airplane flying
Late last month, American Airlines announced what has been called the “largest aircraft order in aviation history.” Interestingly, it did not single source the order – it split the order of 460 aircraft between Airbus (260) and Boeing (200).

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There is debate as to exactly why it split this order when, traditionally, airlines purchase aircraft from single manufacturers in order to take advantage of various efficiencies, most notably those that result in the lowest purchase price per plane.

CBSNews.com says that “many industry analysts suspect the deal was motivated by the ongoing labor disputes at Boeing’s assembly plants.” In the video embedded below, one of those analysts said that Boeing has “had some challenges with labor and people have been wondering if they were going to get their production lines in order in time to really sort of get some of these newer aircraft out.”

According to the above-linked article, American Airlines insists that those labor issues were not a factor in the decision with their president quoted as saying “Our needs were just so great, and we wanted to do this in such a big way, that one company, one manufacturer couldn’t fulfill our needs in the timeframe.”

But it makes you wonder, doesn’t it?

Certainly a labor stoppage is a supply risk so common that it’s mentioned in our 19-Point Supply Risk Checklist. Plus, it’s a supply risk that is much more predictable than a natural disaster. So, it’s not a bad idea to dual source if the threat of a labor stoppage is more than insignificant.

Here’s the video.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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