Forget about what you learned about Supply Chain Management in school. Here's how Honeywell Aero does it.
Supplier A has been making a widget for 3 years and has finally got the start-up bugs worked out. But HON says the widget costs too much so we want you to host a 3 day workshop to find ways to reduce cost. After the exercise the recommendation is to change the drawing to eliminate an unnecessary process step, which was proposed 3 years earlier when A started making the part. HON says, costs money, no can do.
So HON decides to look for another supplier and auctions the part off. Supplier B agrees to make the part for a little less cost than A. To maximize savings, HON immediately stops buying from A and places all production orders with B. B finds the same start-up issues as A did 3 years earlier, and gets behind in their orders.
Soon deliveries of the doo-hicky platform to BOEBUS is delayed because of the widget. HON tells BOEBUS it's the supplier's fault and will begin an intensive program involving HON quality engineers at the supplier site every day and preparation of charts for HON Management to review weekly. After 4 weeks the charts tell the same story (start up problems and drawing change would improve the process). HON tells BOEBUS it's the HON quality engineer's fault for not making any improvements, so he's been "elbowed". Also, HON is bringing in more Senior Directors to review the charts.
BOEBUS begins to fine HON for late deliveries and management becomes concerned about the bottom line. Secretly they plan to fire all the "elbowed" employees before the end of the year, avoiding the deferred 401K contributions to those individuals. Profit is positive once again, shareholders are happy, and Sr Managers get their bonus.
And that's how it's done at Honeywell Aero!