Boeing’s Great Supply Chain Mismanagement

Boeing gets grip on 787 supply chain with upsized jumbos

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According to Boeing officials and reports, they have begun to take back into organization their supply chain management. Their new hook on their global supply chain will increase production of their new, “Dreamliner” jets. On there other hand, there are many people who believe that this increase in production from new supply chain management will, “expose new supply bottlenecks” (Kelly, 1). Boeing has had past trouble with their deadlines on production. They have numerously delayed their scheduling because of management issues. Boeing has had, “difficulties managing 325 suppliers building parts for the 787 at 5000 factories worldwide” (Kelly, 3). Boeing plans to raise their carbon-composite jets per month by one and a half. This target increase in production is expected to be very difficult to achieve, but they believe it is possible. Jeffery Luckey, a supply chain management executive at Boeing, said, “We are currently on a path to achieve ten [per] month” (Kelly, 7). This jet’s production is the most outsourced in Boeing history. One company outside the US working on the jet is the Fuji Heavy Plant in Nagoyia. This plant is the sole supplier of a one-of-a-kind fuselage needed for the Boeing jet. Boeing’s planned production increases will increase strains on suppliers such as these creating new bottlenecks in the supply chain (Kelly, 8-9).

As we have learned from chapter 11, bottlenecks can be created when there is one process in the production that is essential to the product and can take a long period of time. Boeing is seeing new bottlenecks appear because of their increases in production scheduling. It is interesting to see how new supply chain management problems occur and what implications they can have on outsourcing and global supply. Boeing, if their production process is going to fit their production schedule, needs to manage the new bottlenecks that are going to occur because of their increased demand. They will have to take into account the abilities and capacities of their suppliers when making there forecasts, and release work orders at the adjusted rate from the bottleneck. One idea Boeing could look into would possibly be searching for methods to increase the capacity of their bottlenecks so that overall system capacity can increase. Moreover, changing production forecasts and changing supply chain management strategies will always require adaptations to resulting problems such as new bottlenecks, starving, or blockings.

Boeing has been increasing their production schedules because of increased demand for their 787 Dreamliner Jets. They are forecasting higher production rates despite possible bottleneck problems and other supply chain management issues. Do you believe that Boeing should take outsourcing needed for these increases in production into account? When using supply chain management to maximize shareholder value, should the ethics of outsourcing always been taken into account by managers? Do you believe Boeing will be able to effectively manage their vast supply chain in filling the 824 orders for Dreamliners and Dreamlifters?

Boeing Dreamliner Jet

Return to Sender: A Growing Liability

With the innovation in technology and services being offered by banks today it would be logical to think that the volume of physical mail being sent out will shrink substantially seeing a corresponding reduction in the amount of return mail.  However over the past year my Bank has been facing an issue of having to deal with huge amounts of returned bank statements.

There were various reasons as to why the statements were being returned; in this case it mostly attributed to a change in banking regulation-obliging banks to print statements to all deposit accounts where previously were only printed for specific accounts. With the unanticipated amounts of mail pouring in, it deemed essential to start to analyze all the different reasons to why the pieces returned and what is it costing us. What is the total operational cost of postage, printing, handling, research and re-mailing?  What about the value we lost with returned communications? The delayed or missed payments, unawareness of bank charges and the overall customer service expenses?

The bank has already approved a project to centralize, automate and monitor return mail operations. By having all statements to be printed with bar codes and returned back to a central operation that will be able to simply scan the bar codes and capture how many times the statement has returned, and to ultimately stop printing upon the third time.  We will also be able to capture all the problematic accounts and attempt to contact the customer in different methods in order to update their information and encourage them to use e-statements.

I have highlighted one small operation that possibly was not be seen to have a dramatic impact on the banks performance but it is a growing problem and may have a huge impact in the future with our customer base growing everyday. As Head of Customer Resolution I am able to see a lot of the operational and process issues we are facing with at the bank through customer complaints, and by taking this class it has stressed the importance of how reducing operations cost is the best method to optimize in an organization. I am also looking forward to learn the importance of managing quality, and conducting process redesigns and how they ultimately lead to improved efficiency, profitability and operational excellence.

This after all is my view, so do you think our Bank is on the right track with their cost management initiatives?