...Case Study | De Havilland | | Executive Summary Financial analyst, Kim Tomar is a Financial Analyst at De Havilland Inc, a Canadian aircraft manufacturing company. Her responsibility within procurement is to evaluate bids and make recommendations to De Havilland Source Selection Board (SSB). She must make a recommendation on a supplier for flap shrouds and equipment bay doors. Since Dollard Plastics has failed to remain competitive by addressing the high pricing by unwilling to lower their price, she has solicited a number of competitive bids from 9 suppliers. We currently have sufficient supply of flaps and doors till the end of 1993, giving us approximately 17 months of inventory. Recent changes at de Havilland meant that we wanted to establish long term, cooperative contracts with suppliers. Normally 6-8 weeks were permitted for the vendors to return their completed bids. The value of the contract under consideration required the more senior management participated. The Bidder Selection Board (BSB) was comprised of representatives from finance and materiel areas. The BSB had four major objectives; review historical data in purchasing and cost patterns, financial data, quality and product support, secondly they produced an estimate on future purchasing trends for the part as well as new costs and finally they assembled a list of potential bidders. Once all bids were normalized they analyzed them, picked the likeliest candidate and a physical inspection was conducted...
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...Executive Summary De Havilland (Havilland) is Canadian aircraft manufacturer that was recently acquired by Boeing. The parent company has requested Havilland take on several initiatives including seeking 25% price reductions from suppliers, reducing the total number of suppliers and seeking more long-term fixed pricing agreements. Havilland recently received submissions for an RFQ for the supply of supply flap shrouds and equipment bay doors. The pricing received raises some concerns however, as there are large variations in pricing between the lowest price from Marton Enterprises Inc. (Marton) and the highest price from the incumbent, Dollard Plastics (Dollard). There are several viable alternatives for Havilland. They may accept the bid from Marton on the condition that it is assured Marton fully understands the scope, their facilities are sufficiently equipped, and they provide their financials. It will be in Havilland’s best interests not to pursue their policy under the Bidder Selection Board (BSB) to attempt to renegotiate the price lower since Marton already provided substantial savings. The next option for Havilland is to pursue the first option but only given Marton 80% of the work for the first year and keep the incumbent under contract for the remaining 20% of work. The third option is to cancel the RFQ, clarify with the bidders what was unclear in the specifications that resulted in such a wide variation in pricing and go out for bids again. The final option...
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...Case Report- DeHavilland Inc. CASE ANALYSIS CONTENT | | MARKS AVAILBLE | EXECUTIVE SUMMARY | De Havilland had high inventory and high manufacturing cost which has been caused by the high cost of sourcing the flap shrouds and bay doors from Dollard Plastics of Montreal and the company was looking forward to an alternative supplier with a long time relationship. I found they were less of strategy and more tactical. The total parts cost of Dash 8 airplane at De Havilland represented 60-65% of their total manufacturing cost. It’s is evident that the company has recognized that and they have taken steps to solve this issue. A further indication that the company is operating at high cost is their previous failed attempt when they requested a 25% discount on all parts across the board. Dollard Plastics of Montreal is currently supplying the company with the parts needed but at about 3 times higher than Morton’s quote. The uncertainty that De Havilland was going through at this point in terms of choosing the right supplier who was going to be reliable enough to commit to a 5 year fixed contract with the company. The company wanted to move to a smaller base of vendors but should not be sore source without a backup plan. The company focused on cost reduction but cost should not be the only criteria of vendor evaluation and selection. The whole structure and process did not respect the strategic role of procurement, as well as tactical approaches that support the strategy. Such as Kim...
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...Executive Summary De Havilland (Havilland) is Canadian aircraft manufacturer that was recently acquired by Boeing. The parent company has requested Havilland take on several initiatives including seeking 25% price reductions from suppliers, reducing the total number of suppliers and seeking more long-term fixed pricing agreements. Havilland recently received submissions for an RFQ for the supply of supply flap shrouds and equipment bay doors. The pricing received raises some concerns however, as there are large variations in pricing between the lowest price from Marton Enterprises Inc. (Marton) and the highest price from the incumbent, Dollard Plastics (Dollard). There are several viable alternatives for Havilland. They may accept the bid from Marton on the condition that it is assured Marton fully understands the scope, their facilities are sufficiently equipped, and they provide their financials. It will be in Havilland’s best interests not to pursue their policy under the Bidder Selection Board (BSB) to attempt to renegotiate the price lower since Marton already provided substantial savings. The next option for Havilland is to pursue the first option but only given Marton 80% of the work for the first year and keep the incumbent under contract for the remaining 20% of work. The third option is to cancel the RFQ, clarify with the bidders what was unclear in the specifications that resulted in such a wide variation in pricing and go out for bids again. The final option...
