Symbiosis Institute of Business

Management

World Class Manufacturing

Making of Boeing Dreamliner Case Study
Case Analysis
Submitted to Prof. Hemant Pundle

Fakhri Daruwala
Executive MBA Sem III
Roll Number - 38412

Q1. Explain the importance of innovation in the aerospace

industry and how Boeing managed the supply chain to
come up with a product that was hailed as a major
innovation.
Answer:
Importance of innovation in aerospace industry:
Innovation in aerospace is crucial for the evolution of this sector,
not only to ensure that important discoveries are made, but also
that this industry continues to contribute to the organization and
countrys economy the way it has been or increase its growth
rate and revenue over time.
Without innovation the industry would become stagnant and
unable to keep up with breakthroughs and pioneering
technologies in other markets, which would mean the aerospace
sector could be at risk of not just falling behind, but also slowly
becoming obsolete.
Aerospace engineering reflects the synergistic interplay between
various branches of engineering. The path breaking technologies
developed by interdisciplinary research have contributed to
tremendous advances in Aerospace sciences. Using many of these
technologies, developed originally for aeronautics/aerospace
applications, researchers today are reporting new and novel
industrial applications. This confluence of basic sciences like
biology and engineering is the emerging new area of research
which is both fascinating and intellectually stimulating.
Some of the innovative developments of aerospace technologies
in recent times include new shock wave assisted applications in
the area of medicine, drug delivery systems, bio-technology,
manufacturing industry; space solar power systems, energy
storage systems, fuels cells, use of supercomputers, development
of transdisciplinary computational techniques and cryogenic
applications. The carbon fiber based composites used as heat
shield material during re-entry is today used to manufacture cost
effective artificial limbs for people with physical disabilities. The

manufacturing techniques specially developed for machining

components for aerospace applications have been instrumental in
the development of innovative heat exchanger systems for
ground based applications.
Maintaining a spot is vital, especially when aerospace had the
high global market share of 17% in 2015, an incredible number
that clearly proves this sector is a goliath in the overall market.
Innovation is the driving force behind the growth of many
industries, including the aerospace sector. Without a strong
emphasis and effort on revolutionizing techniques, procedures
and technologies, no business could expand or succeed.
Management of Supply Chain:
Boeing chose to outsource over 70% of the manufacturing
operations to suppliers around the globe. The aim of this was to
reduce the cost of development from $10 to $6 billion. Boeing
radically changed its traditional supply chain which was between
35% to 50% outsourcing, to adopt over 70% outsourcing.
According to (Denning, 2013) such drastically dispersed supply
chain can lead to tribal risk. Different countries speak different
languages and hence may interpret data differently.
The Company partnered with 50 different suppliers globally during
the manufacture of the Dreamliner 787.
Also Boeing adopted the use of multiple source supplier strategy
when designing the engines of the plan. Customers select either a
Rolls- Royce Trent Engine or a General Electric GENX Engine.
The supply chain of Boeing was structured such that
preassembled goods are supplied to Boeing by Tier one suppliers.

Traditional Supply Chain:

Dreamliner Supply Chain:

Q2. Discuss the reasons for the post launch problems

faced by the 787 Dreamliner.
Answer:
Boeing looked to have turned the corner with the 787 once
deliveries had started, but since launch it has been plagued with
a number of high-profile problems fuel leaks, smoke in the
cabin, and fires.

The issues the plane has been facing have much more to do with
Boeings decision to treat the design and production of such a
radically new and different aircraft as a modular system so early
in its development.

The coordination risk: Due to the pressure to meet

stipulated delivery dates, a lot of suppliers were delivering
unfinished products to one another. Boeing only noticed
these problems during the assembly of the preassembled
airplane components from Tier one suppliers.
The innovation risk: The 787 involved not merely the
outsourcing of a known technology. It involved major
technological innovations unproven in any airplane. The
innovation risk implied a greater involvement by Boeing in
the development and manufacture of the aircraft.
Astonishingly, Boeing opted for lesser involvement,
delegating much of the detailed engineering and
procurement to sub-contractors.
The outsourcing risk: Boeing undertook one of the most
extensive outsourcing campaigns that it has ever attempted
in its history. This is one of the major problem faced by
Boeing from its suppliers.
The risk of communications by computer: Rather than
plan for face-to-face communications and on-site
communications, Boeing introduced a web-based
communications tool called Exostar in which suppliers were
supposed to input up-to-date information about the progress
of their work. The tool was meant to provide supply chain
visibility, Suppliers did not input accurate and timely
information, in part due to cultural differences and lack of
trust. As a result, neither Tier-1 suppliers nor Boeing became
aware of problems in a timely fashion.
The labor relations risk: The outsourcing approach
backfired, as labor relations worsened as a result of the
outsourcing decisions and a costly strike ensued.

Q3. Analyze the pros and cons of outsourcing in aviation.

Answer:
Pros:
Greater revenue realization and enhanced return on
investment,
Lower labor costs and increased economies of scale,
Broader knowledge base for better innovation,
Greater focus on core competencies rather than routine
activities,
Increased speed and improved quality of product/service
delivery,
Reduced cash outflow for an airline and optimized resource
utilization,
The ability to offer customers access to call-center agents or
customer-service representatives 24 hours a day, regardless
of their geographic location.
Cons:

Possible loss of control over a non-core business process,

Problems related to product/service quality,
Sluggish response times coupled with slow issue resolution,
Shortcomings in performance versus the airlines
expectations,
Lower than expected realization of benefits and results,
Issues pertaining to language barriers,
Dissatisfied customers coupled with enraged employee
unions.
Q4. Discuss and debate whether the 787 Dreamliner can
be considered an innovation in light of the problems it was
facing.
Answer:
FOR:

 The project was a success from the customers point of view,

especially for the purpose of traveling long distances.
787 Dreamliner is spacious and provides ample comfort to
its customers.
The Way Product Design, Production of Modules and final
assembly was carried out was the first time in the industry.
No other industry had every before tries and integrated such
a d robust supplier base like Boeing did for the 787
Dreamliner Project.
Use of composite materials for Airplane Body and effective
monitoring of body parts through centralized monitoring in
commercial aviation was introduced by Boeing only.
AGAINST:
The underlying problems of the suppliers collectively
attributed to the final assembled product, 787 Dreamliner.
Co-ordination among huge supplier base was itself a problem
and respective human factors of each supplier made it more
complicated for the Boeing team to manage it as a whole.
Multiple times failure of product launch for the 787
Dreamliner is a self-indicator of many things went wrong for
the manufacturing process.
Post-Launch Problems observed by Boeing itself and
subsequent Airlines Companies also indicates that postproduction testing and quality conformance was not adhered
to.
Q5. Explore ways in which Boeing could salvage the
situation.
Answer: