Supply Chain Management Control in the Aerospace Sector: An Empirical Approach
Abstract
1. Introduction
2. Literature Review
2.1. Aerospace Supply Chain Characteristics
2.2. Outsourcing in Supply Chain Management
2.3. Management Control Mechanisms and Interfirm Relationships
3. Methodology
4. Findings
4.1. The Outsourcing Process: Selection and Execution
4.2. Interorganizational Control Mechanisms
5. Discussion and Conclusions
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
Correction Statement
References
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Challenge | Description | Literature |
---|---|---|
Complexity and Specialization | High levels of specialization and complexity require significant investment in R&D for technological advancements. | [2,15,16] |
Regulatory Compliance | Stringent governmental regulations lead to increased quality assurance requirements and certification controls. | [3,5] |
Market Concentration | The aerospace market is dominated by a few major players, limiting supplier options and bargaining power. | [10] |
Order Volatility | Large but infrequent orders from airlines create uncertainty and volatility in the supply chain. | [6,17] |
Limited Visibility | Many companies lack comprehensive knowledge of risks associated with suppliers in the third tier and beyond, leaving them vulnerable to potential disruptions in the supply chain. | [11,14] |
Dependency on Long-Term Relationships | Emphasis on long-term relationships can limit flexibility and the ability to explore alternative sources. | [6,18,19] |
Theme | Questions |
---|---|
Supply Chain Management |
|
The Outsourcing Process |
|
Control Mechanisms in IOR |
|
Interview Number | Company | Job Position |
---|---|---|
Interview #1 | Prime Contractor | Quality Improvement Leader |
Interview #2 | Supplier | Manager Content |
Interview #3 | Prime Contractor | HO Supply Chain |
Interview #4 | Prime Contractor | Materials Manager |
Interview #5 | Supplier | Operator Program |
Interview #6 | Prime Contractor | Partner |
Interview #7 | Prime Contractor | IT Manager |
Stage | Definition | Agents Involved |
---|---|---|
1. Need Identification | The internal client (a department) identifies a requirement that necessitates outsourcing. | Internal Client |
2. Request for Information | Information is requested from potential suppliers to gather preliminary data. | Internal Client, Procurement Department, Suppliers |
3. Technical Specification | The internal client drafts a detailed technical specification outlining the operational needs and requirements for the outsourced service. | Internal Client |
4. Request for Proposal (RFP) | The procurement department refines the technical needs and submits a formal RFP, including a work package and delivery conditions, to potential suppliers. | Procurement Department, Internal Client, Suppliers |
5. Supplier Evaluation | Proposals are assessed through operational risk and financial analyses, considering trust, prior experiences, and supplier capabilities. | Procurement Department |
6. Final Interviews | Shortlisted suppliers are interviewed to finalize technical and compliance aspects of their proposals. | Procurement Department, Suppliers |
7. Internal Evaluation | Procurement and the internal client review and assess the proposals, with the internal client having more influence in the decision. | Procurement Department, Internal Client |
8. Contract Formalization | A partnership is formalized through contract signing, including technical specifications, KPIs, penalties, and terms of collaboration. | Procurement Department, Internal Client, Suppliers |
Control Mechanism | Type | Definition |
---|---|---|
Certifications | Formal | A process ensuring that suppliers meet essential quality standards and regulatory requirements, promoting fairness and compliance with ethical and legal norms in selection. |
Key Performance Indicators (KPIs) | Formal | Metrics established to evaluate supplier performance and effectiveness, reviewed annually, and used for ongoing assessment and potential adjustments in service delivery. |
Delivery Notes | Formal | Monthly documentation that facilitates performance monitoring and serves as a basis for invoicing, ensuring alignment with contractual obligations and service expectations. |
Quarterly Reviews | Formal | Regular evaluations to assess supplier performance and address potential issues with order fulfilment, allowing for timely adjustments to maintain quality standards. |
Permanence of Internal Workers | Informal | Internal employees are retained across different suppliers to ensure continuity of operational knowledge and adherence to company standards, thus mitigating risks during transitions. |
Past Performance Assessment | Informal | An evaluation of supplier capabilities compared to the risks associated with their ability to deliver on time, factoring in trust and previous performance. |
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© 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
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Torralba-Carnerero, G.; García-Nieto, M.; Ramón-Jerónimo, J.M.; Flórez-López, R. Supply Chain Management Control in the Aerospace Sector: An Empirical Approach. Logistics 2024, 8, 132. https://doi.org/10.3390/logistics8040132
Torralba-Carnerero G, García-Nieto M, Ramón-Jerónimo JM, Flórez-López R. Supply Chain Management Control in the Aerospace Sector: An Empirical Approach. Logistics. 2024; 8(4):132. https://doi.org/10.3390/logistics8040132
Chicago/Turabian StyleTorralba-Carnerero, Gonzalo, Manuel García-Nieto, Juan Manuel Ramón-Jerónimo, and Raquel Flórez-López. 2024. "Supply Chain Management Control in the Aerospace Sector: An Empirical Approach" Logistics 8, no. 4: 132. https://doi.org/10.3390/logistics8040132
APA StyleTorralba-Carnerero, G., García-Nieto, M., Ramón-Jerónimo, J. M., & Flórez-López, R. (2024). Supply Chain Management Control in the Aerospace Sector: An Empirical Approach. Logistics, 8(4), 132. https://doi.org/10.3390/logistics8040132