Boeing 787 Business Execution Failure

Note: This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive!

This week’s focus: business execution

The grounding of the Boeing 787s due to the fire danger associated with the lithium-ion batteries continues to be a costly, brand-damaging problem. The U.S. Secretary of Transportation, Ray LaHood, announced at the time of the grounding that these aircraft would not fly again until they are “1,000 percent safe.” [A bit of hyperbole in that statement, Mr. Secretary?]

Boeing wants to get the fleet back in the air as quickly as possible and keep production and deliveries moving. The solution they have offered the Federal Aviation Administration (FAA): a better fire containment box and improved venting for the lithium-ion batteries so if and when a fire occurs, it can be contained to the battery unit itself.

Is Boeing nuts? The answer is better fire suppression? Wrong answer, Boeing!

The right answer is a design that eliminates the risk of fire that has been thoroughly tested, qualified and implemented in each 787 before each plane is allowed to return to the skies. You know it, the FAA knows it, the airlines with 787s know it, and so does the flying public.

At an Association for Corporate Growth Silicon Valley chapter dinner meeting this past week, I moderated a panel called “Transportation of the Future.” I was honored to have Dr. Sujeet Kumar, CTO and co-founder of Envia Systems on the panel to discuss lithium-ion battery technology. He told the audience that the 787 lithium-ion battery is built using the wrong chemistry and is an inappropriate design prone to the very problems Boeing and its customers have experienced. The good news: Technology is available today to eliminate the risk. The bad news: It’s not apparent Boeing is looking for solutions outside its current design.

Boeing: Fix the problem the right way and restore our confidence in your brand and your wonderful 787 aircraft that the airline industry needs.

Thought for the week:

“To me, business isn’t about wearing suits or pleasing stockholders. It’s about being true to yourself, your ideas and focusing on the essentials.” – Sir Richard Branson

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What do you think? I welcome your blog comments!

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Fast Company Blog Posts That May Interest You

• How Dell Helps Entrepreneurs Get Hardware Solutions To Market
• Why Dell Decided To Go Private
• What Decisions Your Business Really Needs To Make About the Cloud

 

Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2013 Gardner & Associates Consulting  All Rights Reserved

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FAA Review of 787 Is An Illusion

Ray LaHood, the head of the U.S. Government’s Department of Transportation, declared the the Boeing 787 is safe to fly. Yet, in the same press event, LaHood announced that the Federal Aviation Administration (FAA) will conduct a complete safety review of the 787 to reassess the electrical systems and production process/quality control. This action is unprecedented.

The FAA doesn’t have the expertise to lead or devise a definitive plan to execute this effort. Given the complexity of the plane and the task, it could take several years before a FAA reassessment plan could be designed and implemented unless Boeing is really going to lead this effort. I suspect the FAA will participate in a safety review but will not lead the effort as has been advanced.

Doesn’t Boeing have the most to gain or lose from the current problems being reported? Boeing must have an extreme sense of urgency to understand and initiate corrective action for any and all of the problems that have surfaced that represent potential threats to the airworthiness of the aircraft.

One can only imagine the setback a catastrophic failure of a 787 would represent for Boeing and the airline industry which is counting on this product to increase efficiencies airlines face serving a global marketplace.

A Japan Airlines 787 had to abort a trip from Boston to Japan due to a fuel leak in a fuel nozzle.  CNN reports that the plane was later flown back to Japan for a more thorough examination. Personally, I would have flown it to Boeing in Seattle or South Carolina for that examination rather than half-way around the world. But, that’s just me.

A final thought: I’m not sure I want Ray LaHood to be a cheerleader for Boeing and the airworthiness of the Boeing 787.  The effort to certify a plane is extensive and exhaustive–I wrote about it in Fast Company. The FAA has already invested some 200,000 hours in the original certification process. But, the sample size for certification is limited.  It is certainly reasonable that supply chain complexities and design or producibility issues will surface as production is ramped up. Realistically, though, the burden is on Boeing.  The FAA can provide oversight, but, let’s not kid ourselves: the oversight is limited.

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

Southwest Airlines Boeing 737 Florida One Under Construction

This is an amazing video.  I’ve seen these plane fuselages traveling by train though Montana on their way to the state of Washington for final assembly.  Enjoy!

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

Boeing 787 Certified by FAA-Lessons Learned

The Boeing 787 was certified for commercial use by the U.S. Federal Aviation Administration (FAA) on Friday, August 26th. That means the design has been put through the paces. Over 4000 exacting, discrete tests were required to be successfully passed for the FAA to certify the aircraft design.

