Business Execution Lessons learned from Boeing 787 delays

July 1, 2009

The new Boeing 787 is the first commercial aircraft planned to be designed completely by computer (no prototype), the first aircraft that relies on composite (non-metal) materials for all the flight surfaces,  and that relies on a broad strategy of outsourcing the manufacturing of key components with Boeing only doing final assembly and test.   The program is some 2 years behind schedule with schedule slippages continuing.  Some much for sound business execution.

The plane currently has structural issues related to securing the wings of the plane to the fuselage.  Additional mounting points are needed to provide sufficient structural integrity. There is no revised program schedule available at present.

While Boeing claims that it may have been possible to commence test flights prior to remediating the structural issues, the company is taking the right approach in delaying the first test flight until Engineers are confident.

Imagine the impact of having one or more wings fall off during a test flight!  Is there anyone who thinks that Boeing’s customers and future passengers would be willing to say, “Oh, it’s okay–they’ve implemented a design change now to correct that defect–the wings should be okay.”

Today, the Wall Street Journal reports in an article called “Boeing Is in Talks to Buy Operations of a Major Supplier,” discusses how Boeing is in negotiations to purchase a critical part of their supply chain to improve business execution.  Is this something Boeing should have outsourced?  Or, is this a competency that needed to be developed and refined before it could be outsourced?

It’s impossible to outsource a design of this complexity that’s never been successfully built even once.  The design engineers and the production engineers need to work side-by-side to understand how the design elements come together as a “system.”

While the schedule didn’t call for building a prototype, the first unit is a prototype regardless of whether it is identified as such in the schedule or not.  It is the first time all the design elements come together as a aircraft expected to take flight.

Many years ago, I had a client who was creating a precision, high-end electro-mechanical hardware product employing state of the art technology.  I recall the purchasing agent calling the engineers to inform them that their prototype parts had arrived as each part individually came in.

To my amazement, each engineer said “thanks” and never went back to the receiving area to marvel at actually seeing their design manifest before their eyes.  Why?  They had “seen it” in the computer-aided engineering system–they just “knew” it would be okay.   Did the 787 engineers feel the same way?  Did they just “know” it would be okay?

This same client liked designing innovative systems but really didn’t want to ramp up a manufacturing organization.  So, the design was transitioned to an outsource manufacturer before a prototype system had ever been built until it became very clear that the “system” couldn’t come together as a system–there were too many issues in every area of the design for the product to work as a system.  The system was brought back in-house to complete the design and system integration work which took many months. Many months and a boat load of cash were consumed before revenues could be realized for this challenging design.

What are a few key lessons from the 787 program?

  • While it would be wonderful if you could design a plane from the comfort of your office,  it’s ludicrous to plan for this.  Seeing is believing.
  • If you can’t build one complete system (in this case, a 787) and make it work as designed, what would make you think your outsource suppliers can do it?
  • A computer system will never be able to reveal everything that an actual prototype build will show.  It is silly to schedule a program with no allowance for a prototype system.
  • The first “system” you build is a prototype, whether you call it that or not.  It is normal and reasonable to expect significant design tweaks will be needed to finalize the design.   Boeing and its 787 customers are learning this costly lesson.
  • Boeing may have outsourced what was really a core competency key to the 787 success–fuselage manufacturing.

Boeing’s only competitor, Airbus, is certainly in the news in recent weeks, and, it’s not the kind of press a company wants.  There are questions about the total design strategy that, frankly, makes me reluctant to fly on an Airbus anywhere.  Fortunately, American Airlines and Alaska Airlines don’t rely on Airbus and I hope it stays that way!

Boeing must get this 787 design right.  I applaud them for doing the right thing and delaying the program to get this design right!  But, I’m concerned that Boeing’s business execution has been pretty poor for issues that should have been anticipated by the program team.

What do you think?

Dave Gardner Gardner & Associates Consulting