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Supplier Management Improvement in Aviation Industry: a Case Study of Beriev Aircraft Company Elena L

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Supplier Management Improvement in Aviation Industry: a Case Study of Beriev Aircraft Company Elena L 41 Int. J Sup. Chain. Mgt Vol. 6, No. 1, March 2017 Supplier Management Improvement in Aviation Industry: A Case Study of Beriev Aircraft Company Elena L. Makarova 1, Pavel V. Pavlov 2 1 Associate Professor, Management and Innovative Technologies Department, Institute of Management in Economical, Ecological and Social Systems, Southern Federal University Chehov str., 22, Taganrog, 347928, Russian Federation [email protected] 2 Director of Institute of Management in Economical, Ecological and Social Systems, Southern Federal University Chehov str., 22, Taganrog, 347928, Russian Federation [email protected] Abstract —The purpose of this research is to study comparison with foreign competitors. Availability and analyze domestic and international experience in of own raw material base reduces the reproduction supply chain management of the aviation industry to process dependence of the international exchange enhance the competitiveness of aircraft factory and becomes the main factor and development products. In our paper, we designated specific prospective of Russian foreign economic relations. production of civil aircraft issues, which have, from However, the conditions of competitive advantages the authors’ view point, the major influence on the development in the past twenty years have industry product competitiveness for the aircraft undertaken significant changes, and therefore factory. A case study applied at the aircraft factory to eliminate the industry dependence on the propose a method of selecting suppliers for improving production factors existence in the country. Therefore, prerequisites for strengthening the the quality and competitiveness of the industry country's position in the global economic relations product. Based on undertaken analysis, the authors system are economic restructuring and designated specific areas of strategy implementation technological base upgrade, improving the for the supply chain management when entering new efficiency and competitiveness of production, markets with products of aircraft factory. According export structure diversification. to current situation at aviation industry, strategic Currently, in Russia only 4-5% of domestic scenario of quality management improvement with enterprises are engaged in introduction of the priority of supply chain management processes is innovations, while in the countries such as proposed after aircrafts’ mass production launch at Germany, USA, France and Japan, their share is aircraft factory. from 70 to 82%. Innovative business focus should Keywords —Supply Chain Management (SCM), Quality be fundamental in the work of Russian production Improvement , Aviation Industry, Aircraft Factory, Case majority. This industrial policy based on innovations can lead to the development of Study, Supplier Selection. technological advances and a breakthrough of the domestic economy. Evidence of no alternative 1. Introduction innovative renovation strategy for industrial production requires more attention to the The speed and multi-vector of world development, investment process and the innovation component. increasing the realization risk of large long-term Domestic production prospects for high-tech projects in all areas of socio-economic products will largely depend on the success of the development creates a high demand for the study of state science and technology policy that ensures the functioning problems of domestic enterprises in the continuous growth of investment in fundamental international labor sharing. Market stability of and applied research and development in priority Russian producers in the international labor sharing areas. The largest segment of the knowledge- in the world product markets today is based on the intensive high-tech industry, able to compete with price advantage. Cheap high-qualified labor the developed countries of export products on the determines lower prices for similar products in world market, is focused on the external supply of ___________________________ _________________________ __________ the Russian aviation industry. International Journal of Supply Chain Management Modern socio-political and macroeconomic IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print) situation in Russia is unfavorable for active work in Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/) the field of real investment. We point out the main 42 Int. J Sup. Chain. Mgt Vol. 6, No. 1, March 2017 aspects of the current situation, with the greatest The purpose of this research paper is to study and force affecting the investment activity in general analyze domestic and international experience in and impeding the investment projects supply chain management of the aviation industry implementation in particular: to enhance the competitiveness of aircraft factory − the general instability and unpredictability of products. In addition, we seek to answer the developments in all spheres of country economic following questions: What is the forecast of global activity; market of aviation products and services? What are − the specifics of the market financial resources, the peculiarities of the Russian market and aviation characterized by negative real value of money- industry in the context of modern logistics capital; technologies introduction? How should aviation − the imperfection of the current legislation, which industry implement domestic and international does not allow to fully take into account the experience in supply chain management modeling? negative impact of high inflation; Are there successful examples of supply chain − budget cuts caused by the global financial crisis. management implementation in Russian aviation All of these problems are directly related to industry? What should be done for further domestic aviation industry. improvement of the aviation industry on global In modern practice the problems of aircraft level? production take on a new character in an ever- By answering these questions, the contribution of changing geopolitical situation in the world. In the our paper is threefold. - A case study applied at the light of economy globalization and aircraft factory to propose a method of selecting internationalization the problem of increasing suppliers for improving the quality and domestic aircraft production competitiveness competitiveness of the industry product. Based on comes to the fore. Quality improvement is a multi- undertaken analysis, the authors designated specific edged economic category, which can be considered areas of strategy implementation for the supply at the level of the products, their producers and chain management when entering new markets industries and at the international level as a whole. with innovative products of aircraft factory. However, all these levels are closely interrelated, According to current situation at aviation industry, since it is quality improvement of individual strategic scenario of quality management aircraft factory suppliers and their products will improvement with the priority of supply chain eventually determine quality improvement of management processes is proposed after aircrafts’ aircraft industry of the country. mass production launch at aircraft factory. Uploaded with orders aircraft factories are highly The rest of the paper is organized as follows: profitable, their budgetary efficiency is also high, Section 2 provides a brief analytical review of because of tax revenues the whole regions where global aviation market and retrospective analysis of aircraft factory is mono-industry can live. The Russian aviation industry development. Section 3 largest share of innovative product exports is discusses the methodology of supply chain owned by such industries. Applied science- management used in this study; it also researches intensive technologies create a large number of supply chain management model in aviation jobs, not only at their enterprises, but also in related industry. Subsequently, Section 4 discusses the industries. Export potential of the aviation industry case study applied at the aircraft factory. Finally, can be effectively used for balancing of formed in Section 5 concludes with the overall purpose of the recent years irrational export structure, also to paper and directions for future research activities. eliminate dependence of Russia on the global economic market situation. 2. Market Review From the point of view of innovation and technological development base of the Russian economy the importance of the aviation industry 2.1. Global aviation market overview cannot be overstated due to large scope and range of its scientific, technical and technological Currently, the global aviation industry has achievements and interests. The aviation industry is experienced a number of radical changes, and the one of the most promising trends for development goal of which is an impact on the further of the national high-tech production. It requires development of air transport has yet to be realized. special attention, as the potential is the source of a The underlying mechanisms of industry qualitatively new economic growth of countries in functioning have changed. Development concept, general and Russia in particular. In our research, production, sales and after-sales service of aircraft we designated specific production of civil aircraft technology have significantly changed. issues, which have, from the authors’ view point, The civil aviation industry always responds not the major influence on the industry product only to the challenges
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