Head quartered in Everett Washington, Boeing business unit has manufacturing of five commercial airplanes, VIP-Derivative airplanes, Fabrication and assembly facilities and global support. (Boeing,2014) Boeing built its first airplane in 1916, the company earned $68. 3 billion in revenue in 2009, combined revenue of defense and commercial airplanes divisions. (Boeing,2014) 737, 747, 767,777and 787 are present commercial Boeing products of which product development and innovation are going on 787 Dreamliner and 747-8.
(Boeing,2014) Boeing has introduced new 787-Dreamliner commercial airplane promising to be most fuel efficient (20% less than the normal aircraft) and technically advanced with better flying experience. (Boeing,2014) ANA is the first 787’s customer with 50 planes delivered by 2008(Tavel,2013) First 787 flight was filed in Oct, 2011, three years behind schedule. Despite delay in project Boeing received 600 more orders from different airlines. (Boeing,2014) As of 2014, Boeing delivered 121 airplanes to 16 airplane customers around the world with 71000 flights operating experience.
.(Travel,2013) In 2012,Boeing has announced that it detected problems in fuselage section in some dream liners. (Travel,2013) According to official data,136 technical problems were recorded in 787 between September 2012 and November 2013. (Indian Express,2014) Boeing compensated $23 million for Air India airlines for losses incurred for grounding aircraft due to battery failure. Similar compensation package was given to all other airlines. (Indian Express,2014) Analysis Boeing Dreamliner 787 would have been a game changer if all the new changes have worked as desired.
The Essay on Boeing 787: The Dreamliner
... Market Positioning The 787 is positioned as the first midsized commercial airplane with long-range capability, which could offer non-stop service ... leading position in the industry, Boeing has initiated a new product strategy in 2004, named the Dreamliner, or the 787, to capture ... over long distance and greater flexibility for airlines to fill up the seats. Travelers’ preference to fly ...
Ever since its first flight in 2011, different airlines have complained problems in 787(Defense Aerospace, 2013).
Why does Boeing failed in its new prestigious commercial aircraft project? As building aircraft involves proper and careful integration of different manufacturing expertise, my analysis is on few of the important areas in which I found flaws and are responsible for Boeing failure. Battery failure Boeing 787 is first to introduce lithium ion batteries in airplanes replacing traditional aluminum batteries.
Lithium-ion batteries are powerful and light weight but they are inefficient with short life. They have history of caughting fire in laptops, computers and other electric gadgets. Ever since 787’s first take off, several flights are grounded because of fire alarm caused of overheating of these batteries. Onboard officials found batteries charred, swollen and leaking chemicals. (The New York Times, 2013).
Is this problem permanently fixable or it is a serious design flaw which was undetected? The root cause of this was still unknown.
Each flight grounded causes tens of thousand dollars loss to airline companies per day. Outsourcing Boeing followed new method of designing by outsourcing about 70% of 787’s complex aircraft parts to other companies. Boeing idea of outsourcing most of its parts is to cut costs from $16 billion to $10 Billion and to deliver as early as possible to its customers and increase production to meet enormous demand. Does this idea of Boeing really worked out? In reality, above idea resulted exactly opposite.
Boeing followed new supply chain method involving 55 Partners to which it outsourced most of the 787’s manufacturing complex parts. In my view there is nothing wrong in outsourcing few critical parts as expertise in some areas doesn’t always lie within one country. For example, lithium-ion batteries expertise is available outside USA(New York times,2013) . Outsourcing to other manufacturers involves culture and language differences and long distances make complex supply chain which tremendously increase risk factor.
The Essay on Boeing Value Chain Analysis
1) Inbound operation a) Materials New, lightweight, cost-effective structural materials are used in several 777 applications. (Referred to Appendix 1) Beginning in early 1994, The Boeing Company initiated a process improvement activity called Define and Control Airplane Configuration/Manufacturing Resource Management (DCAC/MRM). This “breakthrough” initiative will improve the processes ...
These suppliers failed to understand new technology Boeing has implemented in 787 and thus post production technical problems. Successful outsourcing need continuous monitoring and on-site communication with suppliers. Boeing early outsourcing did not estimate the additional cost involved in outsourcing and failed to successfully communicate with suppliers who did not understand new technology and failed to integrate. Thus the project is several billion over budget and delayed delivery. Complex Supply chain Boeing followed Tiered structure of supply chain method.
