Case study of Boeing Dreamliner

Critical Facts:

Boeing is the world’s largest manufacturer of military and commercial aircraft, which was founded in 1916 by William Boeing and Navy Engineer Conrad Westervelt in the name of Pacific Aero Products Company in Seattle, which after active participation in World war-I was renamed to Boeing Airplane Company (Frederick, 2014). Boeing produced several hundreds of B-17 Flying fortress during World War II which became the U.S Bomber. In 1950’s Boeing faced a tough competition from its opponent McDonnell-Douglas which was good at manufacturing propeller aircraft.

Due to the increased reputation of its competitor, Boeing entered into the field of manufacturing commercial Jet-aircrafts in a full-scale (Frederick, 2014).

Boeing, after its full-scale entry into commercial aircrafts modelled aircrafts such as 707, 727,737,747,767. The letters of the series from 707 to 777 begins with seven in terms of publicity aspect. Among these aircrafts 747 is the jumbo-jet and 777 is an aircraft designed by completely relying on computer technology. For each and every aircraft it had released in the commercial market, it opted for model rejuvenation (Frederick, 2014).

Tang, 2009). Boeing Dreamliner with the 50% use of composite material benefitted in two distinct ways of Fuel Efficiency and Easy maintenance due to which it is free from rust for several years.

Fuselage and wing mostly comprises of composite material rather than the traditional material (Aluminum). Manufacturing of Dreamliner 787 involved a new supply chain process of outsourcing major extent of the components and assembling all these components by Boeing at their assembling hall. These made several Tier1 suppliers to get involved in these project such as Spirit, Kawasaki, Alena and Vought (Boeing Corporation, 2014). Because of complexity in supply chain system and lack of Information system collaborating all the suppliers involved in the project of Dreamliner 787, made Boeing to undergo some hassles which resulted in delay of first flight for a period of 27 months and its delivery to the customer for a time of 40 months. This overrun resulted in huge investments of $11 billion more than the planned investment on the Dreamliner 787 Project (Zhao, 2012).

Analysis:

Boeing as to increase the Performance of 787 Dreamliner, introduced a complex supply chain process, which integrates the best aerospace companies all around the globe to design the critical components of 787. Also it had changed its manufacturing model from a vertical model to a global partner model. With the implementation of these new strategies Boeing want to reduce its cost and time in development, as a result of rising its market share than that of its competitors. Boeing after moving to the new global partner model faced several problems. As the supply chain process is spread all over the world Boeing got into trouble of coordinating with its partners. The big risk in this model was Boeing had to ensure that all the partners involved in 787 manufacturing are visible to the information provided and also it should have access of the information about its vendors in order to ensure that they are capable of delivering on-time (Danning, 2013).

Boeing as a part of new supply chain process it spread its components manufacturing all over the world. So as to get coordinated with its vendors and in the process of obtaining information from them it introduced a new communication web-based tool developed Exostar supply chain management solution. Because of this tool, Boeing wanted to collaborate its partners planning schedules and progress in work so as to ensure that no delay in manufacturing. But Exostar which opted by Boeing posed problems during its runtime. Also as a part of cultural difference and due to lack of trust on other suppliers some of the vendors involved in 787 design did not input accurate and timely information. As a result of this inaccurate information Boeing had not discovered the problems at the early stages and in a timely fashion (Zhao, 2012). Boeing during 2003 lost its share value to Airbus which is a strong opponent to it (Boeing Corporation, 2014).

In order to regain its value in the market Boeing decided to design an aircraft by enhancing its customers. So in the process of designing a new aircraft Boeing decided to use composite carbon fiber instead of regular aluminum to an large extent which had not been implemented in the past. Because of this composite fibers Boeing estimated to decrease the cost of travel for its passengers and to increase fuel efficiency. But this step backfired in getting air bubbles on the skin of fuselage and nose during assembling of aircraft which resulted in delay of 787 Dreamliner (Pearlson & Saunders, 2013) Boeing in the process of reduction in time and cost it opted a supply chain process in which it adopted from Toyota. Toyota manufactures its products with short development life cycle with minimal risk and cost. Boeing in the same perception of minimal risk and cost opted this process. But this resulted Boeing into deep risks by lack of accurate information and improper delivery by its vendors (Pearlson & Saunders, 2013).

The 787 Dreamliner involved lot of technical and non-technical innovations which had not been implemented in any of aircraft manufacturing such as 70% of composite material replacing aluminum, Lithium ion batteries, new systems of electrical is a huge task to achieve. While dealing with such complex and huge innovations one should involve in maximum extent of the project but whereas Boeing opted for minimal involvement by relying on its Tier1 suppliers. This resulted of increase in costs and timeline of aircraft delivery (Danning, 2013). As a part of establishing its market share with no longer duration it implemented global manufacturing model which involved maximum extent of outsourcing its components design which left Boeing just with assembling the aircraft.

This resulted workers at Boeing in fear of their jobs in trouble lead to strike for 3 months. Because of this strike it lost lots of money due to no production of work (Michael, 2012). Conclusion: The aforementioned problems are some of the main reasons of Boeing Dreamliner 787 is not delivered on time. While starting a new project with such huge innovations and risks every firm would be cautious by following certain steps that helps the project to run in a smooth phase without any complications in which Boeing failed to do so.

Recommendations:

While adopting a certain process from other organizations or firms it is better to know the principles and rules that are involved and need to examine the process implementation. I would recommend if Boeing would have followed the same implementation process as of Toyota with pre-defined steps it would have saved billions of dollars which would have lead Boeing into top aerospace industry While implementing a new supply chain process it is always better to have face to face coordination rather than coordinating through computers or on relying through some technology. I would recommend although information entered through computer will be for future purpose but as the process is globally spread out it would have been better if Boeing have send its employees, engineers and skilled workers to have spy on its suppliers or vendors.

For any industry that is going to develop new product with innovative material instead of traditional material it is the responsible of that industry to perform research and experiments so as to get some analysis of the innovative material and to be cautious of the problems that arise in the future. If Boeing would have done the analysis on using composites in major part of aircraft production then no delays due to rise of air bubbles on fuselage section and on nose section.

I would have recommend to hire high skilled workers who are having experience in aircraft industries and dispatch them to vendor location for the guidance of vendors to follow certain rules and regulations or the standards followed Boeing. As the project involved more amounts of risk factor I would suggest Boeing would have been involved in every phase of project completion, so as to get correct updates and to speed up the work than deadline estimated, which would have resulted in rise of fame and reputation of Boeing for producing aircraft at very cheap cost than estimated.

References:

Anupindi, R. (2011, 10 10). Case study:Boeing’s Dreamliner.Boeing Corporation. (2014). Boeing. Retrieved from Boeing 787 Dreamliner: http://www.boeing.com/boeing/commercial/787family/background.page? Danning, S. (2013, 1 28). What Went Wrong At Boeing?Frederick, P. (2014). VIEW AMERICA WHAT TO SEE. In P. Frederick. view america. Michael, A. J. (2012, 10 25). Boeing :787 case analysis. p. 15. Pearlson, K. E., & Saunders, C. S. (2013). Managing and Using Information Systems. John Wiley & sons. Zhao, Y. (2012). Why 787 Slips Were Inevitable. p. 16.

Zimmerman, & S.Tang, C. (2009). Managing New Product development and supplychain risks. Supply chain forum, 14.