Master of project management
BUSM-2083 Project Procurement and Ethics
Assignment 3: Analysis of Harvard Case Study
Number of words: 1800–2000 (excluding References, figures, tables and exhibits)
General Instructions:
Assignment 3-Individual case analysis
This assignment will assess your critical thinking skills and ability to understand and analyse different project scenarios. The
selected project is a Harvard case (Please refer to Boeing Australia Ltd Case in Coursepacks folder). You have to read the case
thoroughly and provide deep and accurate analysis. You may need to address the following questions in your report in details:
Q1: What are the limitations of BAL's cu
ent procurement processes?
Q2: How can you effectively manage customers, suppliers, and the internal organisation using e-procurement strategies?
Q3: What issues, in relation to procurement, need to be considered when trying to upgrade a company's technology platform?
Q4: Is the size of a company an important issue when considering an e-procurement strategy?
Please follow the Marking Criteria:
ASSESSMENT
CRITERIA:
High Distinction (80-
100%)
(excellent exploration
of main issues with
outstanding level of
independent thinking
and critical analysis)
Distinction (70-79%)
(comprehensive
exploration of main
issues with high level
of independent
thinking and critical
analysis)
Credit (60-69%)
(all the main issues are
addressed and some
good independent
thinking and analysis)
Pass (50-59%)
(majority of the main
issues addressed but
inadequate evidence
of independent
thinking and analysis)
Fail (0-49%)
(failure to adequately
address the main
issues and lack of
understanding of the
asic principles)
Case summary 10%
1.relevance to the case
2.key points identified
Critical analysis on the case 40%
1.Evaluation of depth of analysis
2.Identification of the enablers/challenges
3.Comparisons
4.Creative response
Discussion/ recommendation 30%
1.Justification, Description
2.Critical response
3.Supported proposition
Writing, synthesis & genre/field 20%
1.Assignment layout/ Structure
2.Grammar and Syntax
3.Cover page
4.Referencing
5.Technique
6.Argument construction
Boeing Australia Limited: ...
Peta Ashworth prepared this case under the supervision of Dr Ali Farhoomand for class discussion. This case is
not intended to show effective or ineffective handling of decision or business processes.
© 2003 by The Centre for Asian Business Cases, The University of Hong Kong. No part of this publication may be
eproduced or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or
otherwise (including the Internet) - without the permission of The University of Hong Kong.
Ref. 03/170C 1 August, 2003
1
ALI FARHOOMAND
Boeing Australia Limited:
Assessing the Merits of Implementing a
Sophisticated e-Procurement System
Formed in late 1996, Boeing Australia Limited (BAL) was a relatively new company and a
global extension of the US firm, The Boeing Company. BAL developed capabilities in the
areas of space and communications, site management, and the upgrade and maintenance of
military aircraft and equipment. As BAL grew, so did the legacy information system it used
for both internal communications and external dealings with customers. BAL, however,
faced difficult decisions as it sought to upgrade its procurement systems and processes to
improve operations. In early 1999, BAL recruited a new National Procurement Manager,
Russell Menere, whose immediate task was to look for gains in productivity by improving
procurement processes, either through cost savings or by reduced processing time. To meet
this objective, Russell initiated a number of short-term improvements. These included the
ationalisation of a large number of BAL’s suppliers; improving BAL’s relationships with its
key suppliers; the introduction of a credit-card purchasing system for low-value, large-volume
consumables, and the adoption of electronic ordering processes with BAL’s larger suppliers.
In 2002, with new opportunities available through e-business technology, Russell needed to
decide what BAL’s next step should be. Should BAL invest in a new system that would
simplify the procurement process across different divisions and support complex interfaces
with suppliers? Alternatively, should Russell recommend that BAL continue to sit on the
fence and seek short-term improvement tools for integration with its existing legacy systems?
Could BAL afford to wait, given that the main requirement of its major customer, the
Australian Defence Force (ADF), was timely information in support of military readiness and
the national security of Australia? Russell thought that one of the biggest challenges would
e to find an appropriate system that could provide mutual benefits to BAL and its suppliers
within budget constraints. To precisely define BAL’s requirements, Russell felt that it was
necessary to map the Company’s existing procurement system, and this was done through the
use of a Materials Management Process Council (MMPC).
HKU271
For the exclusive use of M. Qasim, 2018.