Tier 1 consists of more than 50 partners who are responsible to integrate and assemble parts produced by Tier-2 and Tier-3 suppliers. This model was successful in Toyota but why did it fail in Boeing 787? Boeing has just taken the method and implemented it without actually going into designing and estimated costs value. This complex supply chain outsourcing will be successful only after having critical design and estimated production costs. Outsourcing has to be given to suppliers who proved their ability in adopting new technology with quality and timely delivery.
Toyota was successful only because of continuous communication with suppliers by responding to their concerns promptly which was absent in Boeing supply chain management. Boeing did not provide any onsite support to its suppliers instead it relayed on sub-contractors who did not do the needful. As a result boing has to redesign entire assembling process which delayed project over several months. Too many changes Designing Complex aircraft needs high expertise and small negligence will pay off greatly.
Sometimes it is hard to implement widely used practices and manufacturing methods. Does Boeing successfully made all new changes in 787 with proper coordination? Boeing has implemented too many changes in 787 design, new electric system and different new innovations are made against traditional proven technologies. For example, traditional aluminum plates were replaced by new fuselage design involving carbon and titanium without actually knowing its performance in airplanes under extreme weather conditions.
The Essay on Outsourcing Jobs To Foreign Countries 2
Outsourcing Jobs to Foreign Countries Nowadays many companies face unprecedented pressure created by market. Survive and achieve success only those who organizes his business in the most effective way, achieving reduction of operational charges but saving high quality of the goods and services. One of the forms of the organization of business in modern economy outsourcing jobs. It is the practice ...
New supply chain model with 50 partners, Outsourcing about 70% of manufacturing. Coordination among so many new things is difficult and hard to achieve. Boeing failed badly in bringing coordination among all new changes. Labor Relations Technology expertise, manufacturing and implementing new technology with large supply chain model is one level of task and other and equally important level is labor relations. Labor are the one who need to assemble all the parts from different suppliers. Does Boeing labor adopted new changes? Are they involved in 787 design process?
Boeing labor who are extremely talented in assembling its previous airplanes such as 747’s and 777’s are not involved in 787 design and manufacturing process. As a result they are totally unaware of new parts with new technology coming from various suppliers all around the world. This made labor relations worse and costly strike followed. This made production delay and huge increase in manufacturing costs. Recommendations As per my analysis, Boeing 787 has constantly reported of different technical problems by various airlines.
it is not possible to pay compensation for each and every single problem and moreover it is resulting customer dissatisfaction and effecting brand value. Hence I recommend Boeing to call of all its 787’s for a quick battery recheck and provide technical support for airlines operating 787’s and make sure all the technical flaws are cleared. I also recommend to stop production of 787’s and investigate on the root cause of battery failure and come up with permanent solution. There is need of going through entire design structure and remodel various parts such as batteries, fuselage break system etc.
Supply chain model of Boeing 787 is big drawback. I suggest to group suppliers on area wise and provide onsite communication team who is responsible for all coordination and technical support needed for suppliers. By this step the area cultural differences doesn’t affect communication differences and products supplied from such groups are easy to detect flaws and it makes job easier to rectify problem promptly. Eventually outsourcing has to be reduced to 30% making manufacturing much easier.
The Essay on Riordan Manufacturing’s Supply Chain Design
Riordan Manufacturing (Riordan) is a global plastics manufacturing firm established in the early 1990’s. According to their website, Riordan currently has 550 employees and projected annual earnings of $46 million. Their focus is to be an industry leader in using polymer materials to provide solutions to their customer’s challenges. Current product lines include plastic beverage containers, custom ...
Finally, Boeing 787 apart from all technical difficulties it is going through are considered as teething pains faced by any aircraft in first few years of launch. 787 will eventually overcome all technical flaws but does 787 regain confidence of its customers? Both 787 and its rival Airbus 380 are competing in outsourcing beyond borders to reduce costs and share technological changes aimed at making planes lither to save fuel. Company with best fuel efficiency and economical will lead commercial plane manufacturing market
