What organizational structure would you suggest to effectively tie in Boeing’s managersand suppliers abroad? Sketch your ideas. (Goals for managers might include facilitatingteams, coordinating efforts, maintaining organizational transparency, and creatingconversations.)
Attachments:Boeing Dreamliner: Engineering Nightmare or Organizational Disaster?
As a flight of imagination, Boeing’s 787 Dreamliner was an excellent idea: made of composite
materials, the plane would be lightweight enough to significantly reduce fuel cost while
maintaining a passenger load up to 290 seats. Airline carriers chose options from a long list of
unprecedented luxuries to entice the flying public and placed their orders well ahead of the
expected completion dates. And then the problem started.
An airplane like the 787 has a design about as complex as that of a nuclear power plant, and the
Boeing’s equally complex offshore organizational structure didn’t help the execution. Boeing
outsources 67 percent of its manufacturing and many of its engineering functions. While the
official assembly site is in Everett, Washington, parts were manufactured at 100 supplier sites in
countries across the globe, and some of those suppliers subcontracted piecework to other firms.
Because the outsourcing plan allowed vendors to develop their own blueprints, language barriers
became a problem back in Washington as workers struggled to understand multilingual assembly
instructions. When components didn’t fit together properly, the fixes needed along the supply
chain and with engineering were almost impossible to implement. The first aircraft left the runway
on a test flight in 2009, but Boeing had to buy one of the suppliers a year later (cost: $1 billion) to
help make the planes. The first customer delivery was still years away.
If Boeing and industry watchers thought its troubles were over when the first order was delivered
to All Nippon Airways, (ANA) in 2011, 3 years behind schedule and after at least seven
manufacturing delays, they were wrong. Besides the continuing woes of remaining behind
schedule, Boeing’s Dreamliner suffered numerous mechanical problems. After the plane’s
technologically advanced lithium-ion batteries started fire on one aircraft and forced another into
an emergency landing in January 2013, ANA and Japan Airlines grounded their fleets. The FAA
followed suit, grounding all 787s in the United States. The remaining 50 flying Dreamliners
worldwide were then confined to the tarmac until a solution could be found.
This looked like an organizational structure problem, both at corporate headquarters and abroad.
However, there have been so many management changes during the 787’s history that it would
be difficult for anyone to identify responsibility for errors in order to make changes in the team or
the organizational structure. For the work done abroad, restructuring reporting relationships in
favor of smaller spans of control to heightens management accountability and tie suppliers to the
organizational structure of corporate Boeing could be considered. Or “reshoring” to bring
manufacturing physically close to the final assembly site and under Boeings control while
centralizing the organizational structure could be an option.
1. What organizational structure would you suggest to effectively tie in Boeing’s managers
and suppliers abroad? Sketch your ideas. (Goals for managers might include facilitating
teams, coordinating efforts, maintaining organizational transparency, and creating
conversations.) – 50 points.