Since 2010, Supply Chan Matters has provided specific commentaries related to the global supply chain challenges of Canada based Bombardier. This week features another milestone, an announcement that Bombardier has hired a new Chief Procurement Officer with the challenge of centralizing all supply chain strategy among its commercial aerospace and surface transportation units while significantly reducing costs.
Our first commentary in 2010 reflected on the new C-Series commercial aircraft program, and how this diversified transportation equipment provider had joined the supply chain outsourcing perils of the commercial aerospace industry. A lot has transpired over these five years and the C-Series program continues to struggle. The cash drain of elongated delays of this program has affected the company financially and earlier this year, led to a number of senior executive changes including a new CEO. In May, the company announced a partial IPO involving its rail transportation business.
The appointment of Nico Buchholz as CPO is unique, in that in his former role as Vice President, Corporate Fleet and Executive Vice President of Fleet Management for Lufthansa AG, he led efforts for acquisition of new aircraft. This included the influencing of the design of the new C-Series, since Lufthansa remains the designated launch airline for the program. Mr. Buchholz is also reported as having an extensive aerospace industry background. In his new role, the CPO will report directly to recently recruited Bombardier President and CEO, Alain Bellemare.
In the announcement, CEO Bellemare indicates that strategic sourcing is key to achieving best-in-class performance and that the new CPO will develop a company-wide approach, structure and clear action plans to make that happen. In its reporting, The Wall Street Journal added that the appointment of Mr. Buchholz places the veteran aerospace executive in a key role for initiating broad cost cutting initiatives.
Centralization of supply chain strategy and sourcing is often a pre-cursor to needed cost reductions, and in the case of Bombardier, it will include four business segments with complex relationships with various global-based suppliers.
Thus begins another chapter of change involving Bombardier’s supply chain, this time with a centralized strategy and approach.
Supply Chain Matters extends congratulations and best wishes to Mr. Buchholz and his extended supply chain team on this new chapter.