1 of 16

By: Alexandra Zelizer, Marlon Holland, Mackenzie Buss, Kami Mincieli, Jordan Radich

2 of 16

Agenda

Introduction to Cobham Aerospace
Supply problem
Cobham’s solution
Our proposed alternative solution

2/16

3 of 16

Company Background

“a world leading supplier of robust, high performance equipment and solutions that enable reliable connectivity anywhere, anytime, in the most demanding environments.”

3/16

Origins:

Began as Flight Refueling Limited in 1934
Based in Wimborne Minster, Dorset, England
11,000 global employees

Products:

Antennas and Terminals for Satcom

Communication, Navigation and Identification

Aircraft Audio and Radio Management Systems

Services:

Electronics manufacturing services
Defense, Security and Commercial

Aviation
Helicopter rescue and surveillance
Maritime communications

£2.65 billion in annual revenue

£1.3 billion in annual spend

4 of 16

Company Background

4/16

5 of 16

5/16

Spend Profile

6 of 16

Divisions

6/16

7 of 16

Supplier A: Knob Shortage

7/16

8 of 16

Supplier A: Knob Shortage

8/16

9 of 16

Supplier A: Knob Shortage

9/16

Step 4

Regressed performance

Step 3

Lack of monitoring and enforceability

Step 2

Lead times decreased, shipments arrived in full, quality standards met

Step 1

Alert Supplier A of poor performance and discuss improvement

Poor SRM=

5 years of underperformance

Visited Supplier A’s facility once

Conference calls and emails followed

10 of 16

Cobham Switches Supplier

10/16

Approached by Supplier B

Already within supply network. Located in British Columbia, Canada.

Lawyer Consultation

Address IP infringement.

Supplier B Capital Investment

First Article Approval

Aerospace standard to allow product to be manufactured.

Switch to Supplier B

Gradual 12-month phase out of Supplier A.

Estimated cost savings of 40% in purchasing cost

Kami

So going off of what Alex said, this knob supplied by Supplier A had occurred for many years. Cobham was actually approached by one of their other suppliers about the issue. Supplier B suggested that if they were given the opportunity then they would be able to supply this same knob for Cobham and perform better than Supplier A previously had been. Cobham’s supply chain department had extensive discussions about this supplier change and decided to proceed by hiring a lawyer to ensure that there would be no IP infringement when sharing the drawings for the knob with Supplier B. When the lawyer confirmed, they released Supplier B to obtain a mold for the knob in the US and enter into their First Article Approval. The First Article Approval is a standard process in the Aerospace industry for any manufactured product. Once the First Article was approved, Cobham began sending orders for the knobs to Supplier B and stared a gradual 12-month phase out process of Supplier A.

11 of 16

Our Approach

11/16

Substitution of the knob is difficult/impossible
Supplier’s technology is important
Production-based scarcity due to single supplier

We thought of a possible two-step solution

12 of 16

Step 1: Improve Supplier Relationship Management

12/16

Define Investigate Verify and Ensure

3) Verify

Have the team follow up with progress on action items with facility visits to Supplier A

4) Ensure

Define repercussions with Supplier A ahead of time and enforce when applicable

1) Define

Allocate a team to conduct a DIVE to determine the root problem

2) Investigate

Once the problem is defined, create action items that will benefit both parties

13 of 16

Step 2:

Negotiate a Long-term Contract

Schedule Agreement

Gives higher priority to this part
Individual purchase order: easier to manage
Only quantity and date needed
Locked-in pricing
Consequences if faulty or late

13/16

14 of 16

Cost Savings

14/16

15 of 16

Questions?

15/16

16 of 16

Sources

Cobham Avionics. (2010). Specialized Communications

Solutions Product Guide. Retrieved from

https://www.wulfsberg.com/PDFs/Wulfsberg_Product_Guide.pdf

Jonathan Davies. (2018). The Benefits of Supplier Relationship

Management. Retrieved from

http://www.winman.com/blog/bid/366854/the-benefits-of-s

upplier-relationship-management

Jonathan Webb. (2018). How to Manage Strategic Suppliers.

Retrieved from https://www.forbes.com/sites/jwebb/2018/

03/30/how-to-manage -strategic-suppliers/#580d79b67994

Paul Rogers. (2018). Portfolio Analysis. Retrieved from

https://www.scm-portal.net/glossary/portfolio_analysis.sht

ml

Toyota. (2017). State of Flux. Retrieved from

www.stateofflux.co.uk/ideas-insights/case-studies/toyota

16/16