Due to military budget cuts and other market forces, companies which have traditionally relied on government contracts for a large portion of their business are forced to cut budgets of their own.
One of the biggest of these companies, Boeing, relies on a global supply chain of suppliers and distributors for the aircraft it builds. Parts and labor come from all corners of the world, including Asia, the Americas, and Europe for planes like the new 787.
Changes to this kind of supply chain has the potential to save a huge amount of money. In Boeing’s case, they say they have been able to spend 66 percent of their costs from the supply chain alone. This has been accomplished by negotiating with suppliers, improving efficiency, and focusing on cost reduction.
This massive amount of savings highlights the need for good relationships with shippers and suppliers as well as organization and efficiency. To read more, see this article.