Boeing Company What Aspects of Boeing\'s Supplier

Boeing Company

What aspects of Boeing's supplier relations program specifically address reduce inventories; maintain quality, regulatory compliance, and competitiveness? How planning and scheduling, ordering, and logistics come into play when running with minimal amounts of inventory.

The relations of Boeing are quite expansive and address all notable concerns of a big business. For it to reduce inventories through its supply chain relations program, Boeing has put in place guidelines and procurement policies, which act as a framework and applied in order to help govern all necessary purchases. Purchasing material of the right quality, quantity, at the right time, at the right price from the right source is one of the organizations overarching procurement tenets. To add to the inventory controls instituted by prudent supply management, Boeing is also known for their incorporation of leaned principles and techniques, which help to maximize efficiency while improving quality and overall safety (Sell, 2005). For maintenance and assurance of Boeing's suppliers, the organization developed an entire cord that it enforces through the acronym BQMS (Boeing Quality Management System). The document gives an outline of the expectations Boeing has of suppliers and denotes the contents as being applicable by contractual agreement between Boeing's supply chain management and the suppliers.

Some businesses are forming efficient consumer response in order to move focus from monitoring costs involved in logistics to controlling supply chains. Customer service is increasingly becoming a key competitive factor as organizations are focusing on the creation of value for the end consumer. In this business atmosphere, inventory is held for two main purposes: reducing costs and improving customer service. Firms have varied motivation as they seek to strike a balance between the problem of too little inventory vs. too much inventory. Firms are aware that too much inventory leads to high costs while too little inventory leads to low sales (Sell, 2005).

A common experience and perception is that managing supply chains results in cost saving through reducing inventory. As of 2002, inventory costs and transportation costs have been on the decline. Such strategies of saving costs have prompted most firms to pursue inventory-reduction approaches within their supply chain. While developing effective logistical approach, firms must have full knowledge of the nature of inventory costs, product demand and capabilities of supply chain (U.S. Government, 2011). Firms can use different strategies in order to manage inventory. Some organizations have employed inventory control strategies, which enables them to control levels of inventory by item. Similarly, manufacturing companies have shown more concern in scheduling production and flow management in order to monitor inventories. Many firms operating in the agriculture industry are not involved in active management of inventory. Instead, they have extensive inventories because savings obtained from reduction of inventory are worse than inventory reductions in transportation, procurement, and production costs. Inventory accumulation can be obtained by running long-term productions (Sell, 2005).