Bombardier-Opportunities for sustainable development

Essay by Amit MehraUniversity, Master'sA-, May 2004

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Thank you for giving me this chance to propose my ideas on how our company can explore future opportunities and gain competitive advantage using sustainability as a strategy.

I. Cost Savings

I will begin with addressing the financial health of the company. I feel that the cost cutting initiatives taken so far are seeds sown that will yield benefits in the future (savings of $600 million annually after 2005)

However Bombardier should focus on a limited number of suppliers in order to follow a centralized approach to negotiating contracts and buying materials and bargain a discounted bulk price.

While our rail sector might not be a leading one, when it comes to development of innovative 'green products', we could certainly look into the deployment of e.g. back-casting methodology and Six Sigma in the field of environment in order to achieve cost-effective products. Environmental aspects to be considered include material choices, energy use, land use and external noise amongst others.

The train division should concentrate more on servicing and maintenance rather than thinking of itself as a manufacturer of rail equipment, thereby assessing the risks inherent in all contracts rather than bidding to undercut competition at any cost. At the same time, we must stop bidding low on contracts. Today, when the company's financial health is of pristine importance, Bombardier can afford to follow the paradigm of 'Short term pain for long term gains'.

At the same time, we should benchmark against Boeing and concentrate on fuel efficiency, while focusing on transformative technologies that will be the economic engines of tomorrow .

Not to undermine the 'procurement integration program', launched to rationalize the number of suppliers the business utilizes, increase parts standardization, and centralize negotiation processes to achieve economies of scale wherever possible , we could shift operations to low cost...