Engineering the future with game-changing supplier contracts
In the domain of supply agreements, holding back renewal wields greater power than alternative incentives and penalties.
In 2007, Boeing's ambitious 787 Dreamliner faced an unexpected setback—its first scheduled test flight grounded, not by a complex engineering challenge, but by a shortage of bolts. This seemingly trivial hiccup illustrates a pervasive issue in high-tech manufacturing: the intricate dance between multi-million-dollar aircraft and components worth just a few dollars each. Eindhoven University of Technology in collaboration with UCLA, has unveiled a groundbreaking solution to this challenge.
profit boost
Led by Eindhoven's Mirjam S. Meijer, Willem van Jaarsveld, Ton de Kok, and UCLA Anderson’s Christopher S. Tang, the research dissects the vulnerabilities of high-tech supply chains. The proposed contingent renewal contract introduces a paradigm shift, tying supplier contract renewal to the successful fulfillment of existing commitments. This innovative approach not only addresses the shortcomings of conventional contracts but promises a 20% profit boost for manufacturers.
More information
- Read the article on TU/e’s website
- Read the article on UCLA's website