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Supply Chain Management: Gulfstream Really Flies - Essay Example

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Summary
The case study on Gulfstream's management of its supply chain illustrates a company that has planned and processed efficiency into its core operations. The airplane manufacturer is known for a high-quality, even luxurious, product and the streamlined way in which it handles its supply system supports dependability as well as profitability…
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Supply Chain Management: Gulfstream Really Flies

Download file to see previous pages... From the beginning of the component manufacturing process all the way through FAA-mandated maintenance after the sale, Gulfstream's unique and effective methodology for supplying the needs of both the company and its customers is streamlined and secure. In terms of all the ways that the company uses location to support its supply chain efficiency, four key aspects can be noted.
While somewhat non-traditional in terms of location, the first thing that Gulfstream does is locate itself within the design processes of its suppliers. Considering the extreme sensitivity to safety for its final product, and the potential liability issues that would arise from a manufacturer's defect, it makes perfect sense for Gulfstream to work hand-in-glove with it suppliers on product development. It is brilliant to include them in a revenue sharing agreement on large components; this ensures their enthusiastic cooperation throughout the entire process. In the case study, for example, one of the major components supplied is the entire wing assembly. Obviously, this is not the type of component that an airplane manufacturer typically out-sources, but Gulfstream has so much confidence in its ability to control the design and manufacturing process that uses this unconventional method to its advantage.
A second innovative location effectiveness point is during the actual manufacturing. Gulfstream supplies on-site engineering support by placing one of its own employees at the manufacturer's facility to ensure that the design and quality of construction meet Gulfstream's exacting standards. Strategic location goes far beyond a physical address; in Gulfstream's case, locating key personnel to monitor and contribute to the manufacturing process is a use of location that is innovative and effective.
That said, the location of facilities is important in supply chain management efficiency. In this regard, Gulfstream has chosen a central location for its primary assembly plant that serves its component needs very well. Located in Savannah, Georgia, any parts that can be shipped by air come into the massive Atlanta Hartsfield Airport and are trucked to the assembly facility. Since many components, like the large engines for the planes, are heavy and imported from Europe, the use of ship transport is necessary. Savannah, located in proximity to the Atlantic Ocean, has a deep water port that permits direct shipment and short portage to the assembly plant. Finally, those parts made in the Southwestern United States are shipped in by rail. Taken together, the central location of Gulfstream permits it to save money and time on all aspects of its supply process.
Finally, as discussed below, the use of international suppliers with manufacturing capability and distribution centers puts a global network at the disposal of Gulfstream's affluent customers and obviates any need for them to bring their planes in to Georgia for routine maintenance. That required function can be performed at many different locations over the world.
Is sending a car to follow and track the status of a train shipment excessive What do you think the business case for Gulfstream's approach to managing its supply ...Download file to see next pagesRead More
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