Aviation Qualtiy Systems

AERO2650

Assessment Task 2
Individual Essay: The troubled gestation and
entry into service of the Boeing 787-8
Dreamliner
SUBMITTED: Prof. Dr. Alberto Bernabeo
Student name: Duong Hoang Trong
Student ID: s3872865
Student email: s3872865@student.rmit.edu.au
Wordcount: 1498 words
Table of Contents
I. Introduction.........................................................................................................................................3
1. The story of the B787 Dreamliner...................................................................................................3
2. Quality Management Principles.......................................................................................................3
II. Main body...........................................................................................................................................5
Issue 1: Boeing was too ambitious for innovation.......................................................................................5
Link to the 7 QMPs:............................................................................................................................5
Solution and result...............................................................................................................................5
Issue 2: Terrible supply chain management.................................................................................................5
Link to the 7 QMPs.............................................................................................................................6
Solution and result...............................................................................................................................7
III. Conclusion.......................................................................................................................................7
IV. References.......................................................................................................................................8

Abbreviation

Word Meaning
B787 Boeing 787
B747 Boeing 747
QMPs Quality Management Principles
 I. Introduction
1. The story of the B787 Dreamliner
Being the replacement of the Sonic Cruiser due to the skyrocketing fuel price, B787 was born not only
base on the needs of the market but also from the vision of Boeing. With the code name “Dreamliner”, a
series of innovations is the first time equipped on the jet, Boeing proudly asserts this plane is the future,
the standard for the next-gen commercial aircraft (Norris, Thomas, Wagner and Forbes Smith, 2005).

Figure 1. Timeline of B787 Production. Source: Michel

However, the process did not carry out fluently. Designated dates for maiden flight and the first delivery
were constantly delayed by up to three and a half years (Denning, 2013). This is the consequence of
various problems starting right from Boeing’s own ambition. The supply chain management and a strike
of Boeing’s staff can be considered as the main issues leading to the delay of the project which will be
carefully discussed in this essay.
In some way, Boeing has successfully produced the B787 following their expectation of specifications.
The plane is lighter, more fuel-efficient as well as more eco-friendly, and importantly it meets the needs
of the market (Singh, 2022). But for the manufacturer itself, Boeing’s net loss amounted to $5.5 billion for
B787 delivery only and up to now, the maker earn no profit from selling this plane (Gates, 2022).

2. Quality Management Principles

Quality management principles including a set of rules, norms, and values… are the foundation for
quality management. These principles have been proved as true and are the basis for ISO quality
standards, especially ISO 9001.

Quality management principle Simple Explain

1. Customer focus Understanding the needs of customers, creating
more value to attract customers and keep
 customer confidence.
Consistent unity of goals and direction throughout
2. Leadership the organization and consensus of everyone to
reach the set goals.
Related to manpower: competent, enthusiastic
3. Engagement of people empowered staff facilitate the achieving quality
objectives.
An action has inter-related processes.
Establishing these processes so that they are
4. Process approach
integrated and become a consistent system will
help to achieve the quality goals.
5. Improvement Room for improvement.
Make decisions based on careful analysis and
6. Evidence-based decision making
evaluation of data.
The importance of managing the relationship with
7. Relationship management
interested parties, and stakeholders.

The priority of principles is different depending on the applied organization. It also may change over time
and ISO is responsible for updating it (ISO 2015).
 II. Main body
Issue 1: Boeing was too ambitious for innovation
The huge motivation driving the B787 comes from three sources: the change in the market after the 9/11
event; the harsh competition with Airbus and finally the Boeing Yellowstone project aiming to replace
entire civil aircraft with next-gen aircraft (Pike, 2022). So, Boeing decided to go all the way in innovation,
introducing many new applications like composite materials, new batteries, engines, electrical systems,
etc.
As a result, it requires not only a large investment including costs, manpower, time, etc but also is the
cause of a series of problems later. Moreover, from the theoretical design to the actual assembly, there
were flaws, such as the weight of the aircraft being heavier than expected leading to problems with range
and capacity (Norris, Thomas, Wagner and Forbes Smith, 2005).

