Case Notes/Answers
Bombardier Aviation The Front Substructure Decision
By David Wood
Discussion Questions:
1. What is the issue in this case, and why has this issue become so important to Pierron now?
2. What criteria should Pierron apply to evaluate each of the alternatives? Based on these criteria,
what is your evaluation of the various alternatives?
3. What risks does Pierron face with this decision? How might you mitigate these risks?
4. What decision would you make? Why?
, W20421
Teaching Note
BOMBARDIER AVIATION: THE FRONT SUBSTRUCTURE DECISION
SYNOPSIS
Julie Pierron, procurement director at Bombardier Aerostructures (Bombardier), was tasked with deciding
whether to support the manufacturing department’s proposal to expand capacity in order to produce the
front substructure for the A220 aircraft in house or to instead propose that Bombardier outsource the
production of this critical assembly. It was December 7, 2018, and demand had been growing steadily for
the A220. Engineers had determined that expanding the current production capacity at Bombardier’s
headquarters in Montreal, Canada, was the least capital-intensive solution. However, the front substructure
was a prime candidate for outsourcing, and Pierron wanted to be sure she had considered all options before
she made a final recommendation to the senior management team in two weeks.
LEARNING OBJECTIVES
This case explores the many facets of a classic “make versus buy” decision. In addition, the case examines
the relative risks of two suppliers, and explores supply risks under management pressure to turn a profit.
Students will need to look at capital costs versus variable costs; lead times and working capital; cash flow;
and qualitative factors such as responsiveness, quality, and risk. After working through the case and
assignment questions, students will be able to do the following:
Outline the financial implications of a “make versus buy” decision.
Describe the nature of supply risk, and explain how risk changes over time.
Develop an implementation plan that balances risk and reward for a “make versus buy” decision.
POSITION IN COURSE
The case can be used in undergraduate- and graduate-level courses on operations or supply chain
management. The case can also be used as an exam at the end of a module on supply chain management.
This Teaching Note is authorized for use only by ELENA PIKULINA, University of British Columbia until Feb 2023. Copying or posting is an infringement of copyright.
or 617.783.7860.
Bombardier Aviation The Front Substructure Decision
By David Wood
Discussion Questions:
1. What is the issue in this case, and why has this issue become so important to Pierron now?
2. What criteria should Pierron apply to evaluate each of the alternatives? Based on these criteria,
what is your evaluation of the various alternatives?
3. What risks does Pierron face with this decision? How might you mitigate these risks?
4. What decision would you make? Why?
, W20421
Teaching Note
BOMBARDIER AVIATION: THE FRONT SUBSTRUCTURE DECISION
SYNOPSIS
Julie Pierron, procurement director at Bombardier Aerostructures (Bombardier), was tasked with deciding
whether to support the manufacturing department’s proposal to expand capacity in order to produce the
front substructure for the A220 aircraft in house or to instead propose that Bombardier outsource the
production of this critical assembly. It was December 7, 2018, and demand had been growing steadily for
the A220. Engineers had determined that expanding the current production capacity at Bombardier’s
headquarters in Montreal, Canada, was the least capital-intensive solution. However, the front substructure
was a prime candidate for outsourcing, and Pierron wanted to be sure she had considered all options before
she made a final recommendation to the senior management team in two weeks.
LEARNING OBJECTIVES
This case explores the many facets of a classic “make versus buy” decision. In addition, the case examines
the relative risks of two suppliers, and explores supply risks under management pressure to turn a profit.
Students will need to look at capital costs versus variable costs; lead times and working capital; cash flow;
and qualitative factors such as responsiveness, quality, and risk. After working through the case and
assignment questions, students will be able to do the following:
Outline the financial implications of a “make versus buy” decision.
Describe the nature of supply risk, and explain how risk changes over time.
Develop an implementation plan that balances risk and reward for a “make versus buy” decision.
POSITION IN COURSE
The case can be used in undergraduate- and graduate-level courses on operations or supply chain
management. The case can also be used as an exam at the end of a module on supply chain management.
This Teaching Note is authorized for use only by ELENA PIKULINA, University of British Columbia until Feb 2023. Copying or posting is an infringement of copyright.
or 617.783.7860.
