Dreamliner Project Risk Analysis

Running head: Dreamliner Project Risk Analysis

Boeing 787 Dreamliner Construction Project Risk Analysis

Vinod A Jacob

Table of Contents

Introduction 3

Construction Project Risk Sources 3

Risk Management Plan Suggestions 5

Catastrophic Event Tree 6

Fault Tree 1 6

Discussion of Fault Tree 1 8

Fault Tree 2 9

Discussion of Fault Tree 2 9

Conclusion 9

Works Cited 10

Appendix 11

Introduction

The Boeing 787 Dreamliner is one of the first long-range, mid-size wide-body, twin-engine jet airliner in the aviation industry in the 21st century. (Ostrower, 2011) The plane can seat from 210 to 290 passengers depending on the model; the 787-8 is the baseline model and the second model is the stretched 787-9. (Pietersen, 2011) This aircraft is the most fuel-efficient airliner with a 20% advantage in fuel consumption and the world's first major airliner to use composite materials for most of its construction including the wing and fuselage accounting for 50% of the plane's weight. (Peterson, 2011) These advancements increase the performance of this jet liner allowing it to fly from San Francisco to London non-stop. These changes in technology and process resulted in new risks.

The concept of risk management is equivalent to insurance, it is important and required to protect against harm in case it does occur. It is important for risk management to be applied to the project so we can determine the sources where risk can result and implement systems to prevent them from ever occurring throughout the project. The catastrophic failure of the project can be shown with the use of a fault tree and show us the extreme risks of the project and what-if scenarios if everything goes wrong with concerns towards environmental effects. Finally we will discuss two smaller risks that Boeing has faced with this project and we will visualize and explain these risks using fault and event trees. One risk is the extension of the Dreamliner testing phase. The second risk that will be discussed is the problems that can occur with the quality control process.

Construction Project Risk Sources

The sources of risk for this Boeing Dreamliner project are in the same category as general construction project risk; most of these sources expose another source to risk. The suppliers of parts and equipment for the Boeing 787 Dreamliner aircraft are a source of project risk because the parts and equipment are vital pieces that are required to create a fully functioning aircraft. If the parts are not delivered on time or there is an issue with the supplier then construction will be delayed causing problems with the schedule. It was also determined that thousands of fasteners were installed wrong during regular inspections. (Campbell, 2009) The problem was there was a shortage of fasteners due to the fact that Boeing outsourced their parts and therefore delayed production of the plane; the results of these shortages have caused Boeing to build the plane out of sequence. (Dodge, 2007)

Another problem is that rather than build the plane in house, Boeing chose to use suppliers around the world so they would not have to shoulder the entire cost of the plane. (Ray, 2011) As Johnsson and Greising (2007) point out Boeing chose to use a "daring global manufacturing network it put in place to make the plane, flying in sections of the plane from companies in Japan, Italy, South Carolina and Kansas and "snapping" them together in only three days' time" This technique promised to be revolutionary but ended up being problematic. At that time of this delay of the plane, it still had not even flown yet it was still costing Boeing and its suppliers billions of dollars in penalty payments and producing a cash shortfall of $1.2 billion dollars. (Johnsson et. al, 2007) This brings us into our next source of risk for this project, the costs and timing.

The costs and timing are a source of project risk because a high cost can impact the project schedule and cause the deliverables to be delayed. Timing of the schedule is also important because it allows the project manager to deliver the project on time; this makes the project tasks makes the project run more efficient by keeping them to a strict timetable. As shown in figure 1 below as a result of all the project delays there was $16.2 billion dollars held in inventory as of June 30, 2011. (Ray, 2011) The cost is one of the triple constraints of any project so this is primarily a source of most project risk.

Construction designs and procedures / methods are another source of risk from this project. Being a construction project, the design and how the deliverable is constructed is an excellent source of risk because if the design is faulty or procedures are not followed than problems can occur. Before the Dreamliner was scheduled to take its first flight, there was a problem