If you have kept an ear on the news
recently, you are probably familiar with all the fuss the Dreamliner is
actually attracting, and it is far more dour and having less to do with “plane
of the future” and more to do with “battery fires” and “malfunctions”. After
two such fires, one of which occurred while the plane was mid-air, and a
slew of other incidents since its release, the FAA issued an emergency
airworthiness directive on January 16, grounding all U.S.-operated Dreamliner flights . While there is no definitive answer yet as to what is wrong with the
787, all signs are pointing to a problem that may have been plaguing the plane
before the first one ever left its hangar: inconsistency within the supply
chain.
For the first time in the company’s
history, more than 30% of the plane’s components were outsourced for
manufacture overseas before being delivered for assembly at its plant in
Everett, Wash (compare that to 5% for its previous flagship, the 747). Because
of this, supply issues inundated the project early and often. Large components,
constructed in eight countries across three continents, arrived unfinished due
to sub-component supply shortages from overseas suppliers that could not meet
output demands, creating additional work and delays that wreaked havoc on the
company’s streamlined, just-in-time assembly line. Boeing’s attempts to resolve
these issues saw it alternate between delaying the plane’s release (it went
from 2008 to 2011 in a series of pushbacks) and buying back some of the
suppliers in order to regain production control. While outsourcing production
was perceived by many as a cost-cutting maneuver, it is estimated that doing so
cost the company in excess of $2 billion.
As the investigation into the planes
malfunctions continues down the extensive list of possible culprits from its
supply chain, it’s becoming ever so apparent that the lack of supplier
management is causing some very serious repercussions for Boeing. While they
have not disclosed exactly whose responsible for choosing the suppliers that
created the initial delays, they did replace the 787’s program manager after
the first two delays in 2008, however telling that may be. Furthermore, several
executives have now admitted that the heavy reliance on subcontractors might have led to
partnerships with suppliers that were unsuitable for the workload and that an
increase in outsourcing should have warranted a significant escalation in the
oversight of their sourcing initiative. Boeing’s difficulties with overseas
suppliers may prove to be a humbling lesson in the limits of successful
outsourcing and a warning bell to the importance of keeping control of every
aspect of a project.
What other steps have the sought to mitigate their sourcing problem. I know in my prior life in Pharma, they setup a strategic sourcing chain that would be able to fill raw material needs, should one supplier become unavailable. I believe the key to this approach working is setting up QA/QC standards that will ensure the same quality deliverable irrespective of the supplier.
ReplyDeleteThe most recent news says that since recognizing the problem during the last few years of production, Boeing attemped to alleviate the issue by significantly increasing their supplier oversight and visibility through the supply chain. It'll be interesting to see how this plays out in the future though seeing that have recently announced plans to increase production of the 787.
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