In For Boeing, it not only represented the

In 2004, The Boeing Company Commercial Airplanes
division changed the aerospace market by introducing its newest airplane, the
787 Dreamliner.  Boeing leadership
referred to it as a “Game Changer” and as it was in many aspects.  For Boeing, it not only represented the
future of the commercial airplane market, but its newest airplane in over a
decade.   The 787 was ahead of its time
in many ways. First, it utilized new technologies and had a revolutionary new
design that incorporated a wing and primary structure that was over 50 percent carbon
fiber reinforced plastic (CFRP) materials. 
This resulted in a lighter, more fuel-efficient airplane that promised
passengers a more pleasant flying experience and airlines lower operating
costs. The commercial airplane market had wanted this kind of technological
leap for years as evidenced by its record orders discussed below.  Secondly, Boeing increased its reliance on
outsourcing to other companies. Nearly 50 Worldwide supplier/partners have some
type of design, manufacturing or supply responsibility for the 787.  Thirdly, In July 2011 Boeing tested fate and
made history by announcing it would manufacture and deliver 787’s in its new
facility in Charleston South Carolina. 
It became the only commercial airplane company to build and deliver
airplanes at multiple sites.  The
announcement sent huge political waves and widened an already divisive cultural
gap with the nearly 50,000 International Association of Machinist (IAM) union,
in Washington State and political law makers.

 

Statement of the Problem

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In 1996, Phil Condit, Boeings newest Chief
Executive Officer (CEO), presented a new and radical vision for The Boeing
Company.  The 2016 Vision;
as it was called, represented an entirely new direction: ‘People working
together as a global enterprise for aerospace leadership’ (The Boeing Company,
press release, 1998).  To become more of
a globally minded company, Condit identified three major competencies that
Boeing would pursue, large-scale
systems integration being one. To the aerospace community,
this meant Boeing was transforming its identity from a complete airplane
designer and manufacturer, which it had been in the past, into a master
planner, marketer and end-item assembler in the advanced age of aerospace and
business (Newhouse, 2007). 8 years and countless issues later, Boeing announced
the 787 airplane (The Boeing Company, press release, 2002), a super-efficient
plane that could fly as fast as any commercial airplanes, a major breakthrough
for the aviation industry (Kotha and Nolan, 2005).

*Insert advances*

A few years prior, in 2000, Airbus
announced the commercial launch of the A380 super-jumbo, and by 2003 Airbus
succeeded Boeing as the world’s largest builder of commercial airplanes for the
first time (Taylor, 2003). Boeing had its proverbial back against the wall and
had to make a large and difficult decision on the future path of the
company.  Given such concerns, the
flawless execution of the 787 program was a competitive necessity

Since the introduction of
the 787 Dreamliner, the aircraft manufacturing industry has become a globally-centric
industry that is more heavily reliant upon global suppliers and
manufactures.  The cohesion of suppliers
and partners with Boeing was paramount with implementing sound lean
manufacturing principals, quality design and repeatable processes that promote
a Just in Time (JIT) supply stream. Billions of dollars and countless working
partnerships were forged in the development and delivery of the 787.  The 787 was born out of the global market
need for efficiency and the idea of a point-to-point theory of airline
operations as opposed to hub and spoke operations. **Insert Tier 1 suppliers**

  Airbus, Boeings fiercest and only main
competitor in the twin isle market offered its answer, the A320NEO. The need to increase production
rates and import a quality product from suppliers and partners has never been
greater with the 1000+ backlog of 787’s on order.  The program has been plagued by numerous
production and delivery delays all the while wearing on patiently waiting
customers.    

.    Due to the increased pressure to deliver
airplanes and constant competition with rival airplane maker Airbus, the 787
program experienced increased airplane production rates requiring on time
delivery by suppliers.  In December 2014,
the first delivery of a Boeing 787 Dreamliner to American Airlines slipped into
fiscal year 2015 because of late seat delivery to the final assembly location.  The following January, the seat supplier
claimed the situation had improved, but the difficulties facing its seats
business were lasting longer than expected and would impact its fiscal
first-half results (Hepher & Scott 2015). 

  **INSERT
DELIVERY ISSUES CHART**

In little over a year, the production line in Everett
had increased rate production from 5 airplanes per month to 10 with future
ramp-ups coming to keep up with the growing backlog of orders.  The lack of a complete airplane build prior
to production milestones and delayed delivery by suppliers had substantial cost
impacts to the program.   Late deliveries
caused significant disruptions to the company’s production schedule.  Unsuitable options faced management to catch
up on the delay: it would imply paying staff for overtime, paying a premium for
faster shipping, or to deliver the end product late. The first two options
decreased net profit margins and the third negatively impacted customer
satisfaction and future orders (Sourcing Decisions’ 2015). 

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