Fitting in with the Value Chain material is an article published last week in The Wall Street Journal about Boeing buying one of their main suppliers for the new Dreamliner plane.  I receive a weekly email with WSJ articles that relate to accounting along with some discussion questions and this article was included in the latest email.  Rather than rehash what is said here, I’ll include the email in its entirety including some provided discussion questions that are good things to think about.

Boeing Sets Deal to Buy a Dreamliner Plant
by Peter Sanders
Jul 02, 2009
Click here to view the full article on WSJ.com

TOPICS: Accounting Information Systems, Managerial Accounting, Supply Chains

SUMMARY: “Boeing Co. is in negotiations to purchase operations from one of its main suppliers as part of an effort to gain more control over the supply chain of its troubled 787 Dreamliner program….It will buy a facility from Vought Aircraft Industries that makes sections of the 787 fuselage….” Boeing had planned to have components of the Dreamliner manufactured by suppliers all over the world, but the company “…quickly discovered that keeping track of the different suppliers…was more difficult than it had anticipated….The plane is now two years behind schedule.”

CLASSROOM APPLICATION: The article is good for introducing the concept of a supply chain and supply chain management.

QUESTIONS:
1. (Introductory) Define the terms supply chain, supply chain management system, and value chain.

2. (Introductory) How did the Boeing Corporation initially plan to rely on its supply chain when initiating production of the 787 Dreamliner?

3. (Advanced) What specific supply chain issues did Boeing face with this production plan? How is a supply chain management system supposed to avoid these problems? Of the problems initially listed, which are unlikely to be avoided because of a good supply chain management system?

4. (Advanced) Do you think that Boeing’s acquisition of Vought Aircraft Industries converts the fuselage manufacturing activities from a supply chain to a value chain activity? Support your answer.

Reviewed By: Judy Beckman, University of Rhode Island