Last week the Seattle Times reported that due to two cases of battery malfunction, Boeing has indefinitely grounded the 787 Dreamliner. The Dreamliner has made the news many times before this, and not for the right reasons: its construction has been plagued by delays and technical challenges.
Some blame outsourcing as the cause of the battery issues, but doesn’t every manufacturer outsource at least some of its components, especially for a product as vast and complex as an airplane? What could Boeing have done differently?
While Boeing worked closely with its top 50 suppliers, those suppliers in turn outsourced to others, and Boeing lacked the capacity to oversee so many factories, or to even create detailed specifications for the outsourced products, according to the author of a paper presented to Boeing back in 2001. While Boeing beefed up supplier oversight in recent years, it may have already been too late.
While it costs time and money to work closely with suppliers, and overseeing their suppliers is often difficult, we can learn a great deal from Boeing’s very public experiences with the Dreamliner. Managing your entire supply chain including providing your suppliers with guidelines and expectations about managing their suppliers is critical for success. Is it worth the risk of long-term reputation damage to save money by outsourcing without proper oversight?
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Authors: Paige McKinney, Rick Pay