Boeings: Operations Management

Boeings: Operations Management

Table of Contents

Last Reviewed/Revised: March 18, 2012

I. ABSTRACT.....................................................................3

II. DESIGN...........................................................................4

III. OUTSOURCING.................................................................5

IV. ASSEMBLY LINE............................................................6

V. PROJECT MANAGEMENT..................................................8

VI. STRATEGIC PLANNING...................................................10

VII. REFERENCES................................................................12

VIII. APPENDIX....................................................................13

Boeing: Operations Management

ABSTRACT

Known for its superior commercial planes, Boeing is the world leader in design, efficiency, and countless supporters to airline customers. Private firms, governments, leasing companies, and worldwide airlines compromise the more than 15,000 aviation customers delivered by Boeing. The midsize market will receive the anticipated cost efficient big-jet comfort airplane; 7E7 Dreamliner renamed 787, as Boeings newest entry into the market. The per-passenger basis savings in fuel performance of 20 % with unprecedented performance levels, provided by engines and systems of advanced materials incorporated into the newly designed Boeing 787.

Dreamliner's problems included out-sourced supply, manufacturing, and labor issues. Boeing outsourced 67% of its processes, not only was the work outsourced so was profit and capital investments. Boeing worked with Toyota's automakers to improve its production process. To develop lean production processes, Boeing created cross-functional teams. Boeing's project management has a large role in the success of the company, and it is used in levels in the corporation's framework. Strategic planning for discovering Boeings solutions will include JIT analysis and measurement processes and documentation (BusinessWeek, 2012).

DESIGN

Comfort, faster, and cheaper are empowered by Boeing's newest commercial airplane with advanced technology. The 787 Dreamliner will carry 210-290 passengers about 7,650 to 8,500 nautical miles (14,200 to 15,750 kilometers) in a tri-class configuration. Boeing's 787 were created with 50 % less weight that proved challenging for the historic feat of 6,000 engineers in more than 135 job sites using 3-D modeling technology (Appendix, Fig. 1). Aluminum was replaced with material of lightweight carbon-composite body and wings introduced by the world's first commercial aircraft entrance by Boeing famous for the 747 jumbo jets and its B-52 design (Appendix, Fig. 2). Boeing's plan to assemble the 787 in three days was initiated to reduce parts count. Boeing redesigned its planes to remove pneumatic components from engines, airframes, wings, starter motors, and replace with all electric components. It was created with a more powerful yet less fuel consuming jet engine by vendors Rolls-Royce, General Electric, and Pratt & Whitney. Even the lighting was altered to a bluish eye pleasing color. The 787 is designed to withstand damage tolerance of lightning strikes, moisture, temperature, runway debris, tool damage, rapid decompression, engine blade loss, rotor burst, hail, bird impact, and tire wheel threats (SMH, 2011).

Pioneering the Dreamliner project came with many complex challenges, beginning with piecing together at Boeing's facility in Seattle, Washington, various parts from a worldwide market and assembling the planes in three parts. Poorly capitalized suppliers were pressured intensely and domino effects created by delays as a result of Boeing strikes, nut, and bolt shortages at start-up. Quotas and deadlines could not be met because of suppliers subcontracting contractors. However, scheduling issues, engineering changes, fastener, production, certification, engine, cabin, fuselage, and wing design issues was brought upon by exporting its in-house engineering as a big change in Boeing's existing process (SMH, 2011).

OUTSOURCING

"To reduce the 787's development time from six to four years and development cost from $10 billion to $6 billion, Boeing decided to develop and produce the Dreamliner by using an unconventional supply chain new to the aircraft manufacturing industry" (Tang 2009, p. 77). Boeing had a vision to keep manufacturing and assembly costs low by spreading the financial risks of development to their suppliers through outsourcing. In development of the 787 Dreamliner, Boeing has formed more than 50 strategic partnerships with suppliers in Italy, Japan, China, United States, Canada, United Kingdom, Korea, Brazil, and Germany. Each partner serves as an integrator who assembles different parts and subsystems prior to the final assembly by Boeing (Appendix, Chart 1)

Boeing completely changed their former supply chain process into a newly redesigned model that would cut costs drastically, accelerate production, and increase profits. Outsourcing increased from the average 35% for most airplanes to 70% for the 787 Dreamliner. Increasing outsourcing has shortened the development time significantly because the different suppliers can work on different parts and components simultaneously. Boeing planned to reduce development costs by exploiting each supplier for their expertise and excellence in the parts they were manufacturing. This system allowed Boeing to focus its attention exclusively on assembly, rather than the procurement of raw materials to make each component of the 787 Dreamliner. Once each supplier completed their subsystem, Boeing would have to complete the finally assembly of all the parts (frame, wings, engines) they had outsourced (Appendix, Outsourcing Chart: Tang 2009, p. 78)

. Outsourcing all the subsystems and components was a genius idea because it saved time, made money, and eliminated risks. "Under the 787 supply chain, Boeing only needed three days to assemble complete sections of the Dreamliner at its plant because the suppliers had already built subsystems of each section" (Tang 2009, p.79). However, if a supplier ever missed a deadline it could