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 run for to regain their competitive advantage. Many companies are finding that it is instead an difficult to acquire unseasoned business. However, some companies have deep disc everywhereed a modernfound way to cut costs. This new way to cut costs is to work closely with providers, some other 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) * unified systems (military aircraft) * Ship systems (non-nu lightheaded military and commercial ships) * Newport News (nuclear military clear ships and submarines) * Mission systems (command and control systems, missile systems) * Space technology (military and neighborly space technology) This text will focus on the complicated 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 place is relatively fixed, it is quite difficult for the company to obtain new business. The companys efforts are more than than focused on decreasing real(a) cost. Secondly, suppl ier development can have a involved forcef! ulness 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 realize 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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