Link to the 7 QMPs:

 Leadership
Boeing’s purpose was right, but, the direction to achieve the goals has a problem. The decision to
simultaneously equip a series of new technologies on the B787 was not appropriate. Because the world is
still not ready for these technologies, they are too new and not yet put into practice. Meanwhile, Boeing
has scrapped old but proven methods and technologies that have been profitable for Boeing for years
(Pierce, 2022).

Solution and result

Boeing decided to outsource more than 70% of the B787 production mostly to their suppliers as a solution
to reduce the cost and time of development (Denning, 2013). This move made the situation even worse,
there are total 8 times of delays, with a huge loss in money, and this is the reason for the next quality
issue (Sid, 2022).

Issue 2: Terrible supply chain management

Logically, with many innovations, Boeing needs to involve more in development and manufacturing.
Surprisingly, they did not do that, instead, they assign the responsibility for most of the engineering and
manufacturing to their suppliers, or sub-contractors.
The problem is that the sub-contractors do not have enough knowledge and skill to adapt to the
requirements of Boeing. So it took time for the sub-contractors to research and manufacture. Even when
sub-contractors successfully manufacture Boeing’s order, it still cannot be assembled since the parts from
different sub-contractors are either not fit together or not qualified enough (Tang, Zimmerman and Nelson,
2009). As a result, the project is delayed, and the delivery date is changed at least 7 times causing billions
of dollars over budget. Moreover, the profit from the project is shited up-ward to the suppliers, not
Boeing.
Figure 2. Information about parts of the B787. Source: Michel.

Not long after, a strike broke out, for various reasons but mainly job security due to excessive
outsourcing. 27,000 mechanics took part in a strike that lasted more than 2 months which made the
situation worse: more delay, more compensation money (Klass, 2022).

Link to the 7 QMPs

 Relationship management
There is a problem between Boeing and the suppliers. Previous Boeing models like B747 use around 35-
50% of outsourcing due to the need for expertise in some fields. But B787’s outsourcing is due to
reducing the required cost and time. Boeing thinks they can manipulate the entire supply chain to work
for them. 50 suppliers from different countries around the world somehow become Boeing’s departments
which take full responsibility for building the aircraft. Boeing is no longer the owner of the project,
instead, the fate of B787 now belongs to the suppliers (Pierce, 2022).
A strike by 27,000 Boeing mechanics revealed problems in the relationship between Boeing and its
employees that led to the strike taking up to eight weeks to reach an agreement between the two sides.
 Evidence-based decision making
The problems when outsourcing the majority of the aircraft’s production have shown that this decision
was not based on the data about the competence and abilities of suppliers causing delays and additional
costs. Moreover, Boeing does not seem to take into account that the company is now dominated by its
suppliers. Not only profits and staff, but also Boeing’s knowledge and expertise are shared and transferred
to suppliers (Denning, 2013).
 Process approach
The parts manufactured from different suppliers are not fit properly during assembly, indicating a lack of
understanding between inter-related processes and involved parties. Boeing is the one starting this project,
they should have better plans and approaches for stakeholders.
 Leadership
There was a huge mistake in the leadership of Boeing. Boeing’s core business is the engineering and
manufacturing of aircraft and they give that essential job to outsiders. Boeing is somehow trying to mimic
Airbus, but the basic difference is that Boeing is just an American company while Airbus is a European
multinational corporation. A company can outsource non-core businesses like graphic design, website
management, etc. But outsourcing the areas where the company’s most competent are is a disaster (Pierce,
2022).

 Engagement of people
In the event of the labor strike, Boeing show that they did not consider the factor of employees in the
outsourcing decision, creating concern about job security. As a result, it directly leads to the longest strike
against Boeing since 1995 (Denning, 2013).
All the above information raises a question: where is the quality manager of Boeing? They are experts
and they should foresee all the risks like core business or organizational brain drain and stop it right from
the beginning. The lack of preventive methods has shown that either Boeing’s quality managers were
inexperienced or were not involved in the project planning (Denning, 2013).

