Jack Aerospace Technologies $($JAT$)$ researches, designs, manufactures, delivers, and services numerous product part components to the world$$s largest aircraft companies. JAT produces approximately $120$ aircraft products using numerous processes and many employees. In recent years, JAT$$s profitability has suffered, which can be attributed to increased competition, customer dissatisfaction, and regulatory pressures. Noela, president of JAT, called a meeting to consider ways to improve profitability. She labeled the meeting a strategic planning session and invited the following officers: Katerina, environmental manager; Francisca, head of research and development; Misato, vice president of production and quality; Sakari, vice president of finance; and William, marketing vice president.

Noela:

$$You all have received the quarterly financial reports for the past two years. The trends are negative. We are losing market share, profits are decreasing, and our costs seem to be increasing. We need to take actions to increase sales, reduce costs, or both, and we need to do so as quickly as possible. Given our research strengths, it seems to me that our best bet is to grow revenues by introducing new products with proprietary rights. As far as costs are concerned, we need to improve our performance on that dimension as well. Lower per$-$unit costs for new and existing products are needed. Any suggestions?$$

Francisca:

$$For our products, our ability to control costs resides in development$$my area$$rather than manufacturing. We probably need to pay more attention to product and process design issues if we are to successfully lower costs. Revenues also are affected in this stage. Once we patent a new part or component, the clock begins to tick, and we need to reduce time to market. Significantly, reducing time to market will allow us to generate revenues for a longer period of time than we currently are experiencing. For example, reducing the cycle time spent to convert new ideas into working engineering and other processes would help to improve time to market and also to increase revenues. Finally, we can grow revenues by increasing the volume of new products.$$

Misato:

$$While there is a lot of merit to the observation that the majority of our cost reduction opportunities reside in product development, significant cost reduction opportunities also involve manufacturing as well. For example, we might be able to reduce our manufacturing cycle time of converting raw materials into finished product. Furthermore, as you know, the Federal Aviation Administration $($FAA$)$ and other delegated authorities play a critical role in our business, as they must approve all our aircraft products. After more than a decade in our research lab, we recently received regulatory approval for a number of new state$-$of$-$the$-$art flight$-$critical engine parts, such as the bearing housings in the turbofan engine of maritime patrol aircrafts that navies use for patrol and search$-$and$-$rescue missions. This new manufacturing technology uses additive manufacturing, which often is referred to as $3$D printing. Traditionally, many of these parts have been complicated to manufacture, which has made their replacement very costly for customer operators because of the low quantity of orders placed and the need for expensive molds for holding molten metal. However, with $3$D printing, we can print such parts more quickly, in smaller quantities, and without the need for expensive tools as components are manufactured using layers of powdered metal fused together with a laser. Finally, for some parts, our new $3$D manufacturing technology has drastically reduced our lead time from nearly two years to only two weeks.$$

Francisca:

$$Given that the FAA must approve all changes in our manufacturing process, we have been reluctant, historically, to engage in process improvement or reengineering. However, given our recent performance and regulatory success involving our new $3$D printing manufacturing technologies, I wonder if we shouldn$$t reconsider this long$-$standing policy. We might be able to build on this success by expanding considerably on this line of product offerings. Some of the quality problems we have experienced could be corrected by changing some of our existing processes, and the costs saved might exceed any cost incurred from seeking FAA approval. I think our quality costs likely are significant and represent an opportunity for improvement.$$

Sakari:

$$Recent groundings of specific aircraft types for which we supply parts also has hurt our earnings. As a result, from a risk perspective, I wonder if broadening our customer base so that our parts and components are used on a greater number of different aircrafts might help reduce our concentration risk and help to limit the drop in sales revenues that usually accompanies specific aircraft groundings.$$

Katerina:

$$I agree that cost reduction$$both in the product development stage and the manufacturing stage$$s