This document is authorized for use only by Mmuhnad Qasim in Procurement and Ethics taught by FARSHID RAHMANI, RMIT University from Jul 2018 to Jan 2019.
03/170C XXXXXXXXXXBoeing Australia Limited
2
Company Background
BAL’s history dated back to 1937, when an Australian group, Commonwealth Aircraft
Corporation, was licensed to build the NA-33 training aircraft for Northern American
Aviation Incorporated. Further contracts to manufacture warplanes led to the formation of the
government-owned Aerospace Technologies of Australia (ASTA), which in 1995 was sold
for A$40 million to the company, Rockwell Systems Australia.1
By 1995, Rockwell Systems Australia had developed capabilities in the areas of ship systems
and electronics, so aircraft production, modification and servicing became a good extension to
its business. BAL was officially formed on 6 December, 1996, when Boeing acquired
Rockwell’s aerospace and defence business, which included most of its Australian operations.
In 1998, BAL made a strategic move to relocate its head office from Sydney, New South
Wales, to Brisbane, Queensland. BAL occupied 10 floors within the Brisbane head office
where over 400 employees were engaged in central administration, finance, purchasing,
engineering, logistics, technical publishing, management information systems and project
management functions. These supported the four key divisions that made up the organisation
[see also Exhibit 1]:
1. The Military Aerospace Support Division provided engineering services in the areas of
design, development, integration and testing of upgrades/modifications to aircraft for the
Australian Defence Force (ADF) as well as engineering support to scientists and
esearchers of the Defence Science and Technology Organisation’s Aeronautical and
Maritime Research Li
ary.
2. The Commercial Aviation Services Division, in conjunction with Boeing Airplane
Services, a unit of Boeing USA, was developing Commercial Aviation Services to
provide integrated fleet management within the Australia, New Zealand, South Pacific
and Asia region and a Centre of Excellence Training Facility.
3. The Knowledge Systems Division provided innovative solutions for ground-based
command and control, communications, intelligence, surveillance and reconnaissance
capabilities for customers.
4. The Space and Communication Services Division sought new ways to provide
communications support services for customers, in designing advanced defence satellite
communications solutions and other research and design to develop information
management and decision-making tools to enhance the business of BAL’s commercial
customers.
Relocating the four divisions under one roof allowed BAL to achieve synergies through more
centralised and standardised operations, and also allowed employees to feel they were part of
a single, larger team. However, the four divisions were still autonomous in many ways. They
found and executed their own work, and reported the same measuring criteria in financial
dollars, project performance and product quality terms, as well as a range of other measures
equired by BAL’s balanced scorecard.2
In 2002, BAL had over 3,000 employees. In addition to their head office, BAL had
operations in 12 different locations around Australia. These locations were strategically
aligned with the locations of its major customer, the ADF.
1 US$1=A$1.70
2 See Kaplan and Norton XXXXXXXXXXfor more information on the “Balanced Scorecard” approach.
For the exclusive use of M. Qasim, 2018.
This document is authorized for use only by Mmuhnad Qasim in Procurement and Ethics taught by FARSHID RAHMANI, RMIT University from Jul 2018 to Jan 2019.
03/170C XXXXXXXXXXBoeing Australia Limited
3
Customers
Everybody still thinks of Boeing as Boeing aeroplanes. Here in Australia we
don’t have much to do with commercial aircraft. We are mainly site
management, military aircraft and space and communications.
- Russell Menere, National Procurement Manager
BAL’s major customer was the Australian Defence Force (ADF), which included the Royal
Australian Air Force (RAAF), the Royal Australian Navy (RAN) and the Australian Army.
The ADF employed approximately 51,500 full-time personnel. The government had
estimated that the ADF spent approximately A$12 billion dollars annually to meet its most
important objective, which was to ensure the defence and security of Australia. The services
equired by ADF of BAL varied according to the nature of the military service. Some
examples of on-going contracts included:
Management and maintenance of military sites on behalf of the ADF. For example, at
Amberley Air Force Base in Queensland, BAL provided most of the life-cycle support
activities including maintenance and upgrades on F-111 aircraft. BAL had a similar
a
angement with the ADF Helicopter School operating out of the RAAF Base, Fai
airn
in Canbe
a and other sites.
Modifications and upgrade projects such as the F/A-18A/B Weapon System Hornet
Upgrade Project at Williamtown, New South Wales. Here a fleet of 71 aircraft were being
upgraded