The 787 is the first commercial aircraft with the body and wings made largely of lightweight, carbon-composite materials instead of aluminum. The expectation is that this lighter plane will consume 20% less fuel than a comparable aircraft design.

The program hasn’t been without its problems: The certification is about 3 years behind the original schedule, and cost overruns are estimated to be in the billions of dollars.

Boeing executives refused to discuss when the 787 program will be profitable. Right now, there are orders for roughly 850 planes.

Boeing decided to take a different path to bringing this aircraft to the marketplace, employing global design and supply chain resources. For one, there would be no prototype mockup built–this aircraft would be designed completely by computer. Engineering design would be distributed globally, increasing the risk that it would be difficult to collaborate and coordinate all the design elements. And finally, there would be a global supply chain that needed to be developed–787 final assembly and testing would occur in the U.S.

Most of the 787 program delay is attributed to a decentralized, global engineering strategy and a complex supply chain involving some 50 partners. These partners have had to make substantial investments in tooling and inventory under the provision that they would receive no compensation for their efforts until each aircraft is sold. The delays have to have been excruciatingly painful for Boeing’s partners.

Boeing’s CEO Jim McNerney said in a speech back on November 11, 2010:

“In retrospect, our 787 game plan may have been overly ambitious, incorporating too many firsts at once–in the application of new technologies, in revolutionary design-and-build processes, and in increasing global sourcing of engineering and manufacturing content.”

Boeing’s ultimate success in employing this global design and supply chain strategy will likely impact future aircraft design as Boeing and Airbus seek to push the risk and cost to global partners.

Let’s not forget a key aspect of this whole process. While we can applaud Boeing for getting this aircraft certified, the delays have had a significant impact on airlines determining when they can incorporate these new aircraft into their fleets.

Current estimates are that Boeing has the capacity to begin delivering ten 787 aircraft per month in 2013. Will the order backlog hold up? At present rates, it would take about 7 to 8 years to build out the current order backlog of 850 aircraft. With the projected savings available from the 787, the order backlog should increase as airlines see the opportunity to increase their fuel efficiency and modernize their fleets.

Boeing has a significant challenge ahead. We celebrate the milestone! Now, Boeing–get to work!

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2011 Dave Gardner

Boeing and Manufacturer of Southwest’s Florida One

This is a wonderful video depicting the manufacturing of a Boeing 737 for Southwest Airlines:

I hope you enjoyed that as much as I did!

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

Boeing and Airbus in 2009

I’m certain the Boeing and Airbus sales departments are thrilled that 2009 finally ended.

The Associated Press reports on 07JAN10 that Boeing’s new 2009 aircraft orders were 142 (about 1/10th the number of orders back in 2007) while Airbus received about 194 new orders.

Boeing delivered 481 commercial aircraft during 2009 and Airbus is expected to announce that it shipped 437 new aircraft.

Boeing’s total backlog is about 3,375 aircraft.  I don’t have the figures for Airbus at this point.

Healthy backlogs will help these companies weather these challenging, global economic times.  I expect many additional orders will be pushed out as the airline industry struggles with weak demand, lower profits and the effect of the recent terror attempt on Northwest Flight 253 over the Christmas holidays.

Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

Wayward NWA Pilots and Business Execution

While I’m sure the 2 pilots who were apparently too busy paying attention to their laptops to pay attention to flying an Airbus A320 this past week and flew by the Minneapolis-St. Paul airport by 150 miles have serious regrets about their actions, their behavior is reprehensible.

The FAA has suspended their licenses and Delta has committed that they will be terminated for their actions.  It is hard to argue for anything less.

These gentlemen were out of contact with controllers for 78 minutes.  Due to their lack of response, there was a real concern that the plane may have been hijacked.  Even the White House was alerted to this transgression while the event was in progress.

When I fly United, I always listen to the cockpit radio communications.  If you have not listened to it before, a pilot would be hard pressed to not have to communicate every 10 or 15 minutes along a route and much, much more on departure from and on approach to an airport. Air traffic control is constantly making slight route or altitude adjustments, handing off from one control center to another, etc.

78 minutes is an absolute eternity to not be paying attention while flying over US air space.

While I feel badly for anyone who loses a job and for their families, these pilots exposed themselves and their passengers to extraordinary risk.  They deserve to lose their jobs.

That said, these 2 knuckleheads would likely never again be so cavalier again in flight management.  Perhaps another airline should give them another chance (assuming the FAA will license them to fly again).  They are seasoned veterans who made a horrible business execution error.

What do you think?

Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

Business Execution Lessons learned from Boeing 787 delays

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

http://www.gardnerandassoc.com