Strategic outsourcing and supplier integration in the helicopter sector

Abstract

Make-buy decisions, and their associated strategic sourcing activities, define the very identity of £inns, shape their competitive advantage, and determine their long-term survival and success. Conceptually, make-buy decisions reflect a firm's overarching strategic directions and are grounded in its clearly-articulated core competencies. This thesis critically examines two analytical frameworks in the literature that have been advanced to explain or guide make-buy decisions by firms. The case study focuses on a commercial helicopter development program that has prompted the case study firm to undertake a fundamental rethinking of its long-standing make-buy policies, sourcing strategies, and supplier integration practices. The objective of the study is not only to assess the applicability and generalizability of these analytical frameworks but also to gain new insights into the dynamics of make-buy decisions. The thesis also examines the firm's new sourcing strategy, linked to its make­buy decisions, resulting in long-term collaborative and partnering relationships with its significant subsystem suppliers, both domestically and internationally. The ex post case study analysis, concentrating on the nose section of the development helicopter, generally confirmed at a fairly high level the usefulness of applying these analytical frameworks to key make-buy decisions before such decisions are made. However, at a more detailed level of analysis, focusing on specific subsystem components and the pacing technologies underlying them, the analysis also raised sufficiently important issues on whether their outsourcing ("buy" decision) may have been consistent with maintaining the firm's core competencies and longer-term competitive advantage. The analysis also pointed out that higher-level strategic considerations may override make-buy and supply chain design strategies that may be suggested by a technical decomposition of the product system architecture.