Operating Business Successfully in the 21st Century: Supplier Development of Northrop Grumman

With the world growing smaller by the day, or as Thomas Friedman says getting flatter, many U. S. companies be give-up the ghost to regain their competitive advantage. Many companies are finding that it is sooner an difficult to acquire unseasoned business. However, some companies have lento disc overed a radical way to cut costs. This clean way to cut costs is to work closely with providers, early(a) than known in the business world as provider development. Northrop Grumman Corporation (a.k.a. Northrop) is one of the largest defense contractors in the world headquartered in Los Angeles, California. The organization operates in seven different business sectors: * electronic systems (radar, navigation, and communication systems) * Information technology (computer systems, training and simulation software) * merged systems (military aircraft) * Ship systems (non-nu benefit military and commercial ships) * Newport News (nuclear military clear ships and submarines) * Mis sion systems (command and control systems, missile systems) * Space technology (military and amicable space technology) This text will focus on the mixed systems business sector of Northrop. Supplier development is important for a fewer reasons. First, and probably most importantly, clobber cost is over one-half of total product cost ($0.55 of every $1 in revenue is spent on existent).

Since Northrops customer free radical is relatively fixed, it is quite difficult for the company to obtain new business. The companys efforts are more than than focused on decreasing visible cost. Secondly, supplier dev elopment can have a intricate forcefulness! on gross kale. The relationship between in addition in sales versus a decrease in material cost is 5:1. This means that a $5 outgrowth in sales has the same effect on profit as a $1 decrease in material and supply chain costs. Next, international competition is forcing companies to upgrade more products with less people. This means that companies are purchasing more and adding... If you involve to get a full essay, order it on our website: OrderCustomPaper.com

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