Date: 04/08/2010

Group Assignment for Operations

Management-1

Analysis on The Boeing 767: from Concept to

Production (A)

Phases of change management:

The issue in hand is the case of Change Management. The flexibility to
incorporate changes is the key attribute of a project. The approach to change
management can be:

Incorporating changes into the current production flow

Finishing the job in current production flow and then incorporate the

changes
Expediting changes by assigning additional workers ("blue streak").

Management Visibility system can be used to manage schedule of this

change management process:

Weekly marathon (stand-up) status meetings held by representatives

of affected departments to review slippages and highlight potential
problems.

Industry Overview:
Airplane industry is one of the most capital intensive and schedule intensive
industry with large lead times from concept to production. Meeting the
deadlines and maintaining quality is paramount to the players operating in
this industry. Production and assembly costs are very high and transportation
of component parts required for final assembly is also very crucial. To
minimize costs, effective use of technology is required. Also, the makers try
to roll out as many derivatives of the parent product from the same assembly
line as possible. This helps in reduction in costs and also optimizes the
learning curve as workers do not have to learn many new things as the
machines and line remain the same.
The development process is very extensive, thorough and detailed at Boeing.
From selection of team to design and then assembly and eventually rolling
out is carried out with utmost care and precision. Every stage has a well

defined process and procedures to ensure timely and flawless delivery of

product.

The two options for the change management in BOEING 767 cockpit
crew configuration
Completion of production and subsequent modification
Production to continue as planned and the modification program would be
conducted as a separated activity later.
Advantages:

Production would not be delay. Because modification was separated

from normal flow of production, all other production would be

continued as planned as well as learning curves.

Functional tests could be done as originally planned. Because the tests
were done during the final assembly process, problems would be

identified and corrected on the spot.

Problems could be concentrated. Because every step was as normal
procedure except installation of the two-person cockpit, we could

isolate problems to the cockpit area.

Cheaper Approximately one million additional labor hours were
required.

Disadvantages:

Parts needed to be removed after firmly installed, because modification

would be done after completion of production, parts for three-person
cockpit would be installed firmly in places as the procedure, but during

the modification, and some of them must be removed and replaced.

Operation systems might be disrupted, if the modification was not
done carefully.

Space problem. Not enough room within the factory to modify all thirty
planes. Special parking plan, special fire control plans and waivers
would be deployed.

Modification during production

All modification would be done during production rather than after
production.
Advantages:

All parts were installed only once. Because there would be no

installation and subsequent removal, all parts could be installed firmly.

All activities would be controlled by normal procedures, because

Modification would occur during production.

All the parts associated would be identified and their installation would
be discontinued and later steps in assembly would be carried out.

Disadvantages:

Original plan would be disrupted

Learning curves would be disrupted.
Expensive. Approximately two million additional labor hours
Problems might not be detected and corrected immediately because
functional testing would have to be done after the two- person cockpit
was fully installed.

Conclusion:

Factors to be considered:
1. Safety: In this industry safety is the primary concern. Since the second
approach might not detect and correct problems immediately, we feel
that the first option is preferable to second one. By not delaying the
trials and subsequent certifications from FAA, Boeing would have more
reaction time in case any of the existing components has any
anomalies.
2. Since one of the customers has ordered for 3-crew-cockpit design and
retained his decision to procure the same. The size of this order is not
given in the data and the implication of shifting the order of the first
few planes by United Airlines to this player is not clear.
3. The man-hours required for doing the changes later are half of what is
required for modifying the current production flow.
4. It will also make sense to complete scheduled production of the 30
planes with 3-crew-cockpit design as it will ensure better control on
one of only two possible airplane configurations, rather than the many
configurations that would have resulted if changes were incorporated
on different airplanes at different stages of production.
5. We can also Blue Steak the retrofitting process, where additional
workforce can be employed for expediting the changes.
6. Boeing had plans for incorporating the plan for 2 person cockpit since
inception of design and it would be feasible to bring this change to
existing configuration. The learning curve is designed such that every
subsequent aircraft takes lesser time and changes in the production
will hamper this. This also suggests taking the post production change
approach.

*To avoid slowing or interrupting the FAA certification process, Boeing chose
to build the first 30 airplanes as fully functional (and certifiable) airplanes
under the expected FAA certification for the three-crew model.
(*As per data taken from Boeing website)