Wall Street Journal June 8th, 2016 by Ted Mann Subscription required
“United Technologies Chief Executive Gregory Hayes estimated that 44% of the company’s 1,600 suppliers—including the 500 to 600 who supply parts and materials for the engines themselves—weren’t meeting the company’s on-time delivery and quality control targets. “Forty-four percent is the challenge,” Mr. Hayes said.”
The article states that 80% of the parts for this engine which has taken over 10 years to develop at a cost of $10 billion are manufactured by outside suppliers. You can see why the CEO is concerned with OTD. Other interesting quotes from the article:
“We have all the capacity we need—the challenge is to get all the parts in on time,” said Danny DiPerna, Pratt’s senior vice president for operations and the chief official overseeing the company’s supply chain. “It’s a dogfight every day.”
Mr. DiPerna said.” He is the bearer of bad news to suppliers whose performance is below the company’s expectations, often via what he called “the painful call.”
Managing the risk of outsourced parts suppliers not delivering on time is as critical as the 10 year R+D effort to create this engine. Here’s hoping that UT figures this out before order cancellations increase.
Joe Lombardo, NGNF (nice guy no freight)