...Boeing 787’s problems blamed on outsourcing, lack of oversight Issue Boeing 787’s problems including the battery issue blamed on excessive outsourcing and a lack of oversight which introduced the quality issue. Boeing contracted with 50 top tier-1 suppliers, which is a totally different approach than it used in the past. Rule When a company outsources most of its operations, they need to have a proper oversight in place to monitor their partners. In Boeing’s case they needed to vet their tier-2 and 3 subcontractors from quality and capability perspective. The oversight team should have been composed of multidisciplinary experts, especially the supply chain manager. Also when you outsource, you need to work with your internal employees proactively to assure their job security. Finally, be open and transparent with your customers and discuss the impact of the outsourcing. Analysis Boeing took very different approach with 787 program than its 737 program. They almost doubled the outsourcing strategy with 787 program. Supplier relationship was purely contract based in 737 program while in 787 program they made them strategic partners with tier-1 suppliers and their responsibility was to develop and produced a section of airplane while in 737 program they developed only parts. In 787 program they have only 50 tier-1 suppliers while in 737 program they have around thousand. Also the supplier contract is fixed price and penalty for delays in 737 program and in 787 it is risk-sharing...
Words: 486 - Pages: 2
...Executive summary: Outsourcing allows company to reduce their cost and gain a competitive advantage and this idea is strongly adopted by companies all over the world. Outsourcing is an agreement in which one company contracts-out a part of their existing internal activity to another company. Outsourcing benefits company because it maximizing company’s resources, more efficient output and make legal agreement for performance guarantees. Telstra is Australia’s leading telecommunications and information service company (telco). Telstra has been using BPO (Business Process Outsourcing) which creates substantial business across Asia, North America and Europe. For home country, owners earn cost & saving efficiency and diversity of intellectual talent, hence, government face unemployed labor force and manager loss their ability to control as the disadvantages. For the host country, employees improve their life standart and there are economic growth. But, there’s higher social gap and inflation for the host country. Nike is a major publicly traded sportswear and equipment supplier based in the United States. They outsourced Customers services, manufacturing, advertising, promotion, charity, and society impact. For the home country, it cut their cost and expand international market, hence, it also bring negative social impact and mislead reputation. For the host country, it make lower unemployment rate and financial & risk reduction. Meanwhile, market monopoly and legal/ethic...
Words: 1368 - Pages: 6
...Boeing 787 #3 Critics and not just union members were concerned with the massive amount of outsourcing that was occurring with the Boeing 787. It is debatable whether this criticism was fair since Boeing had its reasons to outsource so much of the 787’s work. These reasons include cost control, hopes to win orders from the countries in which they were outsourcing to, efficiency, and the difficult relations between Boeing and the labor unions. Critics were afraid of losing jobs are and knowing the fact that outsourcing technology is risky because the country where that work goes may copy your technology and expertise to use as its own. Critics claim outsourcing up to 70% of the work caused incompatibilities in design and execution. For example, the battery fires that caused emergency landings. Many companies outsource, but Boeing may have gone too far with the 787. Some say that their core competencies were outsourced and that is very risky. When they got these parts back and started assembly they did not fit properly. Boeing now agrees that it outsourced too much. When the Seattle area increased employment and brought work back in-house that was an acknowledgment that something might be wrong with the massive amount of outsourcing that occurred. Even though America is still employed the most engineers for the 787, they outsourced a major part of their design process to nine other countries. They clearly outsourced their main competitive advantage. Since then Boeing has spent...
Words: 306 - Pages: 2
...Abstract Global Communications (GC) was facing a major decline in revenue, profits and stock values and had to make serious upgrades in its business practices. GC had to determine a cost-effective way to ensure their company would survive. The solutions involved outsourcing jobs, laying off workers and offering new services as well as teaming up with a satellite provider. Although stakeholders realized without these changes, GC would not survive, it is found to be difficult for some long-term stakeholders. GC’s approach appeared to have personal and ethical conflicts as they failed to communicate with employees. GC has identified the problem, strategized with its stakeholders, implemented a plan and has set the process for reevaluation and changes, if necessary. GC has found other companies, in and outside its industry, to benchmark and has taken the best practices for issues similar to theirs and have used them to increase revenue, and forego any immediate outsourcing of call center jobs. However, GC has a communication problem, in that the union was never consulted or included in the decision to outsource positions. Whey they learn of the idea, the union is very upset as they worked very hard to have employees agree to a decrease in benefits previously. The union is outraged and states they will fight the newly devised plan for its members. Implementation of these changes would allow GC to lead the communications industry globally, while providing their small...
