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Cycle time reduction in outsourcing process: case of an Indian aerospace industry

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Abstract

This paper reports a case study of an Indian aerospace industry, XYZ Aeronautics Limited, with an objective to bring reduction in cycle time of outsourcing process. The focus is to identify bottleneck areas and investigate into the improvement opportunities. The paper enriches the present body of knowledge by contributing a methodology and its application for a real-life case study to understand the implications of outsourcing on operational planning. The analysis reported in this research is based on the available knowledge and extensive experience gained while working in the outsourcing department of the case organization for a long period of time. The research integrates action research, longitudinal case study research, and simulation for the detailed and scientific analysis of the problem for a case organization. The study employs a six-step analysis approach for investigating the outsourcing-related issues in case organization. The simulation study has helped to reduce the average cycle time of purchase order placement to 69 days, i.e., improvement by 33.65% over the present 104 days. This would enable the case organization to conduct “what-if” analysis and evaluate the implications of bringing improvements in select bottleneck areas for reducing cycle time of outsourcing process. The investigation is expected to help managers to negotiate on appropriate dimensions with vendors and convince them for the adoption of e-sourcing, e-contract, and e-catalog technologies.

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Abbreviations

AMD:

Aircraft Manufacturing Division

AOD:

Aircraft Overhaul Division

ARS:

Automatic replenishment stock

AOG:

Aircraft on ground

CAGR:

Compound annual growth rate

CPO:

Chief of production overhaul

CST:

Comparison of statement

CT:

Cycle time

RMS:

Repair maintenance and service order

L/RMSO:

Local/readymade store order

MSR:

Material sub-contract requirement

MSRR:

Material sub-contract requirement request

PSC:

Part structure correction

SMH:

Standard man hour

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Correspondence to Shashank J. Thanki.

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Appendix

Appendix

Fig. 9
figure9

A detailed flow chart of existing purchase order system

Fig. 10
figure10

ARENA simulation model for PO

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Jha, K.K., Thakkar, J.J. & Thanki, S.J. Cycle time reduction in outsourcing process: case of an Indian aerospace industry. Int J Adv Manuf Technol (2020) doi:10.1007/s00170-019-04909-2

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Keywords

  • Outsourcing
  • Purchase order
  • Simulation
  • Cycle time
  • Action research