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

4 thoughts on “Boeing’s Great Supply Chain Mismanagement

  1. You pose many questions in regards to Boeing, I’ll try to tackle them!

    Do you believe that Boeing should take outsourcing needed for these increases in production into account?

    Boeing has created an incredible idea with the “Dreamliner”, however they are very behind in production and also have exceeded the budget. As such, outsourcing may prove to be beneficial for Boeing. They can outsource some of their costs and outsource some areas that they are currently struggling with. This might help speed along production and keep costs from skyrocketing even further.

    When using supply chain management to maximize shareholder value, should the ethics of outsourcing always be taken into account by managers?

    This is a great follow-up question. As I mentioned, I definitely think Boeing could benefit from outsourcing. However, they must always be aware of ethical dilemmas that could arise. Boeing should never sacrifice their moral compass to increase production or lower costs. As such, ethics should always be on a manager’s mind.

    Do you believe Boeing will be able to effectively manage their vast supply chain in filling the 824 orders for Dreamliners and Dreamlifters?

    Ideally, it would be a huge benefit if Boeing could effectively outsource some of their production. However, what we have already seen is that the Dreamliner is struggling. Adding more to their supply chain may not end up being the most effective thing. If it isn’t, Boeing will have to go back to the drawing board and see what else they can possibly do. It seems the Dreamliner was a huge task that Boeing may not be able to accomplish…

  2. I believe that Boeing should definitely outsource. While there is an ethical stigma that always goes along with outsourcing, it tends to do more positive than negative. As long as Boeing is aware of the working conditions overseas and maitains a strong hold, they will be fine. The argument that outsourcing takes away American jobs is so outdated now and isn’t even really heard any more. Boeing, from what it sounds like, will have to outsource in order to meet their high demand for the Dreamliners and Dreamlifters. It would increase the shareholder value because they would have a very profitable year and Boeing would also increase their reputation and develop more contracts with clients. They will meet their expectations and maintain their status as one of America’s top companies.

  3. Yes I believe that Boeing will be able to manage the outsourcing requirements in order to meet the increased Dreamliner’s demand. Although this project is the most outsourced one in Boeing history the importance of Boeing delivering what its customers want is mission critical. Boeing’s track record in introducing new models is an impressive one. Boeing might not get it right on its first try but it typically finds a way to make its products meet customers specifications. Taking this active approach to supply chain management will unable an effective take-off of the Dreamliner.

  4. I definitely agree with my classmates f1231sblackburn and f1223nmcnally in that Boeing should definitely outsource the new Dreamliner to its mass amount of manufactures. currently it cannot manage or keep up with the demand with many of its tasks and manufacturing handled in house, so if outsourcing can help the production along more effectively and quickly it is definitely a good solution. One concern I have however is since so many parts and assemblies are being outsourced, Boeing must have a firm quality control and assure the customers that there renown aircrafts meet the same standards that they uphold. furthermore, I believe that outsourcing for Boeing is a good idea because other companies have technologies and manufacturing methods that Boeing does not have and can produce better parts and products at a much faster rate.

    Im all for using outsourcing to maximize there shareholders value, however it can not affect product quality. Boeing is a multi-billion dollar corporation, im not too concerned that it would use sub-par or non reputable manufacturers, but there head managers must closely monitor there partner companies to assure that there is no lose ends and everything is taken care of to there highest potential.

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