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...DE HAVILLAND Case Report January 20, 2015 Table of Contents Executive Summary 3 Issues Identified 3 Environmental and Root Cause 3 Alternatives and Options 4 Implementation 5 Recommendations 5 Monitor and Control 6 Conclusion 7 Executive Summary This case report addresses many factors when decisions are made in identifying and working strategically with custom designed components and assemblies. De Havilland Company especially Kim Tomar has a decision to make. A RFQ proposal by Marton Enterprises could bring cost reductions down by 60% for this particular assembly and help with streamlining BOM cost to achieve a reduction of 25%. There’s risk to using a new vendor, including delivery and trust and even if the correct SSB members are evaluating the proposals. There are discrepancies that need to be reviewed and questioned by the Operations, Logistics and Sourcing staff and hidden costs not noted on the price breakdowns ie: soft and hard tooling costs. Marton must prove to the SSB group and OLS that their proposal is solid and can manufacture and meet spec’s as identified by De Havilland Engineers. There also needs to be plan to increase capacity should there be an upswing. My recommendations include two options including a primary and secondary vendor model (mitigating risk of custom components and shortages and working with the existing vendor Dollard Plastics to looks for ways of continuous...
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...IDENTIFIED Long Term The major concern for De Havilland is their high manufacturing cost for bill of material, which range from 60% to 65%. This presents a challenge for being price competitive in the market, therefore it is important for De Havilland to take some initiatives to discount cost for all the parts. Also, De Havilland has concern over their large portfolio of vendors that would stop them from capturing economies of scale and pass cost reduction along. The company has recognized the need to minimize the size of vendors, initiate long term contract, moreover, to simplify their purchasing cycle. Short Term The uncertainty that De Havilland is going through at this point in terms of choosing the right supplier who is going to be reliable enough to commit to a 5 year fixed contract with the company for supplying flap shrouds and equipment bay doors. ENVIRONMENTAL AND ROOT CAUSE ANALYSIS Potential Barriers Both companies has a parent company that could have major impact on their agreement. The parent companies can potentially over-turn any decision made by either de Havilland or Marton at their discretion.The reasons they could over-turn could be based on previously established relationships or political reasons. Besides the influence from parent companies being the potential barriers, there are some other roadblocks. As Marton states that their bid price is very competitive, not up for negotiation, if De Havilland continue to force their model of three price...
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...1. Executive Summary After having full exposure to the cost structure of De Havilland’s Dash 8 airplane I immediately becameaware of their high manufacturing cost which has been caused by the high cost of sourcing the flapshrouds and bay doors from Dollard Plastics of Montreal. The latter showed no flexibility on reducingtheir prices on the above parts when the former was in search of ways to improve their productionefficiencies by reducing the cost attributed to Dash 8 airplane. Kim Tomar, the Financial Analyst at DeHavilland had realized that issue and therefore started the process of finding a new business partner whois capable of meeting a set of standards that De Havilland had developed earlier for their procurementdepartment, had started the process about year and half earlier than the expiry date with the incumbentsupplier.After receiving 9 bids to supply the needed parts, I have recommended Morton to De Havilland’sSource Selection Board (SSB) as prospective vendor for selection provided that Mortonmust pass the set of standards which I mentioned above. Based on the initial information fromthe normalized bids from all nine bidders, the lowest bid was Morton Enterprises. Their bid was18% lower than their nearest competitor, and when I compared prices of the needed components tothe prices supplied by current providers they were between 54% and 75% less expensive.However, beyond parts cost reduction we are also interested in establishing long-termco-operative contracts with...
