The Boeing 767: From Concept to production(A)

This case study deals with the dilemma faced by Dean Thornton, Vice president General
Manager of the Boeing 767 program. The company had lobbied the Federal Aviation
Administration (FAA) for permission to build wide-bodied aircraft with two-person cockpits
instead of a three-person cockpit. Permission was granted late and by the time thrity of those
planes were already in various stages of production. Thornton knew that the planes need to
be converted to models with two-person cockpits. Now,

 how should Thornton handle this situation?

 What are the options that he has?
 Which one would be the best method to proceed with?
The decision had to be made quickly as the delivery dates were fast approaching, and these
were not small changes. Commercial aircraft manufacturing posed large and costly
complexities. In 1981, three companies dominated the market being able to manage this
grand project cost: Boeing, McDonnell Douglas, and Airbus. Launching a new p challenging
task as the manufacturing required $1.5-2 billion, often placing a company's net worth on the
line. But, any successful product launch was expected to lead to heavy profits within the
market segment for at least 15 to 20 years. Buyers comprised mainly of the top 50 airlines,
negotiated on price, after-sales parts and service, design modifications, etc. to make the task
of successful design and production even tougher. Boeing was the industry leader partnered
with subcontractors on a rişk-sharing basis for manufacturing parts and subassemblies,
while the final assembly was done by Boeing. It later also started to offer varieties i structure
but just some carefully selected variations
 These were built on the same assembly line, r expertise in global marketing, technological
leadership, production skills and effective use of proje become the "low-cost producer" of the
industry. Two solutions were available to Thornton for cony cockpits – In-line and Offline
operations. For the in-line option, two-erew cockpits would installed removing them from the
flow of production, requiring unique design solutions for each airframe a curves.
Statement of the Problem 
During the manufacturing of Boeing 767, the cockpit design was planned for both a three-
crew and yet un-approved two-crew configuration. Already into the production process, the
Federal Aviation Administration madea late approval of the customer preferred two-crew
option, but thirty units had already undergone various stages of construction with the three-
crew design. A task force was convened to assess the feasibility of methods to complete the
production and delivery of all aircraft with two-crew configuration as scheduled without delay.
Dean Thornton, Boeing's 767 program vice president-general manager, had a dilemma to
choose the between the best of two options to make the changes in thirty mid-production
planes. Option A: Completion of production of the 30, three-crew cockpit models as initially
designed, later making necessary modification to two-crew configuration (Off-line) Option B:
Modification during production so that all planes are completed as two-crew models (In-line).
Background As the sales leader in airframe industry and one of America's leading exporters,
Boeing earned $5.1 billion from Commercial Airplane and $4.1 billion from other divisions-
missiles, rockets, helicopters, space equipment, computers, and electronics. 
Boeing emerged as the industry's "lowcost producer" by employing these strategies: O
Variations- Boeing manufactured various families of planes with several variations on the
same airframe based concept. It required flexible designs, inherent growth potential and
modifications capability, with no need for wholesale revisions O Expertise in global
marketing O Manufacturing Benefits- Manufacturing a common family of planes on a
common assembly line expediting the learning curve. This led to far-earlier break-even
points. O Technological leadership O Facilities- Huge centralized facilities were available
with sophisticated manufacturing systems and project management tools.
O Customer support O Production skills The culture of Boeing had a distinct identity as
characterized below:

 Teamwork and cooperation were valued in the organization.

 Cross-functional teamwork ensured in addressing the serious concerns of new plane
programs, which was a prime vehicle for management development.
 Autonomy was granted to teams but disciplined decision-making and detailed
plannifg were expected.
 Regular communication was encouraged to ensure prompt adaption and agility D
High priority was placed on meeting schedules.
 Realistic schedules were developed and monitored over time.