INTRODUCTION Many consider Boeing’s 787 Dreamliner an example of a failed project. Twenty-six billion dollars over budget, almost four years late, and several quality issues surround the innovative new aircraft (Ausick 2014). This paper explores Boeing’s approach of materializing the Dreamliner from a project management perspective by comparing the company’s undertakings with project management principles. Three factors define the success of any project; these are time, cost, and quality (Wysocki and RK 2013: 4). This paper identifies three main facets of project management that were inappropriately implemented, namely; Resourcing, Stakeholder Management, and Risk Management and how their improper implementation led to the violation of the three constraints (i.e. time, cost, and quality). The paper is divided into three sections, the first of which will establish a timeline of events. This project background will serve as a case study for the analysis in the following section that will be structured such that each of the previously mentioned facets will be independently analyzed and contrasted with project management principles. Finally the paper will conclude with a summary of the analysis and recommendations based on …show more content…
Seventy percent of the aircraft’s production and designing was outsourced to over fifty Tier 1 suppliers compared with only thirty-five to fifty percent that was traditionally outsourced in the production of other aircrafts (S. Tang and D.Zimmerman, 2009: 77). In late 2008, over twenty-seven thousand Boeing employees went on strike due to the company’s outsourcing policies and what its effects on job security (Doornbos n.d.). The strike lasted for fifty-seven days and it would cost Boeing a total of three months in production time, an estimated $100 million a day in revenue, and approximately $7 million a day in net income (Isidore
With the exceptional growth in technology, the present day projects are often large and complex involving a significant risk. So, a Project Management Methodology enables the delivery organization to handle these projects comprehensively, systematically and in an integrated manner, which results in strategic, tactical and operational benefits.
In the current business environment, the demand for project managers is ever growing. In short, project management is a provisional project constrained by time, cost and scope (A guide to the project management body of knowledge, 2013). Between the immense organization, optimization, and communication assets skilled project management brings to a project, it is easy to see why project management is a booming field of study. Furthermore, project management can be both financially and personally rewarding when long term milestones and goals come to fruition.
The Boeing Company purports to be one of the world’s largest and successful aerospace companies in existence. With a history encompassing a century’s experience it is no wonder why a claim so boastful can be made for this engineering colossus; “A Foundation of Innovation,” reads the title of Boeings corporate vision statement; this is the essential message the company provides to both its external and internal environment. Boeing industry leader in aerospace engineering and innovation. The company has successfully penetrated the market and continues to expand product lines and meet the needs of the consumer. Boeing has a broad range of capabilities that include creating new, more efficient commercial airplanes, integrating military platforms, defense systems, advanced technology solutions, and innovative customer-financing options.
Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements (PMBOK Guide, 2008). Using this definition, it is made evident that the parties involved in the Denver International Airport (DIA) Baggage System project in the 1990’s failed at applying basic organizational practices towards managing the triple constraint of scope, time, and cost goals. The combination of inherent risks, uncertainties, and dysfunctional decision making geared the project towards disappointment while simultaneously designating it as a text book example of what not do when taking on a complex project. By looking at the key strengths, weaknesses, opportunities, and threats we can
The plan calls for suppliers to ship mostly completed fuselage sections, already stuffed with wiring and other systems, to Boeing facilities around Seattle so they could be put together in as few as three days. Existing production methods can keep a plane the size of the Dreamliner in the final-assembly area for a month. But many of these handpicked suppliers, instead of using their own engineers to do the design work, farmed out this key task to even-smaller companies. Some of those ended up overloading themselves with work from multiple 787 suppliers, Boeing says. The company says it never intended for its suppliers to outsource key tasks such as engineering, but that the situation seemed manageable at the time. "We tended to say, 'They know how to run their businesses, '" says a Boeing executive familiar with the company 's thinking. "Now Boeing is hostage to the suppliers, and there 's very little they can do about it," says Tom Wroblewski, president in the Seattle region for the International Association of Machinists and Aerospace Workers, which was critical of all the outsourcing. Despite the start-up problems, Boeing and its suppliers still say they believe this new method of developing planes is the model for future projects. Once the production line is running smoothly, they argue, it will be more efficient and profitable than existing construction methods.
