Boeing 787 Case Discussion Suri Gurumurthi Ph.D World Econ ✓ Solved

Boeing 787 Case Discussion Suri Gurumurthi, Ph.D. World economy

Discuss the development, challenges, and implications of the Boeing 787 program, including supply chain design, market potential, and the company’s strategic decisions in addressing delays and issues throughout the program's timeline.

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The Boeing 787 Dreamliner, also known as the Dreamliner, is a revolutionary aircraft that marked a new era in aviation with its introduction of advanced technology and manufacturing processes. Since its launch, the Boeing 787 program has undergone significant challenges and successes, leading to vital insights into global supply chain management, market demand, and operational efficiencies.

Development of Boeing 787

The Boeing 787's development began in the early 2000s, designed to meet a growing demand for long-haul, fuel-efficient aircraft. The airplane features a composite structure, with approximately 50% of its construction utilizing lightweight composite materials. This design aims to improve fuel efficiency and reduce emissions, which are critical factors in today’s environmentally conscious market (Boeing, 2020).

Supply Chain Design and Global Collaboration

Boeing adopted a unique supply chain strategy involving over 600 global suppliers, with 70-80% of its work outsourced. This approach divided the aircraft's production across multiple countries, resulting in significant cost savings and reduced assembly times (Gurumurthi, 2020). However, it also posed challenges regarding quality control, integration, and timely assembly of components. The company utilized various supply chain models, including “build to print” and “build to spec,” each carrying different risks relating to innovation and intellectual property (Gurumurthi, 2020).

Challenges Faced by the 787 Program

The program faced numerous challenges, including significant delays in delivery schedules. Initially forecasted for first delivery in 2008, several issues, including fuselage assembly problems and supplier coordination, pushed this date to 2011. Quality control issues were rampant as certain parts, such as the center wing box and fuselage components, required redesigns to meet safety standards (Gurumurthi, 2020). Furthermore, the dependence on suppliers led to vulnerabilities in the manufacturing process, as seen with the performance of Global Aeronautica (Boeing, 2020).

Market Potential and Financial Implications

Despite these setbacks, the Boeing 787 program carried immense market potential. Analysts predicted significant growth in civil aviation, with the Asia-Pacific region projected to be a robust market with an expected demand for over 5,400 aircraft (Gurumurthi, 2020). The financial implications are stark; a profit margin indicative of increased demand and increased operational efficiency could lead to a potential profit of $37.5 billion if operational costs are managed effectively (Gurumurthi, 2020).

Strategic Adjustments and Future Considerations

In response to delays and challenges, Boeing is increasingly in-sourcing work to regain control over its quality assurance and integration processes. Management acknowledged that the lack of detailed planning, assuming suppliers would handle assembly complexities, was a significant misstep, leading to inefficiencies in production (Gurumurthi, 2020). Moving forward, Boeing plans to balance its supply chain by shifting specific tasks back in-house while maintaining strategic partnerships that enhance its capabilities without jeopardizing oversight.

Conclusion

The Boeing 787 Dreamliner program exemplifies modern aviation’s challenges in supply chain management, innovation, and market dynamics. By learning from its experiences, Boeing can refine its strategies to not only produce advanced aircraft but also ensure operational resilience and quality control in future projects.

References

• Boeing. (2020). 787 Dreamliner. Retrieved from https://www.boeing.com/commercial/787/
• Gurumurthi, S. (2020). Boeing 787 Case Discussion.
• International Air Transport Association. (2020). Passenger Demand Recovery. Retrieved from https://www.iata.org/en/pressroom/2020/releases/2020-10-06-01/
• Federal Aviation Administration. (2020). Aircraft Certification. Retrieved from https://www.faa.gov/aircraft/
• Air Transport World. (2019). Boeing 787: A decade of design. Retrieved from https://atwonline.com
• Market Research Future. (2020). Global Aircraft Market Analysis. Retrieved from https://www.marketresearchfuture.com/reports/aircraft-market-1019
• Flight Global. (2020). A look back at Boeing 787's development. Retrieved from https://www.flightglobal.com/
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• Business Insider. (2020). The Boeing 787 challenges. Retrieved from https://www.businessinsider.com/