Read the case and answer the questions below: Its only fitting that we should start by looking at The Boeing Co., as the aerospace giants 787 Dreamliner project is not only a game changer when it comes to pushing the boundaries of whats possible with a fully connected supply chain, but its also an example of what can go wrong when a companys supply chain reach exceeds its grasp. Boeings goal with the Dreamliner was to involve key partners in every step along the supply chain. Namely, Boeing the airplane maker would become Boeing the airplane assembler, outsourcing the entire production of its new aircraft to suppliers and then finishing the plane at the final assembly stage. This doesnt sound radically different from what the major automakers do, locating Tier 1 suppliers in close proximity to the assembly plants. However, while an automobile might be built with as many as 8,000 to 10,000 parts, an airplane might have 3 million parts or more. In addition, while in the past Boeing had used outside suppliers to build roughly 50 percent of its planes, its plan for the Dreamliner was to outsource 70 percent of its fabrication, with much of the major components coming from outside the United States. Engines, for instance, would come from both Ohio and the United Kingdom; wingtips from Korea; trailing edges from Australia and Japan; center fuselages from Italy; cargo access doors from Sweden; and passenger entry doors from France. In fact, Boeing went so far as to develop a cargo planethe Dreamlifterto transport the larger parts, such as wings and fuselage, to the final assembly plant in Everett, Washington. The reason for outsourcing so much of the production work is the realization that the best process skills in aerospace oftentimes lie outside Boeings factories. The new plane would involve not only a new supply chain plan but also the development of lightweight composite materials and fuel-efficient engines, new production processes, and an interior architecture that would set new standards for passenger comfort. With a target delivery date of May 2008, the Dreamliner became the fastest-selling commercial aircraft in history, with more than 700 orders from 50 airlines by late 2007. Then cold reality set in: Due to numerous setbacks and supply chain problems, Boeing was not able to deliver any Dreamliners by 2008. Nor, as it turned out, was it able to fill any orders in 2009, either. As of summer 2009, Boeing was hopeful that the first order would be delivered by the fourth quarter of 2010. It has simply proved to be more difficult than we anticipated to complete the structural work on the airplane out of sequence in our Everett factory, admits Boeings executive vice president of commercial airplanes. The scale and scope of the task was enormous when considering the total number of parts, amount of innovation, number of subcontracting tiers, and geographical dispersion of the contractors. No company ever managed such a project before. Since nearly three-quarters of the work was being done by suppliers, naturally most of the production problems were on the supplier end as well, and as Boeing quickly discovered, a game-changing initiative like the Dreamliner requires extreme supply chain management. In response, Boeing has instituted a more intense supplier support and monitoring system to address breakdowns in the supply chain. The key [for Boeing] is to manage what counts and find ways to extend resources through the use of suppliers. This is easier said than done since many Tier 2 and Tier 3 suppliers have commitment to the Tier 1 supplier, not the company that is buying the chains combined output. Why? Because the relationship is typically tier to tier, not across multiple tiers. Stated Boeings VP. In 2009, the aerospace giant acquired one of its key suppliers, Vought Aircraft Industries, increasing Boeings involvement in the production stages by transforming one of its outsourcers into an in-house provider. Sometimes, then, even an old-fashioned best practice like buying out a supplier trumps a game changing strategy. Questions: 1. The supply chain consists of 4 cycles: procurement, manufacturing, replenishment and customer order cycles. Which of these 4 cycles had the most problems in Boeings supply chain? 2. From your perspective which manufacturing environment is applied in Boeings supply chain: ETO, MTO, ATO or MTS? Justify. 3. Which supply chain strategy does Boeing implement? Lean or Agile? Justify your answer. 4. How can the concept of Modularization be applied in Boeings manufacturing process? 5. Which 2 values do Boeing provide to customers through its products? Cost, quality, flexibility, innovation or delivery? Justify. 6. Using Excel, create a level S&OP plan using the following data, and indicate: a. The total forecasted sale for the year b. The number of workers required each month for the level production c. The quantity of production required each month for the level production d. The total number of employees hired and fired throughout the year e. The total cost of production f. The total cost of hiring g. The total cost of layoff h. The total cost of inventory i. The total cost of the production plan Month Forecast March 1,592 April 1,400 May 1,200 June 1,000 July 1,504 August 1,992 September 2,504 October 2,504 November 3,000 December 3,000 January 2,504 February 1,992 Planning values Starting inventory: 1000 Starting and ending workforce: 227 Hours worked per month per worker: 160 Hours per unit: 20 Hiring cost per worker: $3,000 Layoff cost per worker: $2,000 Monthly per-unit holding cost: $6 Production cost per unit: $1500 7. GreenCo packing company, one of Boeings suppliers, has a packing machine, with a special valve that is normally replaced every 3 weeks when the machine is idle. As a result, they use 16 valves per year. They estimated that the cost of a failed valve is $1000. The purchase price and quality for 3 suppliers are as follows: Supplier A Supplier B Supplier C Price per valve $40 $50 $65 % Good 96% 97.5% 98.8% a. Calculate the total cost to purchase valves for each supplier. b. Which supplier should be selected? 8. Your company which produces recyclable tableware has just received a one-year contract with a chain of a popular coffee store to provide 2400 of tableware sets. The contract specifies the exact number of sets to be shipped to them each month of the 12-month contract as shown in the following table. Month Forecast 1 150 2 100 3 50 4 250 5 200 6 300 7 350 8 300 9 250 10 100 11 150 12 200 Total 2400 Production data: Production set up cost $350/run Holding cost $2/item/month Required: 1. Design a production plan using the one time run method and find the following: a. Total inventory on hand b. Total holding cost c. Total set up cost d. Total cost of the plan 2. Design a production plan using Lot for Lot and find the following: a. Total inventory on hand b. Total holding cost c. Total set up cost d. Total cost of the plan 9. Carrefour hypermarket in Sahel is considering outsourcing the maintenance of its store and facilities to an outside company for EGP 750,000 per year. The 2022 budget was as follows: Direct expense (per worker) 6 workers total Wages EGP 3,500 per worker per month Benefits 5% of wages per worker per month Maintenance, repair & operating supplies EGP 4,000 per worker per month Indirect expense 1 supervisor Supervisory salary EGP 4,500 per month Benefits 9% of wage Other office expenses EGP 1500 per month a. Calculate the total cost of insourcing. b. What will be Carrefours decision?