An analysis of long-term agreements with suppliers in Lockheed Martin's commercial satellite systems division
Name
497049598-MIT.pdf
Description
Full printable version
Size
33.8 MB
Format
Adobe PDF
Checksum (MD5)
7ce6d30aec5f46d3239a319d38bcac72
Author(s)
Singh, Hem
Advisor(s)
Edgar Blanco.
Date Issued
2009
Publisher
Massachusetts Institute of Technology
Abstract
Lockheed Martin designs and builds commercial satellites to customers' specifications. The customers, such as telecommunications companies and weather forecasters, are very price sensitive and, usually, award contracts to the lowest priced bids. Lockheed manufactures satellites using a combination of in-house manufacturing, purchasing, and subcontracting (for subcontract parts). The subcontract parts constitute a majority of a satellite's costs. Lockheed uses contracts and other supply management techniques to stay competitive and to keep satellite, specifically subcontract part, costs under control. Some of the subcontract part contracts are managed under subcontract agreements called long-term agreements (LTA). A small supplier pool, long turnover (for bringing these suppliers onboard), regulatory requirements, and capital-intensive nature of the industry are important considerations in evaluating these LTAs. The LTAs embody the risks inherent in project supply chains, specifically, price, currency, and supply risks. In such events, LTAs can become a liability and can lead to monetary losses or discord with suppliers. This thesis provides an overview of the satellite supply chain, analyzes supplier relations to better understand the business dynamics, and analyzes LTAs to better control the satellite input costs. Key words: commercial satellite, contractor, long-term agreement, subcontract, Lockheed, subcontractor, LTA, satellite supply chain, contracts.
Description
Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2009.
Includes bibliographical references (leaves 68-69).
Subjects
Engineering Systems Division.
MIT Department
Massachusetts Institute of Technology. Engineering Systems Division
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