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...commercial aircraft business and reduced military spending, The Boeing Company was forced to downsize approximately 55,000 people over a five-year period. The company's management, organized labor, the local community, multiple levels of government, and community colleges collectively worked together to develop Reemployment Centers to assist in the transition of their specialized workforce into alternative forms of employment. The following is a description of how The Boeing Company successfully completed this effort at downsizing. Downsizing is thought to be an effective human resources strategy to increase global competitiveness. Labor costs, generally one of the largest costs for most organizations can be reduced through downsizing. In many cases the downsizing process includes outsourcing or subcontracting jobs previously performed within the organization. Although organizations often consider downsizing necessary in order to remain competitive, this strategy does not always result in increased organizational profitability and performance. One recent survey conducted by the Society for Human Resource Management reported that only 26% of firms reported productivity improvements while 58% said that productivity was flat or had declined after downsizing (The Washington Post, 1996). In addition, the study found that approximately 54% of companies surveyed cut jobs in 1994 but only 25% expected any further downsizing. Whatever the future course of downsizing, many companies have utilized...
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...[pic] Module TWO - Supply Chain Management DE HAVILLAND INC: Supply Chain Strategy Case Study Prepared By: Pankaj Kapoor Executive summary De Havilland’s Dash 8 aircraft division has only a “year plus” inventory of Flap Shrouds and Equipment bay doors and now they have to decide if they want to continue sourcing these parts from same supplier “Dollard Plastics” a Montreal based supplier or should they start thinking of sourcing these parts from other potential suppliers. Kim Tomar, financial analyst materials of DH has responsibility to gather all related facts, Analysis and come up with report & recommendations. Since De Havilland is now under new management of Bombardier Inc. Kim Tomar has to keep Bombardier’s following new policies in mind while making any recommendations. (Exhibit 2: DH Organizational Chart), • 25% discount on purchases across the board • Establishing 5 year fixed cost contract with suppliers • Consolidation of sources / reduction of suppliers Kim Tomar had received good response from nine potential suppliers on RFQ sent by BSB (Exhibit 3 reflects the bidding structure from each supplier). After normalization, it was evident that Marton Enterprises Inc, offered huge savings and also ready to commit to all policies including fixing the cost for next 5 years...
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...De Havilland is a very successful and well known name in the aviation industry. The company has been procuring Flap Shrouds and Equipment Bay doors from two of its major vendors. However Dollard Plastics, the Flap shroud vendor refused any renegotiations with de Havilland. Kim Tomar, the Financial Analyst at De Havilland had realized that issue and therefore started the process of finding a new business partner who is capable of meeting a set of standards that De Havilland had developed earlier for their procurement department, had started the process about year and half earlier than the expiry date with the incumbent supplier. After careful analysis of the nine bids received by de Havilland, I recommended Morton to De Havilland’s Source Selection Board (SSB) as prospective vendor. Based on the initial information from the normalized bids from all nine bidders, the lowest bid was Morton Enterprises. Their bid was 18% lower than their nearest competitor, and when I compared prices of the needed components to the prices supplied by current providers they were between 54% and 74% less expensive. However, beyond parts cost reduction we are also interested in establishing long-term co-operative contracts with the vendor. So, apart from determining who had the best price offer, I need to determine whether Morton is sufficiently stable to be relied upon in the long run. So my strategic intention here is to negotiate an agreement with Morton that will be of the greatest value possible...
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...Table of Contents Executive Summary 4 Issues Identification and Case Analysis 5 Alternatives or Options 7 Recommendation 9 Implementation 10 Monitor and Control 11 Executive Summary At De Havilland Inc. we have been in business since 1928 and have come a long way since then. After many acquisitions and mergers and now bought by Bombardier Inc we have been a major part of Canadian aircraft manufacturing industry. With the influence of Bombardier we are making strategic decisions to focus on cost reductions, long term vendor relationships and reduce number of vendors we use at De Havilland. Focusing on cost reductions we have requested a 25% cost reduction on the flap shrouds pricing and Dollard Plastics who is the current supplier has turned us down. Now after looking at nine bids Marton Enterprises Inc. has been chosen as the preferred vendor which will meet the terms that BSB was looking for. This new relationship...
