The world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems.

They provide commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems and performance-based logistics and training.

They are committed to being the leader in commercial aviation.

BOEING 787 DREAMLINER

● 1ST Plane made entirely of composites

● Consumes 20% less fuel than an equivalent 767

But delayed delivery. Instead of

2008, deliveries didn’t start until

2011

SCOPE

A.About the reasons of delay that the project faced

B.Revised plan that the company undertook to answer to the delays that happened

C.After the revisions of plans, the labor problems that Boeing faced as its effect

OBJECTIVES AND APPROACH

A.Find the reasons of delays

B.Its impact to the business

C.Suggest corrective action or prevention on the company’s major problems

REASONS OF DELAY 1. Unexpected shortage of fasteners

2. Underestimation of work content in the task of writing flight code

3. From bleeding edge to leading edge

4. Blaming Boeing’s Business strategy

5. A labor strike threatens progress

Unexpected shortage of fasteners• Shortage of fasteners, aluminium and titanium

bolts due to labor shortage resulted to rushing the suppliers in making them and the improper documentation of work

OBSERVATION

• Lay off due to crisis, industry experienced a decrease in fastener production capacity

• Due to change lower volume demand of fastener, its delivery is given less priority

• Improper installation of fastener

IMPACT & ANALYSIS

• Understand the cause of delay and focus on it• Create an effective delivery & supply management• Official from Boeing to supervise with suppliers

RECOMMENDATIONS

• Boeing & Honeywell underestimated the vital task of knowing the time required to finish writing the Flight Control Codes

OBSERVATION

• They have to lower the price of each unit to get back to the market

• They have to double time and have to double its learning curve compared to production on 777

IMPACT & ANALYSIS

• They should have a standard and proper schedule of their work

• They should have a back up plan in case of delays which affects their schedule

RECOMMENDATIONS

Underestimation of work content in the task of writing flight code

• To improve customer experience, they change the plane’s major composition which makes it lighter. But it also results to major changes and redesigning.

OBSERVATION

• The Federal Aviation Administration grounded the fleet after some problems it encountered.

IMPACT & ANALYSIS

•DEMAIC MethodologyRECOMMENDATIONS

From bleeding edge to leading edge

• Outsourced most components overseas • 50 Risk -sharing partners which struggled either building

the components themselves or getting the parts they need• some suppliers lack strong aerospace experience• Boeing failed to manage traveled work efficiently

OBSERVATION

• Outsourcing-tool of reducing cost; pass the financial risk to suppliers

• Failed to acknowledge new internal tasks. Result = increase in execution costs

IMPACT & ANALYSIS

• Thorough outsourcing risk assessment• Do not minimize cost in isolation• Should account possible cost brought about by the negative

impact on business processes, company reputation and customer satisfaction

• Identify minimum production that should be maintained in-house to generate sufficient cash

• Design suitable incentive plan to motivate suppliers• Look continuously to the entire activity

RECOMMENDATIONS

Blaming Boeing’s Business strategy

• Strikes by International Association of Machinists (IAM) and the Society of Profession Engineering Employees in Aerospace (SPEEA) were threatening Boeing

• caused by the management’s failure to reach an agreement on proposed three-year contract

• Although wages and benefits were important issues, job security emerged as the main issue.

OBSERVATION

• Boeing – could lose up to 100 million in revenues a day; 30-40 cents from EPS

• Airlines- dissatisfied; opportunity for Airbus• Supplier-reschedule deliveries • Local Economy- increase in defaults on home loans and credit-card debts • US Economy- increase jobless claims; decrease durable goods orders

figures

IMPACT & ANALYSIS

• Consult labor unions as to outsourcing plans and planned new supply chain model

• Devise incentive program that is both beneficial to both sides

RECOMMENDATIONS

A labor strike threatens progress

COMPANY ANALYSIS

● SWOT

●PORTER

●PESTLE

PORTER’S

CONCLUSION There are many ways for Boeing to prevent delays. Innovation is good but they should consider risk assessment. The problem begins with the risk that they failed to account.

Managing global supply chain and adopting carbon fiber could have great leap to success but the management team must have experience or expertise on:

Improvement of supply chain visibility Full understanding of cost estimation Improve supplier training and selection process Be involved more on the relationship with your labor union