Words: 3533 - Pages: 15
...International Legal and Ethical Issues In the “Addressing Legal and Ethical Issues Simulation” a number of issues were addressed. The most complex issues were surrounding the proposed jurisdictions of the courts where legal disputes would be argued. The central issues were the time and expense involved in the resolution of potential disputes. At issue were the distance (time and expense) of litigating in US courts versus the immediacy of litigating in the courts of Candore. The enforceability of any judgment was questionable. In the opinion of the Team, non-binding arbitration subject to international law could be the best solution for this question. The recent acceptance of Candore into the WTO should encourage compliance with decisions made in non-binding arbitration and would expedite resolution in a timely and less expensive to both parties and in the event of continued disagreement the parties would have recourse in international law. The alliance between CadMex Pharma and Gentura has been a successful one and both companies have cross-licensing agreements for several other drugs and techniques. CadMex and after 5 years of doing business with Gentura is now facing a dilemma due to the change in political system in Candore a new government is now in place also the country is in the midst of an viral epidemic affecting more than 1% of the population, ViroBlax is a drug CadMex licensed Gentura to market is one of the drugs used in the treatment should CadMex allow Gentura...
Words: 2392 - Pages: 10
...Boeing Case Study Group 2 Embry Riddle Aeronautical University Question 1 The benefits of Boeing outsourcing are; cost in manufacturing 787 parts and labor, finding experts that make specific parts, and introducing the 787 to different countries expecting to increase sales. The risks of having different manufactures to make one plane include; delays in manufacturing parts, factories having to move or close, costs of resources in different parts of the world can fluctuate, and taxes and tariffs can change during the course of manufacturing. If the company can produce the 787 cheaper by outsourcing then, yes the benefits do outweigh the risk. However, from the scenario there are several drawbacks of the foreign companies and the risk is too high. Boeing should do the work themselves. Question 2 Boeing failed to ensure that the other nations brought onboard to manufacture certain components of their aircraft were properly set up and prepared to start manufacturing. Boeing should have had more oversight of Italy’s issues with building a factory and they should have required proof that Italy already had adequate property to build the factory. Boeing also should have verified that there would be no local government interference that would hinder the ability to meet delivery deadlines. The other issue was one of their suppliers, Vought, outsourced to a different nation. Boeing should have had a clause in their contract with Vought, stating that if they outsourced...
Words: 565 - Pages: 3
...Italian Quality: Campagnolo Bicycle Components Introduction Campagnolo is renowned for producing some of the most innovative, highest quality, and best performing bicycle components available today. They also provide a benchmark for original design as evidenced by winning the prestigious Compasso d’Oro award from the Associazone Design Italiano and has been recognized by the Wall Street Journal as one of the most prominent sports brands in the world. ‘This reputation has been earned not only through its countless racing successes, but also by virtue of the attention given to quality and to service that sets this company apart from all others.’ ("Focus," 2011, para. 6) Tullio Campagnolo, an amateur bicycle racer who was frustrated with current technology to change gearing on his bicycle, founded Campagnolo S.r.l in Vicenza, Italy in 1933. At the time, changing gears required the rider to dismount, remove the rear wheel and then flipping the rear wheel around so a different sized cog on the opposite side of rear wheel could be used, then reattach the wheel to the bicycle frame, and finally remount the bicycle and resume the race. This required tools and a bit of time off the bicycle to complete as derailleurs and quick releases had not yet been invented. Tullio Campagnolo spent three years designing, perfecting, and producing what has become one of the ubiquitous components on a modern bicycle – the quick release skewer. ‘The company soon expanded, focusing on the three...
