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An Exploration of Supply Chain Management Practices in the Aerospace Industry and in Rolls-Royce by Mohit Tiwari Master of Business Administration Case Western Reserve University Submitted to the Engineering Systems Division in Partial Fulfillment of the Requirements for the Degree of Master of Engineering in Logistics at the

MASSACHUSES INSt
OFTECHNOLOGY

Massachusetts Institute of Technology
June 2005

JUL 152005 LIBRARIES

© 2005 Mohit Tiwari. All rights reserved
The author hereby grants to MIT permission to reproduce and to

distribute publicly paper and electronic copies of this thesis document in whole or in part.

Signature Author................. of

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May 6, 2005

Engineering Systems Division

Certified by ........................................................................... &Kirtor Bozdogan Principal Research Associate Center for Technology, Policy and Industrial Development TheiS Supervisor

Accepted by ....................................................................................

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Dr. Yossi Sheffi

Professor of Civil and Environmental Engineering Professor of Engineering Systems Director, MIT Center for Transportation and Logistics

ARCHIVES

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An Exploration of Supply Chain Management Practices in the Aerospace Industry and in Rolls-Royce by Mohit Tiwari Submitted to the Engineering Systems Division on May 6, 2005 in Partial Fulfillment of the

Requirements for the Degree of Master of Engineering in
Logistics

Abstract
This thesis is a part of the Supply Chain 2020 research project which seeks to study best practices in supply chain management in multiple industries in order to develop a deeper understanding of key principles and practices characterizing the creation of excellent supply chains through a long-term research agenda. This thesis addresses the first phase of the research by concentrating on the aerospace industry and by focusing on Rolls-Royce through a case study. The objective of the thesis is to conduct an exploratory study of the best practices in supply chain management in the aircraft engine manufacturing industry, and how these practices impact the competitive positioning of an engine manufacturer within the industry. The analysis involves a broad review of the current state and future directions of the aerospace industry by tracing the key factors shaping its evolution and by identifying the major strategic forces that would

influence its future. Within this general industry context, the thesis analyzes Rolls-Royce's position in the industry as a leading aircraft engine manufacturer and presents a focused study of Rolls-Royce's supply chain management practices.. In particular, the thesis involves a deeper exploration of the aircraft engine manufacturing business segment of Rolls-Royce and strives to understand the company's supply chain management practices, by examining the role of major factors that have proven crucial to effective supply chain management within the company. The thesis also presents more specific case study examples that track the implementation and results of major supply chain

management initiatives. Finally, the supply chain design and management practices are analyzed from the perspective of their role in the company's business strategy. This is accomplished by

employing a number of business strategy frameworks to understand the key factors that determine the competitiveness of a tier one supplier in the aerospace industry, such as RollsRoyce, and by examining how those factors have affected Rolls-Royce's supply chain management strategies and practices. Thesis Supervisor: Dr. Kirkor Bozdogan

Title: Principal Research Associate, Center for Technology, Policy and Industrial Development

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Acknowledgements
I would like to thank my thesis advisor, Kirk Bozdogan, for his patience and valuable guidance during this project. His advice and suggestions helped me...
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