The company Westland Helicopters Ltd (WHL) is a UK-based manufacturer company specialized on helicopters. Since WHL’s core competence lies in development and design, some of its manufacture and assembly production have been outsources to suppliers. In 1995, the newly appointed Director of Materials Martin Porter wanted to implement some drastic changes in the company’s supply chain and strategy. The company produces five different types of helicopters, however, this new strategy will first be exclusively applied to the latest model – the EH101, and if successful, be implemented further.
The first problem WHL needs to tackle is the evaluation and improvement of the current purchasing function. The main issue for WHL lies in the divided functional groups within the company who tends to work independently as well as use the approach ‘power of information’. WHL has clearly a functional structure which leads to lack of communication between these functional groups, e. g. in design, marketing, quality control etc. Even if the efficiency works well in these particular groups, its feel like an old fashion way of structure an organisation nowadays.
Martin Porter should implement an organisational structure that welcomes and improves the communication and information flow in the company. A good way to start this is to gather a manager and some team members from each functional group and have regular meetings. The aim is to create a larger understanding of a supply chain and how to make it as lean as possible while sharing information and knowledge. The different functional groups cannot exist parted from each other but instead simultaneously and work to the same direction.
Otherwise the efficiency and output from WHL will decline in the increasingly competitive market the company is working in. Part of the purchasing function is the problem with the current supplier. Since the new helicopter EH101 needs to be an success for the company, it is important for Porter to evaluate and restructure the current suppliers and the relationship between these. He needs to get rid of the old traditional relationships with the suppliers and create a partnership philosophy.
One of Porters problems with this is the suppliers’ habits of the old way. If the suppliers just want to maintain the old ways and dislike changes, new suppliers must be found with a thinking that will take WHL into the future. The second problem WHL faces is to pick the supplier for the CDG project. WHL has already written 1/3 of the specifications and thus needed a supplier to complete the 2/3 of the project together with them. This shows how important the supplier will be for the company where shared knowledge and working close together are to leading words.
Porter should focus on finding a supplier that can give him a short lead time, productivity, delivering quality products and have a similar company culture as WHL. The lead time is an important factor in choosing a supplier. WHL should choose a supplier within a close distance from their headquarter to reduce lead time and save costs, since its both expensive and time consuming to ship technological units from a far distance. Since WHL needs to have a close relationship with its supplier, the distance plays an even more important role. If it is situated in e. . Asia, a lack of communication will arise both because the different in time as well as the long journey. Productivity is also important since WHL compete in a rising competitive market and probably wants more market shares. This means that both WHL and its supplier have to work close together to maintain a certain standard and exchange opinions and improvements. Nowadays when information, knowledge and technology are flying freely around the more increasingly global world, a good collaboration is a must for a company to function well.