Looks like times have changed! 27 years ago, when I was a Supply/Commodity manager at Pratt & Whitney and a lead aerospace team member for the new UTC Purchasing Initiative, I/we faced immense pressure from the P&W and UTC VPs of purchasing to move small machined parts manufacturing to new suppliers domestically (far away) and overseas which would dismantle the supply network (“economic cluster,” in late-1990s terminology).
I strongly resisted that pressure because the Connecticut River Valley contained a highly developed network of ~100 first-, second-, and third-tier suppliers (only 3 first-tier suppliers out of 60 were not located in Connecticut). This supply network had been in existence for some 50+ years and was a treasure of know-how, quality, and responsiveness. I know because I personally visited most of them, some of them many times. The relationships we had with them were outstanding.
The commodity, called “Small Machined Parts (<30 cm characteristic dimension), was never produced internally. It was always outsourced locally. SMP consisted of tens of thousands of part numbers for all engine models, front to back, inside and out, commercial and military, from JT3s, J52s, and JT8Ds to the then-present engine models PW2000, PW4000, and F119, spaning some 40 years.
The P&W and UTC VPs of purchasing did not like or respect the data that I presented to support my argument for not changing suppliers. They wanted price savings quickly and were insensitive to the quality and delivery performance of new suppliers given the peculiarities of most parts.
I, as well as some of my colleagues, had the objective to help our local suppliers reduce the price gap, reduce their costs, and improve quality and delivery performance by teaching them Lean principles and practices. After I left P&W I wrote two papers describing that experience, and they were published in a top supply chain management journal. You can read the papers, published in 1999 and 2000, here and here.
It is nice to see the top leader showing some respect for its hard-working and loyal local suppliers. The network truly is a treasure.