Words: 2940 - Pages: 12
...should to first know outsourcing Definition: The practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual (encyclopedia, 2012) in business. Outsourcing is a practice which involves transferring parts of a company’s business processes to outside suppliers rather than completing it internally (Investopedia, 2013). It is the process of subcontracting a process, such as product design or manufacturing to a third party company (Venture Outsourcing, 2013). Outsourcing could be sub-divided into two which is off-shoring and home-shoring (home sourcing). Off shoring is moving business processes overseas in order to leverage opportunities such as cheap labour expenses, entrance into new markets, skilled labour and availability of resources (Sourcing Mag, 2003). Home shoring (home sourcing) on the other hand, is “the transfer of business processes to companies within the same country” (Brunelli, 2013). The form of outsourcing to be analysed in this report is off shoring because it is one of the effects of Globalization. Outsourcing became popular in the United states as at 1980s when critics began to raise eyebrows about it as they felt multi-national corporations (MNCs) where exporting a large portion of American jobs to other countries (handfield, 2006). Some MNCs that were popularly known and criticized for outsourcing were Boeing, AT&T, Coca-Cola...
Words: 2687 - Pages: 11
...Turbulence: Boeing and the State of American Workers and Managers This is a story as much about cutting costs, avoiding failure, and raising stock value as it is about how to treat employees, their role in business decisions, and the changing employment relationship. Over ten years, Boeing employees were surveyed and interviewed, monitoring the effect of major business decisions (new ‘teams’ culture, technology, increasing roles for women, etc…). The shift by top executives to a more single-minded and short-term focus on the financial bottom line created a sense among many blue and white-collar workers alike that they are expendable resources to be used and discarded according to the calculations of distant investors and financial gurus. Overall, the effects were not positive. Thousands of workers laid off, with thousands still employed left to do even more work than before. Major Takeaways Many factors collided to create the conditions that Boeing experienced in the 90’s. However, while some factors were out of Boeing’s control (the emergence of Airbus, increased shareholder pressure, deregulation, and changing culture), how they responded to these factors is the focus of the study. Major takeaways, with each summarized below, include: • Failure of top-down decisions (new systems, technology, ‘teams’) • Irresponsible implementation of layoffs • Changing employee loyalty Failure of Top-Down Decisions In the face of changing cultural, governmental...
Words: 1086 - Pages: 5
...Effects of Outsourcing Name Institution Effects of Outsourcing Abstract Outsourcing is the practice of assigning a firm's business progressions to an outside agency for the purpose of improving service quality, driving innovation, or developing benefits of lower labour costs (Burkholder. 2006). Intercontinental outsourcing occasionally known as offshoring is a significant facet of economic globalization. Since outsourcing hints to more specialization, it is anticipated to reduce production expenses and to raise productivity. This study uses micro data on American firms to investigate the effects of international and domestic outsourcing on the economy at large, jobs, the production quality and the its ethnic view in the United States. It is based on a unique survey on outsourcing covering the period 2001 to 2013 over a decade of study. The survey allows one to distinguish between domestic and international outsourcing and between outsourcing of core and support activities. This article will highlight the changes that have been observed since the initiation of the outsourcing practise to its impact on the areas of study in sub-topics. Introduction The conflict has been going on from at least the 1880s, when the first New England textile mills initiated moving its manufacturing process to the Carolinas. Whatever name it goes by be it runaway plants, outsourcing, global sourcing, offshoring workers and the public tends to have mixed fillings towards it, executives view it as...
Words: 2874 - Pages: 12
...Table of Contents………………………………………………………………………………………….…………………………………………..2 3. Executive Summary………………………………………………………………………………………….……………………………………… 3 4. Introduction……………………………………………………………………………………………………….………………………………………4 5. Aerospace Supply Chain Process………………………………………………………………………….…………………………………….5 6. Description of 5 stages………………………………………………………………………………………….…………………………………..6 7. Global Aerospace Supply Chain……………………………………………………………………………….…………………………………7 8. Sourcing in Aerospace Industry………………………………………………………………………………………………………………8-9 9. Need for Supply Chain in Aerospace Industry……………………………………………………………………………………..10-11 10. Major Aircraft components………………………………………………………………………………………………………………………12 11. Supply chain of Boeing components world wide………………………………………………………………………………………15 12. Criterion for adopting Supply Chain strategies…………………………………………………………………………………….17-18 13. Who does it?.......................................................................................................................................19-20 14. What technology enablers are used?.................................................................................................21-22 15. How well does it integrate?...................................................................................................................23 16. How innovative is it?...............................................................................................................
