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Dissertacao.Pdf The Eclipse 500 Very Light Jet Presidente: Prof. Fernando José Parracho Lau Orientador: Prof. Rui Miguel Loureiro Nobre Baptista Vogal: Prof. Carlos Manuel Pinho Lucas de Freitas ACKNOWLEDGEMENTS Firstly I would like to thank my supervisor Professor Rui Baptista, of IST, for the support, freedom and confidence he gave to me and all his hard work reading the draft version of my thesis and helping me making it final. His comments, literature, suggestions, enthusiasm and encouragements were very important for my work. I found it very valuable to be able to learn from his experience throughout my writing. To Professor Marc Reunis, of TUDelft, it is very difficult to express how grateful I am. Marc was the lecturer of Purchasing Management at TUDelft, where my work about the Eclipse 500 started. His enthusiasm made me believe in the potential of my idea to explore the supplier involvement this aircraft. After that, his commitment and careful reviewing of my work let me learn a lot about how to properly write a scientific paper. Furthermore, Marc was kind enough to help me on several occasions in the early, and perhaps most difficult, stages of this thesis (without any benefit or obligation to do so), when I had to define its structure and goals, even though he was in The Netherlands and I was in Portugal. I would also like to thank Mr. Rich Shepherd, from Eclipse Aviation, for answering and distributing my questionnaires to his colleagues thus making it possible to obtain the direct contribution of Eclipse Aviation supply chain management employees. This contribution was essential for the quality of the results of my research. To Professor Arménio Sá I thank for all the privileged information about the Eclipse 500 he gave to me that I would not have ever been able to gain access to otherwise and made my understanding of this airplane much deeper. To my extended family I would like to thank for the opportunity of studying and reaching the end of my Master’s. More specifically to my parents for paying for it, supporting and encouraging me along my academic life, and giving me the opportunity to study abroad; to my aunt Zé for the quiet and scientific feel of her office; to my grandparents for the advice and the opportunity to work in a peaceful, beautiful and calm place; to Nana for bearing my terrible morning moods; and to Mena and Carlos for making me keep my options open when I was so sure I did not want to do a Masters’ thesis. Finally I would like to thank my friends for balancing the long and hard days of writing with frequently even more tiring but much more fun and amusing experiences. To Victor, who besides welcoming me in his country, was the first person to ever speak to me about “this amazing little jet that is gathering much interest in the US”. To Claudia, Andrew and Luca (and the rest of the 3 rd floor group) I thank for five intense months of shared life, where I both enjoyed and learned a much more than I would ever have imagined possible. To Margarida, Filipa, Raquel and Joana for being the everlasting group, night after night, week after week, and for years now, with whom I share a large set of great moments and memories, and the certainty that many more are yet to come. i ii ABSTRACT The Eclipse 500 Very Light Jet (VLJ), developed by Eclipse Aviation, is a new type of personal jet that is expected to revolutionise the market. Its sale price and operating costs are historically low and a very low time to market and high number of advance orders were achieved; furthermore, it is an example of a radical innovation developed by a new venture. This thesis is organised as a case study of supplier involvement in the development of the Eclipse 500. It assesses hypotheses concerning supplier involvement and time to market, development cost savings, suppliers’ specific investments and qualification of supplier abilities. A research question about other effects of supplier involvement is also answered. Selected employees from Eclipse Aviation responded to two questionnaires; a number of relevant press releases from this manufacturer were also analysed through a framework of supplier involvement. It was concluded that a negative relationship exists between supplier involvement and time to market and that a positive one is present between supplier involvement and development cost savings. The qualification of supplier abilities and supplier specific investments have had a positive relationship with the extent of supplier involvement in this case. Eclipse Aviation was more involved with the suppliers chosen for the quality of their products and supplier involvement was important in reaching final product quality goals. Further research is possible by performing a multiple case study of Eclipse Aviation and