Boeing subcontractors may be a little relieved. About 27,000 Boeing employees decided to strike this past Saturday after their expectations were not met in a new three-year contract. Suppliers will receive a bit of a cushion and should seize this opportunity to analyze supply chains, ramp up production, and perform an overall assessment of their operations. One of the underlying reasons for Boeing’s 787 Dreamliner being behind schedule is due to suppliers not being able to deliver their components on time.

The longer the strike lasts, the longer customers will have to wait for a finished product. The only party with time on their side is suppliers; that is, if they are behind schedule. One company, Spirit, is actually cutting back the hours of its employees who have been working on products associated with the 787. The company, having already experienced a Boeing strike a few years ago, is making every effort to avoid negative repercussions from the strike.

Some blame the strike on Boeing’s approach to its outsourcing. Boeing is producing its 787 with 70% of its components being delivered from outside suppliers. Many of Boeing’s contractors are located in different countries. It is no surprise that the plane is behind schedule and employees are upset. Employees fear that eventually 100% of Boeing’s planes’ components will be outsourced. Boeing should have planned accordingly, analyzing the risk involved with such a major part of their production relying on outside sources.

For many companies, outsourcing has provided for a bright spot on financial statements. The spot is not as bright for those companies who have been forced to recall products due to flaws in their outsourcing process. And now, Boeing may be starting to regret its outsourcing approach. For more details on the strike, take a look at the following article: “Boeing suppliers look for strike's silver lining

Companies who are looking for opportunities to save but do not wish putting themselves at risk by outsourcing production can generate savings at no extra cost to their bottom line. By reaching out, or to avoid the use of jargon, by making a phone call to a procurement service provider, savings can be realized in direct and indirect categories.
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Kathleen Jordan

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