Boeing adopted the radical change approach for designing and developing the 787 Dreamliner not only to attempt to create new aircraft through the innovative design and advanced material, but it also drastically changed the production process. With a $10 billion dollar project in mind, the goal was to reduce the financial risks involved as well as the new product development cycle time. Meanwhile, Boeing produced a remarkably complicated supply chain that included greater than fifty partners in over 100 locations all across the globe. In addition to the complicated supply chain, they experimented with various firms in diverse areas to align complementary skill sets. Furthermore, this was the first time the company outsourced the two most crucial parts of the plane, the wings and the fuselage.
1.1 In developing the Boeing 787 Dreamliner, Boeing executive management’s initial decisions and project management strategies did not control the four major measurements of project success: time, budget, performance and client acceptance (Pinto, 2013, pp. 35,36). This report analyses the methodology and project management decisions that led to a project crisis and risk to Boeing’s reputation.
This paper analyzes the goals and actions of Boeing by analyzing its critical success factors as well as its strategic roadmap.
Boeing is currently operating with the majority market share of the commercial sector of aircraft manufacturing. Frank Shrontz, our CEO, has recently stated his goal to increase the company’s return on equity from its current average of 12%. The following summary will delve into the most appealing project for the future of this firm: the 777 aircraft. The purpose of this new product is to maintain our competitive advantage in commercial airline production by completing a family of Boeing airplanes. The following net present value analysis will be used to determine the potential profitability of the 777 project.
As the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security system, Boeing puts a lot of efforts and innovations in its products and services. These include commercial and military aircraft, satellites, weapons, electronic information and communication systems, and performance-based logistics and training.
This study will investigate how project stakeholders are managed. The aim of this chapter is to introduce the study and key elements that will be considered throughout this dissertation. It provides study’s background information, problem statement, aim and objectives, scope and limitation as well as study relevance and values. Finally, this section also provides dissertation outline adopted by the author.
As the largest aerospace company in the world, the Boeing Company employees more than 153,000 people in some 67 countries. The great dominance of Boeing is due to its 1997 merger with McDonnell Douglas Corporation, an aerospace manufacturer, and its 1996 purchase of the defense and space units of Rockwell International Corporation, an aerospace contractor. The corporation is the world’s number one maker of commercial jetliners and military aircraft with more than 9,000 commercial planes in service worldwide, including the 717 through 777 families of jets
What is a company to do if it has a vision of changing the way manufacturing of their products are done, in order to satisfy new innovations? This is the type of question Boeing had to answer when they launched there Dreamliner project. This project began early in 2003 when they released the first image concept of this future design project. Executives originally aimed to have this plane on the market by 2008. Unfortunately, due to the nature of this project it was delayed several years as Boeing started to suffer from problems in there supply chain (Boeing – history link). These problems mostly arose because they were going into unchartered territory. Early planning of the project determined that outsourcing various aspects would allow Boeing to stay highly cost effective in this large endeavor; this decision was necessary for this project but it did not turn out as cost effective as they originally planned. This story tells some great lessons on the importance of managing processes, which includes the supply chain. In my opinion, Boeing could’ve done better at planning there Dreamliner project; starting with managing the supply chain and using their own know-how to properly advance their production processes.
In order to achieve their business objective, project management and the used methodology are key factor which will be responsible for the success or failure of this project.
In a world growing more dynamic and challenging, individuals and institutions seek new ways to adapt to the changing times. One specific solution in this sense is represented by project management. The concept is often associated with the business community, where the projects are business related, but its application in real life is far wider. Particularly, project management is an integrant part of how we organize our personal and professional actions and it impacts every aspect of our lives.