Boeing Australia Limited Case Analysis

1432 Words May 21st, 2015 6 Pages
Boeing Australia Limited: Assessing the Merits of Implementing a Sophisticated e-Procurement System

XUELAI (ANDY) HU

Contents
Contents 1
Executive Summary 2
Issue Identification 2
Environmental and Root Cause Analysis 3
Environmental and Root Cause Analysis 3
Rationalisation and Management of Suppliers 4
Introducing Credit-card Purchasing 4
Formation of the Materials Management Process Council 4
Alternatives or Options 4
Recommendations and Implementation 6
Recommendations 6
Implementations 6
Monitor and Control 7
Reference 8

Executive Summary
Boeing Australia limited (BAL) is the global extension firm of the Boeing Company in US, with operations in 12 locations around Australia and major business in areas of space
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Russell Menere, National Procurement Manager of BAL had set a new policy to rationalise BAL’s supplier base to reach a target of 600 over 6 years. BAL’s estimated procurement expenditure was approximately $100 million in 2002. Russell had broken down their suppliers into a total number of 25 commodity groups each with an alphabet letter to present. BAL launched a supplier management programme gave suppliers feedback on how well they perform, at the same time gave feedback from suppliers on how BAL’s performance, the first “BAL Supplier Awards” were presented in November 2002 (Ashworth, 2003).
Introducing Credit-card Purchasing
In order to reduce order-to-delivery cycle time, BAL has introduced the online ordering tools initially. However, these tools were not connected to BAL’s back-end systems. In addition, BAL’s legacy systems did not support interfacing with suppliers’ Web browsers, details of each order had to be physically entered in to BAL’s ERP system. To fix the problem, Russell brought the credit-card system to simplify the purchasing process (Ashworth, 2003).
Formation of the Materials Management Process Council
BAL formed a Materials Management Process Council in 2002 to improve productivity, and in response to complaints by internal customers about inefficiencies in the purchasing process. Approximately seven people across the divisions were working in MMPC (Ashworth, 2003).
Alternatives or Options
1. BAL should invest in a new cost effective

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