Information Exchange Problems May If You Were The
The first Boeing 787
Dreamliner was delivered to Japan’s ANA in the third quarter of 2011, more than
three years after the initial planned delivery date. Its complicated, unique
design (including a one-piece fuselage that eliminated the need for 1, 500 aluminum
sheets and 50,000 fasteners and reduced the resulting weight of the plane
proportionally), promise of 20% increase in fuel economy and reduction in ‘out
of service’ maintenance time, and problems with early testing of the new design
all contributed to the giant project’s troubles. Delivery of Boeing’s 787
Dreamliner project was delayed, in part, because of their global supply chain
network, which was touted to reduce cost and development time. In reality, this
turned out to be a major cause for problems. Boeing decided to change the rules
of the way large passenger aircraft were developed through its Dreamliner
program; rather than simply relying on technological know-how, it decided to
use collaboration as a competitive tool embedded into a new global supply chain
process. With the Dreamliner project, Boeing not only attempted to create a new
aircraft through the innovative design and new material, but it also radically
changed the production process. It built an incredibly complex supply chain
involving over fifty partners scattered in 103 locations all over the world.
The goal was to reduce the financial risks involved in a S10 billion-plus
project for designing and developing a new aircraft and reduce the new product
development cycle time. It tapped expertise of various firms in different areas
such as composite materials, aerodynamics, and IT infrastructure to create a
network in which partners’ skills complement each other. This changed the basis
of competition to skill set rather than the traditional basis of low cost. In
addition, this was the first time Boeing had outsourced the production on the
two most critical parts of the plane- the wings and the fuselage. The first
sign of problems showed up just six months into the trial production. Engineers
discovered unexpected bubbles in the skin of the fuselage during baking of the
composite material. This delayed the project a month. Boeing officials insisted
that they made up the time and all things were under control. But next to fail
was the test version of the nose section. This time a problem was found in the
software programs, which were designed by various manufacturers. They failed to
communicate with each other, leading to a breakdown in the integrated supply
chain. Then problems popped up in the integration of electronics. The
Dreamliner program entered the danger zone when Boeing declared that it was
having trouble getting enough permanent titanium fasteners to hold together
various parts of the aircraft. The global supply network did not integrate well
for Boeing and left it highly dependent on a few suppliers. This case clearly
underscores the hazards in relying on an extensive supply chain in which
information exchange problems may create extended problems and seriously
compromise a company*s ability to carry out business as planned. Creating a
radically different process can mean encountering unexpected problems. In some
cases, it would put a company so far behind their competition that they were
doomed to fail. However, in this case, the major competitor to the Dreamliner,
the Airbus 380 program, was also using a global supply-chain model, and its
program was delayed by a couple of years. The result for Boeing was a
much-anticipated plane with fuel economy and outstanding design that made the
wait worth it, but the resulting design, a plane that holds up to 250
passengers, compared to the A380, which has a seating capacity between 525 and
853, was a major compromise.
Question:
If you were the program manager, what would you have done differently to avoid the problems faced by the Dreamliner program?
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