The Boeing Company is one of the worlds largest US based aerospace company which is founded by William Boeing in 1913. Boeing manufactures defense, space and security systems and commercial airlines. Boeing is well known for its wide range of products and services which include commercial and military aircrafts, weapons, satellites, electronic defense systems, launch systems and information and communication systems (Boeing, 2013).
One among the list of products listed above, we will be discussing about the prestigious commercial airplane of Boeing i.e. Dreamliner 787. From past 4 decades, Boeing has been the leading manufacturer of commercial jetliners. Boeing commercial airplanes – is a business division of the Boeing Company with its headquarters located in Renton, Washington (Wikipedia, 2013). Since beginning, Boeing’s commercial jetliners are named 7X7 series with first one Boeing 707 launched in December, 1957 (Wikipedia, 2013). Other jets released to date include 737, 747, 757 (Ended on 2004), 767, 777, 787 with 787 being the latest. Boeing 787 Dreamliner
The first Boeing 787 Dreamliner was delivered to Japan’s ANA in 2011, nearly 40 months after the planned delivery date. The expected delivery was in May 2008 where as the major changes in design and supply chain led to an unexpected delay (Keri E. Peterson et al, 2013). The fuel efficient 787 Dreamliner‘s manufacturing has become complicated due to multiple changes implemented all at once. Far from the traditional manufacturing, Dreamliner design consists of many new features like unique design, one piece fuselage, reduced weight, 20% increase in fuel economy, and reduction in maintenance time. Apart from the changes in design, another major difficulty was the company’s global supply chain network (Keri E. Peterson et al, 2013).
Boeing has significantly changed the production process along with design changes. In addition, Boeing outsourced two most critical parts – fuselage and wings. Everything put together, the complications kept increasing and so is the delay. Yet, finally the plane entered the market years late but the design came out as expected! The plane can hold up to 210- 250 passengers on routes of 7650 – 8200 nautical miles and satisfies the fuel economy by consuming 20% less and travels at the same speed when compared to other similar sized airplanes. Boeings offering 3 variants in Dreamliner series with 787-8 as the first followed by 787-9 which carries 250-290 passengers and 787-10 which is launched in June 2013 with seating of 300-330 passengers (Boeing, n.d.)
Though Boeing has not landed the Dreamliner at the expected time, the outcome made the wait worth by satisfying all the design requirements. 787 Dreamliner has got all the features that are mentioned in the design. Yet, the Airbus’s A380 which is released a year earlier is much bigger with 500-853 capacity than the mid-sized 787. Though the A380 has fat capacity, the Dreamliner was more fuel efficient. Dreamliner 787 design process has got several hurdles due to the change in its manufacturing process and changes in the design.
With the design changes and fuel efficiency, Boeing faced several complications in development process. As questioned in the case study, one might think why Boeing has taken the radical approach for designing 787. In my opinion, it is a good move to change the design process which reduce the financial risks and production cycle time. Yet, Boeing also planned for major design changes which is yet a good move but not at the same time. Being a large business, the company shall implement changes on one area at a time.
Changing either production process or design process might have resulted in a successful delivery at the expected time. But, when two major processes changed at once, the co-ordination would become difficult which exactly is happened with Boeing. From the scenario, I can say that, a company needs to go at a slower pace when transforming its business strategies. While changing the business strategies, another point to keep in mind is – External environment. There are competitors for every business! When the company is delivering a product, they should analyze how well the product would be received by the target and how well the products outdo the competitors.
Embraer, Bombardier and Airbus are the top competitors for Boeing commercial airlines (Bga-aeroweb, n.d.) (Hoovers, n.d) and among them Airbus released a new plane at around the same time when Boeing released 787 Dreamliner. When two major companies release their products at the same time, people compare both the products. In Dreamliner scenario, A380 has arrived a year earlier with higher seating capacity and occupied the top chair. (Findthebest, n.d)
As far we knew that the Dreamliner took off after several complications throughout its development. True that the development was a challenge but the Dreamliner is mere one among a wide range of products Boeing develop! The Boeing Company has got diverse corporate and business level strategies which make it top the list in global market. Along with commercial airliners, Boeing also manufactures aerospace, defense technology and services.
