Boeing said its new supply chain organisation would be more efficient, effective and nimble ©Boeing
Boeing said its new supply chain organisation would be more efficient, effective and nimble ©Boeing

Boeing plans ‘step-change’ in supplier management

13 November 2017

Boeing is planning a major reorganisation of the way it manages its supply chains that will see it consolidate the function across a number of departments.

The aerospace firm will seek to cut costs by bringing four separate departments under one larger supplier management group, the Washington-based Puget Sound Business Journal reported.

The Journal also said the restructure could lead to layoffs, starting as early as today.

Boeing would not comment further on the nature of the restructure or on the possibility of layoffs, but a spokesman told SM the changes would be a “step-change improvement” to supply chain management.

He said the new supply chain organisation would be structured to be “more efficient, effective and nimble”.

“Just as we expect and work with suppliers to improve their operations, we also are taking action within Boeing to improve performance and efficiency,” he said.

“Our goal is a step-change improvement in supply chain management to support Boeing’s aspiration to be a global industrial champion.

“The new supply chain organisation will be structured to be more efficient, effective and nimble. Its design focuses on improving strategy development, procurement processes, contracting and fulfilment operations, in addition to streamlining bureaucracy that impacts on our teams and suppliers,” he said.

Boeing’s supply chain accounts for 65% of the cost of every airplane, the spokesman said.

Boeing’s reported a higher than expected revenue figure of $24.3bn in Q3 this year, up 2% on the same quarter last year. However its first nine months revenue was down 5% on the same period last year.

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