Boeing Australia Limited (BAL) is a global extension of the Boeing Company whose head office locates in the United States.
BAL developed capabilities in the areas of space and communications, site management and the upgrade and maintenance of military aircraft and equipment. As BAL grew, it faced difficult decisions how to improve or upgrade its procurement system and process to meet its customers’ requirement, especially its major customer the Australian Defence Force (ADF).
Comparing to the option of upgrading the whole procurement system, my recommendation aligns with Russell Menere (National Procurement Manager of BAL)’s idea, which is to implement short term improvements based on current procurement system in …show more content…
1, BAL could invest in a new system that would simplify the procurement process across different divisions and support complex interfaces with suppliers.
Pros: New system would be working with best efficiency and BAL would be very competitive in term of productivity. Standardization would also benefit in a long-run.
Cons; Cost would be very high and returns would be low at this point of time due to relatively small company size. Applications sometimes may also have overlap functions with each other.
2, Alternatively, BAL continues to sit on the fence and seek short-term improvement tools for integration with its existing legacy systems.
Pro: This is a cost effective option and BAL has the capability to programme interfacing between applications where necessary. They had multi-systems already well in use, such as ProPricer, OPP, and COBRA, etc.
Cons: If competitors enhance their IT infrastructures at a much faster speed and if this is what customers favour in the near future, BAL would risk losing market share due to lack of IT competitiveness, which directly relates to cost savings, effectiveness or economy of scale, etc.
Considering the constraints of budget, the company size of BAL and the tight business relationship with the ADF, I recommend that BAL should go ahead with the short-term improvement plans instead of upgrading the entire procurement system.