BAL case study
Executive Summary
Boeing Australia Limited (BAL) is a global extension of the Boeing Company whose head office locates in the United States.
BAL developed capabilities in the areas of space and communications, site management and the upgrade and maintenance of military aircraft and equipment. As BAL grew, it faced difficult decisions how to improve or upgrade its procurement system and process to meet its customers’ requirement, especially its major customer the Australian Defence Force (ADF).
Comparing to the option of upgrading the whole procurement system, my recommendation aligns with Russell Menere (National Procurement Manager of BAL)’s idea, which is to implement short term improvements based on current procurement system in view of budget constraints.
The main idea of this short-term improvement includes, achieving supplier consolidation by 2006, with a total of 600 suppliers approximately; 10% cost deduction in two years by implementing supplier feedback system and managing supplier relationship; and introduction of new system or function such as Credit-card Purchasing and materials Management Process council to benefit BAL in cost saving and productivity enhancement.
Issue Identification
Immediate Issue
In 2002, with new opportunities available through e-business technology, BAL needed to decide what company’s next step should be. One of the biggest challenges would be how to find an appropriate procurement system that could provide mutual benefits to BAL and its suppliers within budget constraints.
Systemic Issue
1, Four Isolated Divisions and BAL’s Though BAL relocated its four divisions under one roof which enabled BAL to achieve some synergies, those functions were still autonomous in many ways. They found and executed their own work, and reported the same measuring criteria in financial dollars, project performance and product quality term, as well as a range of other measures required by BAL’s balanced scorecard. At
Boeing Australia Limited (BAL) is a global extension of the Boeing Company whose head office locates in the United States.
BAL developed capabilities in the areas of space and communications, site management and the upgrade and maintenance of military aircraft and equipment. As BAL grew, it faced difficult decisions how to improve or upgrade its procurement system and process to meet its customers’ requirement, especially its major customer the Australian Defence Force (ADF).
Comparing to the option of upgrading the whole procurement system, my recommendation aligns with Russell Menere (National Procurement Manager of BAL)’s idea, which is to implement short term improvements based on current procurement system in view of budget constraints.
The main idea of this short-term improvement includes, achieving supplier consolidation by 2006, with a total of 600 suppliers approximately; 10% cost deduction in two years by implementing supplier feedback system and managing supplier relationship; and introduction of new system or function such as Credit-card Purchasing and materials Management Process council to benefit BAL in cost saving and productivity enhancement.
Issue Identification
Immediate Issue
In 2002, with new opportunities available through e-business technology, BAL needed to decide what company’s next step should be. One of the biggest challenges would be how to find an appropriate procurement system that could provide mutual benefits to BAL and its suppliers within budget constraints.
Systemic Issue
1, Four Isolated Divisions and BAL’s Though BAL relocated its four divisions under one roof which enabled BAL to achieve some synergies, those functions were still autonomous in many ways. They found and executed their own work, and reported the same measuring criteria in financial dollars, project performance and product quality term, as well as a range of other measures required by BAL’s balanced scorecard. At