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Lessons From Boeing's Dreamliner Supply Chain Missteps

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elctrnx_lyf
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Cost vs profit
elctrnx_lyf   2/28/2013 12:17:48 PM
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I think the Boeing approach probably didn't work perfectly as they expected it to be. It is definitely not a lesson Boeing wanted to learn. Hopefully they solve this problem soon and there will be more importance given to the operational excellence. Even a bit of negative thing could just bring the complete company down.

Brian Fuller
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Re: Cost vs profit
Brian Fuller   2/28/2013 1:29:40 PM
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Indeed! It's a nerve-wracking time for Boeing.

An old colleague of mine used to say "nothing beats knowing," and the way to get that done is to communicate relentlessly. That's a key to operational excellence.

 

Mr. Roques
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Re: Cost vs profit
Mr. Roques   2/28/2013 6:32:43 PM
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So it wasnt a design flaw? The batteries were simply badly constructed? Should they reinvent everything? Why couldnt they use conventional supplies?

Brian Fuller
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Re: Cost vs profit
Brian Fuller   3/1/2013 2:39:10 PM
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The last I read, one or more of the LiOn battery cells had shorted, but how the short occurred is unknown right now. 

 

ottova
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Easily predictable
ottova   3/1/2013 3:23:55 PM
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1 saves

 

While I'm sure Mr. Tang and Mr. Zimmerman wrote a wonderful case study, these problems were readily apparent much earlier than that.  In 2005 as a graduate student at USC, with many then current Boeing managers also students, I pilloried the notion that Boeing would be capable of executing both a revolutionary step forward in technological application AND a revolutionary step forward in the management processes of building a completely new airframe design.  It bore all the hallmarks of 'groupthink' among the Boeing employees; they could all parrot the marketing mantras they were being fed without using any form of common sense.  Almost the entire USC engineering faculty involved in the discussion along with several non-Boeing students privately agreed.  When I proffered huge odds and real money to see if Boeing employees were that delusional, not a one was willing to bet any portion of their paychecks on the ability of their company to then meet its ludicrous development milestones that existed at that date.  It spoke volumes.

Boeing planned to introduce dozens, if not more, of new variables into their production timelines with the assumption they would ALL collapse to zero.  Had they, it would've been akin to the odds of winning the lottery and Airbus would today be on life support.  Only the most self-delusional marketing or engineering hack could think that subcontracting a key section of the airframe, tail components, to an Italian company whose production labor force was controlled by the Communist Party of Italy, was not going to run into development problems given Boeing's largest customer is the US military.  This was just one, albeit a big one, of dozens of poorly thought out supply chain questions that Boeing just assumed would solve themselves like in the Hollywood entertainment production system they were trying to emulate.

Boeing's goal of diminishing the hub-and-spoke system is more than laudable and the 787 may still do that.  However, the supply chain problems and uncertain timelines were completely predictable and have and will continue to inflict damage on Boeing's stakeholders, its balance sheet and its competence reputation.

Brian Fuller
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Re: Easily predictable
Brian Fuller   3/1/2013 3:47:19 PM
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@Ottova, that's great insight and thank you for sharing. Have you ever seen any company try to do what Boeing did with success? 

I'd be interested to hear, whether you've seen that or whether this is just biting off WAY too much.

ottova
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Re: Easily predictable
ottova   3/1/2013 3:53:31 PM
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Never anything at this level of cost and complexity.

Brian Fuller
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Re: Easily predictable
Brian Fuller   3/2/2013 4:10:28 PM
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@ottova, this may be off base, but let me throw this out there:

At its heart, supply chain is about process and organization. Companies such as Amazon and Netflix created completely new businesses by thinking about process and organization in radically different ways. In other words they bit off more than most people would have chewed at the time. 

It may not be an Apples-to-apples comparison, but I'd argue that big leaps can occur. 

BTW, this is not to soft-pedal Boeing's challenges, because I agree with your take. 

 

 

ottova
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Re: Easily predictable
ottova   3/3/2013 6:08:40 AM
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Neither Amazon or Netflix had an established customer base that flew tens, if not hundreds of millions of customers, that had to be continually served nor were those organizations pushing off that much technology development on to others.  Those organizations basically came up with new software structures and used already existent logistics optimization networks to base their business plans.

Neither of these companies were faced with the immense burden of qualifying their new technologies with the FAA or global regulatory bodies around the planet.  Failure within their business model, a missed order or lost delivery, isn't remotely comparable to an airplane falling out of the air and killing its occupants.  The risk management scenarios were orders of magnitude in difference.  The analogy is poor.

Hardware and software are different things.  Boeing and its subcontractors needed to build all manner of complex interdependent hardware systems that had never been built in the past, certify them for functionality and safety (an open question at this point as to whether the regulators were even qualified to do it since they lacked as much knowledge as Boeing), and then deploy and maintain them globally in a timeline defined by people who were hoping/wishing these technological breakthroughs would happen according to a schedule they created.  You're own people later acknowledged that these weren't people capable of making such assessments accurately.

Big leaps can occur.  They just can't occur within the constraints/environment Boeing was and still is operating within.  The assumptions the model were built on were false and/or invalid.  The process couldn't be in control because no one knew what the process was or what the control limits were.

Brian Fuller
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Re: Easily predictable
Brian Fuller   3/3/2013 2:53:24 PM
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Sure, I understand the Boeing constraints. Let me ask the question more directly: given that big leaps can occur, have you seen any that are worth sharing? 

 

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