Solution and result

When things went wrong, Boeing was forced to send hundreds of employees to their supplier’s factories
around the world. They nearly redesigned the entire aircraft and the assembly processes. Moreover, to
regain control of the B787 project, Boeing was forced to buy Vought Aircraft Industries which is
Boeing’s supplier (Tang, Zimmerman and Nelson, 2009).
To resolve the labor strike, Boeing increased employees’ salaries by 15% within 4 years and commit to
limiting outsourced production to ensure job security (Tang, Zimmerman and Nelson, 2009).
These mandatory actions saved the b787 project, however, Boeing had to pay a huge price, not only in
terms of money and reputation but also in terms of manufacturing secrets and expertise being exposed.

III. Conclusion
In conclusion, the story of the B787 originates from Boeing's big ambition, they have the vision and grasp
the trend. But they were too hasty in implementation, leading to a violation of 2 quality management
principles: leadership and decision marking. However, the main cause of Boeing's series of problems was
terrible supply chain management. Many quality management principles have been neglected or violated
such as engagement of people, relationships, etc. The plane is still technically successful, it still fulfills
Boeing’s vision for a next-gen aircraft. But the B787 was a financial failure and will always be a typical
example of how important the application of quality management principles in the manufacturing of a
new aircraft is.
IV. References
 Denning, S., 2013. Boeing's offshoring woes: seven lessons every CEO must learn. Strategy &
Leadership, [online] 41(3), pp.29-35. Available at:
<https://www-proquest-com.ezproxy.lib.rmit.edu.au/docview/1355303716?pq-
origsite=primo&accountid=13552> [Accessed 22 July 2022].
 ISO (International Organization for Standardization) (2015) Quality Management Principles,
ISBN 978-92-67-10650-2, accessed 27 July 2022.
https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100080.pdf
 Denning, S., 2013. What went wrong at Boeing. Strategy &amp; Leadership, [online] 41(3), pp.36-41.
Available at: <https://www-emerald-com.ezproxy.lib.rmit.edu.au/insight/content/doi/
10.1108/10878571311323208/full/pdf?title=what-went-wrong-at-boeing> [Accessed 27 July 2022].
 Gates, D., 2022. Boeing & Aerospace. [online] Boeing reports net loss in 2021 as cost of 787 delivery halt
soars to $5.5 billion. Available at: <https://www.seattletimes.com/business/boeing-aerospace/boeing-
reports-a-net-loss-in-2021-as-the-cost-of-the-787-delivery-halt-soars-to-5-5-billion/> [Accessed 1 August
2022].
 Klass, T., 2022. The Associated Press: Boeing strike likely to run into November at least. [online]
Web.archive.org. Available at:
<https://web.archive.org/web/20081018205633/http://ap.google.com/article/
ALeqM5jRDk_jig_rWglPcX78lw5vKlRjSAD93QI5Q00> [Accessed 15 July 2022].
 Norris, G., Thomas, G., Wagner, M. and Forbes Smith, C., 2005. Boeing 787 dreamliner -- flying
redefined. Perth, Australia: Aerospace Technical Publications International.
 Pierce, F., 2022. The Boeing 787 Dreamliner: A tale of TERRIBLE supply chain management. [online]
Supply Chain. Available at: <https://supplychaindigital.com/digital-supply-chain/boeing-787-dreamliner-
tale-terrible-supply-chain-management> [Accessed 1 August 2022].
 Pike, J., 2022. Boeing 77. [online] Globalsecurity.org. Available at:
<https://www.globalsecurity.org/military/systems/aircraft/civil-boeing-yellowstone.htm> [Accessed 1
August 2022].
 Sid, B., 2022. Development of Boeing 787 (Dreamliner) — Inceptone. [online] Inceptone. Available at:
<http://www.inceptone.com/posts/projects/aerospace/boeing-787> [Accessed 1 August 2022].
 Tang, C., Zimmerman, J. and Nelson, J., 2009. Managing New Product Development and Supply Chain
Risks: The Boeing 787 Case. Supply Chain Forum: An International Journal, [online] 10(2), pp.74-86.
Available at: <https://aquadoc.typepad.com/files/boeing-787-case.pdf>.