quality and if they are reliable to keep up with production. Currently Kevlar is being used and the other choices were nickel, graphite and aluminum. These choices had important implications for tool cost and durability.Recommendations I recommend Alternative 2. There are real cost cutting savings with moving to Marton. By leverage more than one vendor and contract the flexability will be available for suppling the flap shrouds and equipment bay doors. This will have all vendors working under the same policy Boeing has implemented since taking over deHavilland. Create contracts for vendors not under contract right now.