Is The “Dreamliner” Still a Dream?

Finally, “after months of headaches brought on by its 787 Dreamliner jet, Boeing Company is now back on track and even speeding up the production rate of the new airliner.”

This is fantastic news for the Dreamliner program being that starting from January 16th until late April of this year, all of the Boeing 787s had been grounded due to some safety concerns with the plane’s lithium-ion battery system. The influential aerospace company has stated that they have since increased the jet production rate to seven airplanes per month at one of its factories in Everett, Washington, and claims that the Dreamliner program is set to reach a further increase to ten per month by the end of the year.

Before the grounding, Boeing had delivered fifty of the Dreamliner planes to eight different airlines worldwide, including United Airlines, which is the only U.S. carrier that operates 787s currently. Today the Dreamliner program has more than 800 unfulfilled orders to 58 customers worldwide. Hence, the immediate need for Boeing to fix the jet’s design flaws and production challenges they were facing. The Federal Aviation Administration grounded Boeing’s newest and most technologically advanced jetliner until the risk of battery fires was resolved. During the time of the grounding order, Boeing had not been allowed to deliver any new 787 Dreamliner’s but continued building them. The company had to seriously look at the jet program’s operations and reevaluate some of their critical decisions.

The final assembly of the Dreamliner’s takes place at the Everett facility, but the bulk of the jet’s large components come from numerous suppliers around the world so the time putting these planes together is influenced heavily on the getting the parts in quickly. “There are about 50 suppliers in California alone.” But the major production slowdown was due to Boeing having to redesign the 787’s battery system due to some overheating incidents that had occurred. One incident even resulted in a fire.

Although “Boeing will not say how much redesigning, testing, and retrofitting the battery system has cost the company,” officials have stated that the cost was absorbed into spending $705 million in research and development during Boeing’s first quarter. The three-month grounding period of the Dreamliner created a 2.5% downturn in revenue for the company, which came out to be around $18.9 billion. Despite all the production troubles Boeing has encountered recently, the company now firmly states it is back on track to deliver more than 60 of the planes during this year as originally planned. But the question is whether the Dreamliner will now stick in the pubic’s mind as a troubled aircraft?

In addition to the increased production of the Dreamliner jet, Boeing has also increased production of its 737 and 777 jets and is forecasting to deliver as many as 645 planes this year, making this a record for the company.

Which types of critical decisions did Boeing have to reevaluate? Do you think that the grounding of the Dreamliner will or has had any effect on the company or the plane’s reputation? Which types of forecasting methods do you think Boeing is using in regards to their production ability and what other factors does Boeing need to consider?

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6 thoughts on “Is The “Dreamliner” Still a Dream?

  1. I am happy to read this post as it has been interesting to follow the current Boeing Company gossip that has raided the news! It is interesting for me to get experience really understanding how operations management can truly affect a companies financial position, profitability, work flow, company image, etc.

    It still blows my mind that a seemingly small battery issue has held up production in such a large way. The Dreamliner has been delayed countless times and has cost the company a lot of money (not to mention the unseen things it has done to the company, like image or lawsuits potentially).

    This reminds me of the very first Puppet exercise that we did in the course in which there was a ‘bottleneck’ in the production process that really held up the overall time and then quality of the final product. Again, it is so interesting to see my experience with the puppet example on a truly huge corporation. Boeing definitely had to re-evaluate the critical decision including the safety features as inputs into the aircraft. The building time and process of this step definitely has been extended and will probably in the future as the media and regulators will have a skeptical eye on safety especially after the delay in production.

    Boeing Company, I am sure, uses very sophisticated forecasting techniques based on internal models by their corporate finance division. I would be interested, as you posed to us readers, what changes have been made to these models and their respective forecast. I am sure they have been reduced specifically in the short term, but I wonder if additional focus was placed on any the issues thad had seen recently.

    Great post!

  2. It is great to hear the way the company is handling the issue at hand. I was not informed on the fact that these critical decisions were being made by the company or that the planes were not longer flying. I do think that since some people are very skeptical about flying as it is, problem will really set them back and people will not be so easy to forget. When planes are not functioning and the problems are corrected people will always see those planes as having a problem. It is just the way the human race works, now all they can do is try to change that prospective or even maybe have to lower fairs in order to get people to take the chance. Something their operations management should be looking into is in the long run will they see themselves where they want to be.

  3. Finally something not Apple or Smartphone related! I really enjoyed reading this and liked that Boeing is making some changes. Battery technology is definitely making a move but it still seems to baffle engineers to come out with the next energy conserving/long lasting batteries. With new cars and new planes coming in the near future it will severely change the transportation world for the best. It seriously blows my mind everytime

  4. Even though Boeing has had many delays i think in respect to the consumer they feel safer because they are taking extra precaution. Boeing is not going to put something in the market that is defective. I think this would add to the value than take away. The bottleneck of the battery has created delays and cost the company a lot of money but when they put the product in the market they were sure it was safe. I think they should consider having multiple vendors for one product which will avoid the bottle neck and if something occurs they always have backup.

  5. Being a frequent flyer I’m definitely not sure how I feel about this company with everything that has been going on with the new 787s. For example, the airline that I take to Europe has been using the new 787s and I am pretty nervous about being put on this airplane. I hope the battery issue is resolved soon because my opinion on this company has been changing ever since the battery issue on this new airplane occurred.

  6. Considering that Boeing is the world’s leading aerospace company, I doubt that the incident with the batteries will have a lasting effect in the eyes of the public. As with any new technology, there are always problems when it is first introduced. With an effective marketing campaign, I believe everyone will want to ride the Dreamliner. After all, it burns 20% less fuel, has 20-45% more cargo space, and is able to travel at the same speed as smaller airplanes. The interior features wide isles, larger lavatories, and higher humidity. What’s not to like?

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