Good article here at ITBusinessEdge by Ann All discussing the challenges Boeing has faced with its global supply chain for its new Dreamliner 787 jet.  As you’ve probably read, Boeing took a very aggressive outsourcing strategy for this project.  What they’ve come to realize, like so many others, is that doing so is a double-edged sword with lots of benefits and risks.

If everything goes according to plan, outsourcing doesn’t represent a lot of problems since a well laid out plan simply needs to be executed.  The reality is that things rarely go exactly according to plan.  This is where outsourcing can pose unique challenges since you’re now working with multiple third parties.  The problem I’ve seen a lot of companies take is that they continue to treat this situation as if they were still doing all the manufacturing.

When companies outsource, they continue to remain accountable for all of the outcomes despite the fact that they are no longer executing all aspects of the project.  Their role shifts to that of master coordinator and the emphasis needs to be on coordinating an effective response to change as it comes up.  A pre-requisite to doing so is visibility.  This isn’t to micro-manage the partners, but to ensure that exception based alerts are possible and to facilitate active resolution of problems.

Failure to properly coordinate response to change across the virtual enterprise can lead to poor operating performance, inventory control challenges and project delays.

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Posted in Best practices, Supply chain collaboration, Supply chain risk management
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