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    Aerospace Industry: - Corporate Social Responsibility and CSR Initiative - Group 7

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    Ajay
    The document discusses the major reservations and cons of outsourcing for Boeing's Wichita factory. Some key disadvantages mentioned include loss of control over business processes, increased coordination costs, quality and safety issues due to partner negligence, confidentiality and security risks from sharing sensitive data, and unexpected cost increases from delays, penalties and redesigns. Blindly imitating Toyota's supply chain model without the close supplier relationships is also critiqued. High labor costs and poor labor relations are listed as additional concerns with outsourcing.

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    Aerospace Industry: - Corporate Social Responsibility and CSR Initiative - Group 7

    Uploaded by

    Ajay
    32 views6 pages
    The document discusses the major reservations and cons of outsourcing for Boeing's Wichita factory. Some key disadvantages mentioned include loss of control over business processes, increased coordination costs, quality and safety issues due to partner negligence, confidentiality and security risks from sharing sensitive data, and unexpected cost increases from delays, penalties and redesigns. Blindly imitating Toyota's supply chain model without the close supplier relationships is also critiqued. High labor costs and poor labor relations are listed as additional concerns with outsourcing.

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    Wichita Outsourcing

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    The document discusses the major reservations and cons of outsourcing for Boeing's Wichita factory. Some key disadvantages mentioned include loss of control over business processes, increased coordination costs, quality and safety issues due to partner negligence, confidentiality and security risks from sharing sensitive data, and unexpected cost increases from delays, penalties and redesigns. Blindly imitating Toyota's supply chain model without the close supplier relationships is also critiqued. High labor costs and poor labor relations are listed as additional concerns with outsourcing.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    32 views6 pages

    Aerospace Industry: - Corporate Social Responsibility and CSR Initiative - Group 7

    Uploaded by

    Ajay
    The document discusses the major reservations and cons of outsourcing for Boeing's Wichita factory. Some key disadvantages mentioned include loss of control over business processes, increased coordination costs, quality and safety issues due to partner negligence, confidentiality and security risks from sharing sensitive data, and unexpected cost increases from delays, penalties and redesigns. Blindly imitating Toyota's supply chain model without the close supplier relationships is also critiqued. High labor costs and poor labor relations are listed as additional concerns with outsourcing.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    Aerospace

    Industry
    •Corporate Social
    Responsibility and
    CSR Initiative

    •GROUP 7
    Major Reservations & Cons of Outsourcing
    The Wichita Factory
    • New owner is expected to more effectively squeeze out labour and other costs and bring the work from other
    manufacturers also.
    • New owner can Outsourcing requires precise and more complete specifications because disputes arising from
    omissions or changes would be subject to legal remedies.
    • High Overheads on support functions :- Outsourcing expected to create new internal tasks that had not previously
    existed. Normal accounting practices do no allow these unavoidable additional cost to be billed against that
    particular item of work and hence it eventually gets misrepresented. Extra cost for overseeing supplier’s work
    cannot be accounted properly.
    • Loss of confidentiality and security-Boeing had to abandon some degree of privacy over its core business secrets,
    when outsourcing. Additionally, it had to pass on information such as critical details about business processes and
    safety measures, even if partners were thoroughly tested for their internal security processes. There is always a risk
    of data getting stolen or fraud being committed.
    • Co-ordination and communication issues- Since different parts are manufactured in different locations, the supply
    chain is stretched too long. Time difference, language barriers, other communication difficulties may disturb the
    schedule.
    • Unexpected cost increase- These were mainly due to increased co-ordination and labour cost, penalties due to
    delayed deliveries, additional redesigned cost. bring the work from other manufacturers also.
    Major Reservations & Cons of Outsourcing
    The Wichita Factory
    • Safety & Quality due to outsource partners negligence brought
    huge negative impacts to Boeing.
    • Loss of complete control over business- Once a business part is
    outsourced to a 3rd party, the company is no longer in full control of
    that aspect.
    • Blind imitation of Toyota’s three tier supply chain- Toyota worked
    closely with its suppliers and responded to their concerns with
    integrity, with high attention to product quality. In contrast Boeing
    adopted Toyota’s system in superficial way, imitating it blindly.
    Major Reservations & Cons of Outsourcing
    The Wichita Factory
    • High Labour Costs
    • New owner is expected to more effectively squeeze out labour and other costs and bring the work from other manufacturers
    also.
    • Poor Labour Relations
    • New owner can Outsourcing requires precise and more complete specifications because disputes arising from omissions or
    changes would be subject to legal remedies.
    • Outsourcing expected to create new internal tasks that had not previously existed. Normal accounting practices do no allow
    these unavoidable additional cost to be billed against that particular item of work and hence it eventually gets misrepresented.
    • Extra cost for overseeing supplier’s work cannot be accounted properly.
    • Loss of confidentiality and security-Boeing had to abandon some degree of privacy over its core business secrets, when
    outsourcing. Additionally, it had to pass on information such as critical details about business processes and safety measures,
    even if partners were thoroughly tested for their internal security processes. There is always a risk of data getting stolen or fraud
    being committed.
    • Co-ordination and communication issues- Since different parts are manufactured in different locations, the supply chain is
    stretched too long. Time difference, language barriers, other communication difficulties may disturb the schedule.
    • Unexpected cost increase- These were mainly due to increased co-ordination and labour cost, penalties due to delayed
    deliveries, additional redesigned cost. bring the work from other manufacturers also.
    Name Roll no.

    Chandury Satya Madhavi EPGP-12A-031

    Ipshita Biswas EPGP-12A-041

    Abhishek Chowbey EPGP-12A-002

    Barathy Paramasivan EPGP-12A-133

    Thank you Saravanan Subramanian

    Sneha Mohan
    EPGP-12A-098

    EPGP-12A-107

    Vallabh Shrikant Chavan EPGP-12A-122

    Vamsi Sagar Naidu EPGP-12A-123

    Vipin Range EPGP-12A-128

    Kulbhushan Kanadka Sachidananda EPGP-12A-050

    Nitin M Ghag EPGP-12A-068

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