Words: 6892 - Pages: 28
...The Boeing 787 Experiment Joe Appleby Saint Leo University The Boeing 787 Experiment Many of the normality’s of our everyday are often go unthought-of of about what it took to make them a reality. Take flying for instances. Many of us, myself included step on or use an airplane to travel for leisure, to conduct day-to-day business, use for supply chain movement and never even think twice about what goes into making an aircraft. One of what is considered an elite aircraft manufacturing company; Boeing knows all too well what it takes to deliver a premier aircraft to service. Boeing did not arrive at this point easy as they found out when trying to launch their Boeing 787 aircraft. This essay will give a brief company profile of the Boeing Company and in addition the major problem the company experienced when launching its Boeing 787 aircraft and recommended solutions. The problematic area that will be highlighted is Boeings supply chain management, which caused Boeing to rethink its 787 strategy. The History of Boeing The history of Boeing began essentially with the vision of five men. William Edward Boeing, born in 1881 in Detroit, Mich., began building floatplanes near Seattle, Wash. Donald Wills Douglas, born in 1892 in New York, began building bombers and passenger transports in Santa Monica, Calif. James Smith McDonnell, born in 1899 in Denver, Colo., began building jet fighters in St. Louis, Mo. James Howard "Dutch" Kindelberger, born in 1895 in Wheeling...
Words: 2242 - Pages: 9
...Manufacturing Industry Analysis Manufacturing Industry Analysis Introduction Manufacturing industry refers to businesses that employ machines, tool, labors, chemical and biological processing to convert raw materials to finished goods on a relatively large scale. This industry makes up a sizable portion of the industrial production sector in developed nations. It also boosts the economic growth and creates jobs. In 2013, manufacturers contributed $2.8 trillion to the economy, up from $2.03 trillion in 2012. This was 12.5% of GDP. For every $1.00 spent in manufacturing, another $1.2 is added to the economy, the highest multiplier effect of any economic sector. Manufacturing promotes innovation, productivity and trade. Globally, manufacturing continues to grow. It now accounts for approximately 16% of global GDP and 14% of employment. The latest trend of manufacturing and industrial companies is that more and more of them are investing in emerging market to gain a foothold in future large market. Manufacturers expect about 40% of their global revenues to come from emerging market by 2017. General Environment Analysis General Environment Segment | Changes that may affect the industry | Level of Impact | Threat, Opportunity or Both? | What are companies in the industry doing about this trend? | Demographic | Education, sex, race | Moderate | Opportunity | More and more knowledgeable and skilled workers and expertise | Sociocultural | More women in workforceMore...
Words: 8727 - Pages: 35
...company profile as this will help you to understand where the company stands in the market place and the importance of how they handled the project. I hope you like airplanes, as it would help with enjoying this project. Introduction:- Boeing is the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Additionally, Boeing designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. As a major service provider to NASA, Boeing operates the Space Shuttle and International Space Station. Corporate Profile: 1. Boeing corporate office is located in Chicago, Illinois. 2. Boeing employs more than 158,000 people across the United States and in 70 countries 3. Manufactures commercial and military aircraft, designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. Boeing also operates the Space Shuttle and International Space Station. 4. Boeing outsource some of their manufacturing to national and foreign suppliers and assemble and manufacture in their Everett plant in Washington. 5. Boeing aggressively advertises its Commercial Airplanes' and run a special television add on Memorial Day to honor veterans. 6. A TV ad on Memorial Day as a reminder of their military involvement and advertise their commercial airplanes worldwide...
Words: 1356 - Pages: 6
...1) Introduction Globalisation of Production Many production activities are becoming global. Globalization of production refers to the dispersal of production to locations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service. This includes the sourcing of key production inputs (such as raw materials or products for assembly) as well as the international outsourcing of services. Example; India has nurtured a strong IT capacity, and has attracted global companies outsourcing IT and related services. India’s economic development has most often been compared with that of China, where export-oriented manufacturing industries have flourished, mostly in mass-produced goods, from textiles to standardized consumer electrical goods. Both countries offer location-specific advantages: China offers abundant cheap labour, and India, skilled labour for knowledge-intensive industries. However, each is looking to diversify, as India is broadening its policies to attract manufacturing FDI, and China is seeking to move up the value chain, to more high-tech activities. As the world’s two most populous countries, each with populations of over a billion, they are also, potentially, the world’s largest markets. Not surprisingly, therefore, many companies eye the market potential they offer, in addition to their location- specific advantages in production. Globalisation of Market Globalization of markets refers to convergence in buyer preferences...
Words: 386 - Pages: 2