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...Bakgroud of Malaysia Airlines System Berhad Scheduled air passenger and mail services in Malaya commenced in 1937 when Wearne's Air Service (WAS) commenced operating services between Singapore, Kuala Lumpur and Penang. Wearne's Air Service was started by two Australian brothers, Theodore and Charles Wearnes. The service commenced as a thrice weekly flight between Singapore and Penang The first flight, using an 8-seater de Havilland DH.89A Dragon Rapide took place on 28 June 1937 This inaugural flight departed Singapore from the then brand-new Kallang Airport which had just opened earlier in the same month on 12 June Later a second D.H.89A enabled the expansion to daily services as well as the addition of Ipoh as a destination. The WAS services ceased with the onset of the Second World War Japanese occupation of Malaya and Singapore. An initiative by the Alfred Holt's Liverpool-based Ocean Steamship Company, in partnership with the Straits Steamship Company and Imperial Airways, resulted in the incorporation in Singapore on 12 October 1937, Malayan Airways Limited (MAL). But the first paying passengers could be welcomed on board only some 10 years later. After the war, MAL was restructured to include just the partnership of Straits Steamship and Ocean Steamship. The airline's first flight was a charter flight from the British Straits Settlement of Singapore to Kuala Lumpur, on 2 April 1947, using an Airspeed Consul twin-engined aircraft. This inaugural flight on the "Raja Udang"...
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...The Discipline of Innovation by Peter F Drucker . Reprint r0208f August 2002 HBR Case Study The Sputtering R&D Machine Martha Craumer r0208a Voices Inspiring Innovation Creativity Under the Gun Teresa M. Amabile, Constance N. Hadley, and Steven J. Kramer r0208b r0208c The Failure -Tolerant Leader Richard Farson and Ralph Keyes r0208d r0208e Breaking Out of the Innovation Box John D. Wolpert Best of HBR The Discipline of Innovation Peter F Drucker . r0208f r0208g r0208h r0208j Research That Reinvents the Corporation John Seely Brown Tough-Minded Ways to Get Innovative Andrall E. Pearson Organizing for Innovation: When Is Virtual Virtuous? Henry W. Chesbrough and David J. Teece Creativity Is Not Enough Theodore Levitt r0208k In Closing Stumbling into Brilliance Danny Hillis r0208l BEST OF HBR 1985 The Discipline of Innovation by Peter F Drucker . How much of innovation is inspiration, and how much is hard work? If it’s mainly the former, then management’s role is limited: Hire the right people, and get out of their way. If it’s largely the latter, management must play a more vigorous role: Establish the right roles and processes, set clear goals and relevant measures, and review progress at every step. Peter Drucker, with the masterly subtlety that is his trademark, comes down somewhere in the middle. Yes, he writes in this article, innovation is real work, and it can and should be managed like any other corporate function. But that doesn’t mean it’s the...
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...Target Segmentation 1.1 Introduction Red Bull is a non-alcoholic energy drink and therefore falls under the category of soft drinks. Soft drinks can be divided into sub-segments and one of these segments is energy and sports drinks. These can be divided again into three different categories: • Glucose energy drinks • Sport drinks • High energy stimulation drinks • Since 1996 the market of soft drinks has grown by 5% and by 1997 it reached a total amount of £6.896bn, which is an equivalent of 10bn liters. Moreover we can say that the segment of energy and sports drinks represents 2.6% or £177m of the overall soft drink market. Since 1992 an increase of 64% in volume sales can be found within this very young market of energy and sports drinks. • The main differences of the three above mentioned sub-segments of soft drinks are as followed 1.2 Glucose Energy Drinks These drinks provide physical energy through glucose or a mixture of sugars. Originated from the Lucozade brand. These drinks do not contain any other substantial ingredients such as Lucozade Energy, Lucozade NRJ or Red Card. In 1927 they were originally positioned as a convalescence drink. 1.3 Sports drinks Also known as isotonic drinks, replaces body fluids after sport activities or exercises. Sport drinks help to re-energize and re-hydrate the body and can be taken before, during or after exercises. That’s because you should drink it in great amounts and fairly quickly, they are usually...
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...Agricultural aircraft are also used for hydro seeding. Crop dusting with insecticides began in the 1920s in the United States. The first widely used agricultural aircraft were converted war-surplus biplanes, such as the De Havilland Tiger Moth and Stearman. After more effective insecticides and fungicides were developed in the 1940s, and aerial topdressing was developed by government research in New Zealand, purpose-built agricultural fixed-wing aircraft became common...
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