NASA is a customer of Boeing for their spaceships. Boeing’s corporate level strategy is nothing but diversity. Even though the Airbus gives a tough competition, Boeing has other sectors which Airbus cannot compete with, which gives a competitive advantage (Blake, 2010). Diversity allows the company to stay competitive even if one part of the business is less profitable. To overcome the Dreamliner issue, Boeing has its business strategies like brand name, customer switching cost and barrier to entry.(Mtsai6, 2011)
Changing the vendor is not an easy task in airplane business where brand name and experience matters more than anything. Other benefit is the barrier to new entrants. Due to the huge capital and high technology need, threat from new entrants is zero to very less. Even though, to regain the customer reputation, Boeing has to take actions in delivering the products on time and retain its competitive advantages. Silo perspective Vs business process perspective Silo perspective can be very well applied to supply chain failure with 787 Dreamliner. Introducing a new supply chain along with the changes in design could be one of the mistakes which led to the damage.
Communication is an important tool when suppliers are from various countries across the globe. There should be a team coordinating all the suppliers to make the things complete on time. If a supplier is reluctant to discussing or sharing their product to another stranger supplier, there occurs a communication gap which leads to wasted efforts. A good business process should let all the suppliers build a healthy environment and let them take time to communicate before starting the production. Dreamliner production has got unexpected complications due to lack of relation and trust between the suppliers as they are from different parts of the world.
Vendors/suppliers should develop a healthy relation much before starting to work together on a common goal. Boeing manufactures various products related to different sectors in the world. Being involved in verity of services and products, Boeing still stays on the top of the list. The main reason is, even though Boeing is a single multinational corporation, it has divided the company into 5 major divisions each managing their respective sector.
Recommendations
The Dreamliner scenario is an example of management collapse. Despite the fact that Boeing is a huge successful company, the failure happened due to lack of co-ordination and commitment. The other major reason is trying to change the process and product at a time. Below are some recommendations for this scenario.
- Limit changes to product itself by keeping supply chain change to future project
- Implement global supply chain for existing
products before implementing any new products - Assign a separate team for coordinating with suppliers which would let the supplier to communicate with each other.
- Make sure the products are delivered on time in future
- If I were the program manager, I would have taken necessary actions to avoid supply chain issues. I would have set up a meeting with all the suppliers and explain the situation which could make them understands and deliver better.
- One person for each supply chain could have been worked onsite to monitor the work progress and communicate the on goings with Dreamliner team.
Conclusion
One can learn various business lessons from the Dreamliner scenario. Without proper planning and communication, established and successful companies can also miss the target. What makes them successful is how they control the damage by taking recovery actions. From this, we can learn that, mistakes may happen with any business but how the company withstands and recover makes it a brand like Boeing.
Reference
- Bga-aeroweb (n.d.), The Boeing company: Competitors and Competition: http://www.bga-aeroweb.com/firms/Competitors/Competitors-Boeing.html
- Blake (2010), Boeings corporate level strategy: http://blakes1blog.blogspot.com/2010/03/boeings-corporate-level-strategy.html
- Boeing (n.d.), 787-10 Dreamliner Fact sheet: http://www.boeing.com/boeing/commercial/787family/787-10prod.page?
- Boeing Public relations (2013), About Us : http://www.boeing.com/boeing/companyoffices/aboutus/brief.page
- Boeing (n.d.), 787-9 Dreamliner Fact sheet: http://www.boeing.com/boeing/commercial/787family/787-9prod.page?
- Boeing (n.d.), 787 Dreamliner: http://www.boeing.com/boeing/commercial/787family/background.page?