its main competitors and see if the conclusions reached in this work still hold. Keywords: Supplier involvement; Radical innovation; New venture; Eclipse 500; Development cost savings; Time to market. iii iv RESUMO O Eclipse 500 Very Light Jet (VLJ), desenvolvido pela Eclipse Aviation, é um novo tipo de jacto particular que potencialmente revolucionará o mercado. O seu preço de venda e os seus custos de operação são historicamente baixos e foram atingidos tanto um baixo “time to market” como um grande número de encomendas adiantadas. Adicionalmente, é um exemplo de uma inovação radical desenvolvida por uma “new venture”. A presente tese construiu-se como um estudo de caso sobre o envolvimento de fornecedores no desenvolvimento do Eclipse 500. Foram testadas hipóteses sobre vários efeitos previstos do envolvimento de fornecedores no desenvolvimento deste produto. Empregados seleccionados da Eclipse Aviation responderam a dois questionários; press releases deste fabricante foram também analisados através de uma framework sobre envolvimento de fornecedores. Concluiu-se que existe uma relação negativa entre envolvimento de fornecedores e “time to market” e que existe uma relação positiva entre envolvimento de fornecedores e redução dos custos de desenvolvimento. A qualificação de capacidades dos fornecedores e seus investimentos específicos tiveram ambas uma relação positiva com o nível de envolvimento de fornecedores neste caso. A Eclipse Aviation esteve mais envolvida com os fornecedores escolhidos pela qualidade dos seus produtos e o envolvimento com os fornecedores foi importante para atingir as metas de qualidade para o produto final. Para investigação futura sugere-se um estudo de caso múltiplo da Eclipse Aviation com os seus principais competidores, averiguando se se mantêm válidas as conclusões obtidas neste trabalho. Palavras-chave: Envolvimento de fornecedores; Inovação radical; “New venture”; Eclipse 500; Reduções em custos de desenvolvimento; “Time to market”. v vi TABLE OF CONTENTS Chapter 1 - INTRODUCTION AND RELEVANCE .................................................................................. 1 1.1 INTRODUCTION ................................................................................................................. 1 1.2 RELEVANCE ....................................................................................................................... 2 1.3 RESEARCH PROBLEM ...................................................................................................... 3 1.4 THESIS OUTLINE ............................................................................................................... 3 Chapter 2 - THEORETICAL FRAMING .................................................................................................. 5 2.1 BACKGROUND ................................................................................................................... 5 2.1.1 Airlines and their Limitations ....................................................................................... 5 2.1.2 Current On-Demand Alternatives ................................................................................ 7 2.1.4 Supply Goods and Supplier Classification .................................................................. 9 2.2 RADICAL AND INCREMENTAL INNOVATION ................................................................ 11 2.2.1 Innovation Classification in the Literature ................................................................. 12 2.2.2 Descriptions of Radical and Incremental Innovation ................................................. 14 2.2.3 Radically and Incrementally Innovative Product Development and Corp. Strategy . 16 2.3 NEW VENTURES AND RADICAL INNOVATION ............................................................ 18 2.4 AN EXAMPLE OF RADICAL INNOVATION IN A NEW VENTURE: THE DEVELOPMENT OF THE ECLIPSE 500 ...................................................................................................................... 20 2.4.1 Eclipse Aviation and the Eclipse 500 Very Light Jet ................................................. 21 2.4.2 Classifying the Eclipse 500 as a radical innovation conducted by a new venture .... 23 2.5 EARLY SUPPLIER INVOLVEMENT: A FRAMEWORK ................................................... 26 2.6 SUPPLIER INVOLVEMENT IN A RADICAL INNOVATION BY A NEW VENTURE ........ 32 2.7 RESEARCH PROBLEM, QUESTIONS AND HYPOTHESES .......................................... 35 2.7.1 Research Hypotheses ............................................................................................... 35 2.7.1.1 – Supplier involvement and low time-to-market ............................................................. 36 2.7.1.2 – Supplier involvement and development
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