Running head: BOEING’S PRODUCTION AND MANAGEMENT ISSUES
Boeing’s Production and Management Issues
Boeing’s Production and Management Issues
In considering how the global aviation industry employs more than 1.2 million people and has a total annual net worth of $800 billion, the decision to focus on production and management issues causing failures during the manufacturing process at Boeing illustrates how organizations should improve decision-making processes by emphasizing where customers and suppliers influence value creation (Timmis, 2020). As presented in the following analysis, production and management issues caused by failures in managerial decision-making have longterm implications for ensuring that companies like Boeing maintain their strong competitive advantage. Notwithstanding how Boeing experienced production issues when manufacturing its 737 model, the organization reportedly did not learn from mistakes when managers prioritized innovation and labor outsourcing over quality control. While some of these issues produced disastrous consequences, the attention they receive here should present valuable lessons on why product development will require managers to improve supplier relations in the future.
As a leading global aeronautical and aerospace manufacturer, Boeing has an extensive history of successes making the organization a major competitor in the aviation industry. However, Boeing is not immune to the influence of external forces influencing production and management decisions. In the early 1970s, for example, Boeing experienced sharp declines in the production of military equipment after historical events like the Vietnam War, the Apollo
Space project, and an economic recession led the company to incur large debts after building its 747 aircraft (Petrescu et al., 2017). Production delays accumulated after Boeing already received orders for more than one year before engine problems caused further issues. Congress also stopped financing projects that involved Boeing constructing a supersonic jet to compete with the Concorde and effectively interrupted the project (Petrescu et al., 2017; Timmis, 2020). Despite these early production and management issues, Boeing launched its first 737 passenger aircraft model in 1983 after the economy started to gradually recover. Increased competition in the aviation industry, particularly from Airbus, led Boeing to construct this model and forced the company to develop new models—e.g., the 757 and 767 corridors—while maintaining its involvement in space projects (Petrescu et al., 2017; Pisarek, 2017). While Boeing competed with Airbus, the 737 model remained popular as the company joined alliances with Lockheed Martin, the largest military contractor, to manufacture aircraft.
In the mid-2000s, Boeing launched its B787 aircraft model to considerable success. By the end of 2005, Boeing confirmed 291 orders to include 88 purchasing intentions by 27 companies (Petrescu et al., 2017). Production was set to begin in 2007, while planned service entry was scheduled for 2008. At this time, Boeing had more than 245,000 employees in the
United States and became the world’s largest aircraft manufacturer in 2006. Two years later,
Boeing was the global leader in manufacturing aircraft models for defense organizations (Petrescu et al., 2017). When Boeing launched its 787 Dreamliner model in 2011, the aviation industry observed remarkable advantages associated with constructing more fuel-efficient jets. Accordingly, Boeing adopted a supply redesign strategy to lower development costs and market the new model to compete with Airbus (Ganji et al., 2017a, 2017b; Pisarek, 2017). The new product development (NPD) process granted Boeing several advantages for managing the competition against Airbus. A value creation strategy also provided Boeing with the reassurance that airlines and passengers would take advantage of benefits like cost-effectiveness, reduced fuel consumption, and less noise pollution (Ganji et al., 2017a). However, supply chain management (SCM) issues created several project management (PM) and sustainability issues.
Integration challenges were apparent when Boeing aimed to consolidate global value chains. While the company attempted to address these challenges by visiting the locations of different partners involved in the 787 Dreamliner project, stakeholders understood that redesigning supply chains would increase visibility across global networks.
However, production and operations management failures contri