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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Boeing Debacle: Seven Lessons Every CEO Must Learn (Offshoring Issues)
The grounding an unusual action for a new plane focuses on one of the more risky design choices made by Boeing, namely to make extensive use of lithium ion batteries aboard its airplanes for the first time, write Christopher Drew, Jad Mouawad and Matthew Wald in the New York Times: The 787s problems could jeopardize one of its major features, its ability to fly long distances at a cheaper cost The maker of the 787s batteries, Japans GS Yuasa, has declined to comment on the problems so far.
What was Boeing thinking when they opted to embrace such extensive offshoring? Moser believes the error lay in using the wrong measure of the impact of offshoring on earnings. Many companies that offshored manufacturing didnt really do the math, Harry Moser, an MIT-trained engineer and founder of the Reshoring Initiative told me. A study the consulting company, Archstone, showed that 60 percent of offshoring decisions used only rudimentary cost calculations, maybe just price or labor costs rather than something holistic like total cost. Most of the true risks and cost of offshoring were hidden.
http://www.forbes.com/sites/stevedenning/2013/01/17/the-boeing-debacle-seven-lessons-every-ceo-must-learn/
In sum, Boeing management began licking their chops at the lower labor costs and totally ignored all other real and potential costs/risks that offshoring brings as well. Now, their planes are getting grounded and they are losing a ton of money all because they didn't want to pay their workers a decent wage.
Yavin4
(35,354 posts)uponit7771
(90,225 posts)...and outside of that people who are dedicated to the project for a while....that aint happening with off-shoring.
An airliner would be just if not more complicated than a large scale processing system.
godai
(2,902 posts)Did Boeing use the 'you scratch my back, I scratch yours' technique?
amandabeech
(9,893 posts)had a lot to do with commitments to purchase the finished airliner.
Stupid. Stupid. Stupid.
bhikkhu
(10,708 posts)...realizing that they were creating far more problems than they were solving with their "distributed manufacturing" model. It takes a very long time to undo a bad decision of that scale!
Blue_Tires
(55,445 posts)The real issue is the 787 is so technologically advanced -- There's literally nothing else like it, so outsourcing to a bunch of suppliers who only knew the 'conventional' paradigm was doomed to failure...
Boeing should have kept as much of the 787 in-house as possible...
JPZenger
(6,819 posts)Civilian and military aircraft manufacturers often distribute parts of their manufacturing to other countries to get orders, not because it is necessarily cheaper.
It is much easier to get a country to spend billions on your aircraft if they know some of their citizens will be making parts of it.
amandabeech
(9,893 posts)That's what the article is about.
Maybe that's why some military aircraft have problems. Aren't there still problems with the latest AF and Navy planes? Are the parts for these planes being manufactured by every ally we have; i.e. half the world?
I hope that the DOD looks closely at what went wrong with the 787.
LisaLynne
(14,554 posts)they are offended by payroll expenses. They can't see past the money that they are paying people to work for them and seem willing to do ANYTHING in order to lower that cost. They seem to forget that actually, no, good employees are not as interchangeable and disposable as they would like to believe and that their business actually DOES depend on the people doing the work. It's a good investment to treat your workers well. Maybe someday this idiots will figure it out.