AN INNOVATIVE APPROACH TO SUPPLIER COST CONTROL

Productivity and affordability are prominent concepts in today’s management concerns. Under stable design conditions, productivity improvements through cost reduction efforts are used to improve affordability. Since over 50 percent of a modern helicopter's bill of material comes from outside suppliers, in-house cost reduction programs attack less than half the product costs. Sikorsky has developed an affirmative program of visits to suppliers by a specially selected team. These visits are aimed at identifying, quantifying, evaluating, and implementing supplier cost reductions. This program has resulted in a surprisingly large number of cost savings ideas which are implemented to improve product affordability. This paper explains the detail actions necessary for such an affirmative program and interprets the results.