Contracting and economics alliances in the aerospace sector: do formal contact arrangements support or impede efficient supply chain relationships?

This paper examines relationships developed in the UK's defence branch of the aerospace supply chain. Comparisons are made between economic and formal contractual relationships. Major customers, in this paper we refer to the Ministry of Defence (MoD), have tended to developed complex and legalistic contacts with their suppliers and use the threat of enforcement when problems arise. The ensuing litigation has negative effects on all parties in the relationship. Reactions to the recent introduction of MoD Integrated Project Teams (IPTs) to co-ordinate and effectively manage the acquisition process will also be reviewed. The initial findings will be analysed in the context of relevant theories of the firm, contracting and supply chain management. Whilst the focus of this paper is on aerospace defence contracting many of the issues identified will be relevant to many other manufacturing sectors. (C) 2001 Elsevier Science Ltd. All rights reserved