Case: The Boeing 767 Case

ABDELRAZIG,AMRO
OJUOLA,EMMANUEL
  
Case Background

• Boeing was one of America’s leading exporter and

sales leader of the airframe industry. It was founded
in 1916 by William E. Boeing , The company began
as a builder of military aircraft for use in World War
I.
• In 1969, Boeing assembled the New Airplane
Program (NAP) study group. Its goal was to review
the company's past experiences with each of its
major programs- the 707, 727, 737, and 747 so that
problems that occurred would not be repeated.
  
Case Background

• In August 1981 a special task force, reporting

directly to Thornton, was formed to determine
the best way of modifying the planes from the
three to two-person cockpits. Should the
changes be made during the production or
should the modification be made after
completion of production of the planes.
 Statement of the Problem

• What is the best way to modify the 30 planes

from three-person to two-person cockpits,
should the changes be made during the
production or after the production?
 Areas of Consideration
Human Resource and Development
• Boeing assembled its largest commercial airplane under a
single roof with a work force of 28,600 people it
employed thousands of scientists and engineers to
develop new technologies and production systems.
• The company had a distinct corporate identity; teamwork
was especially valued; employees are expected to be both
competent and capable of working as members of a team.
• Fewer people would be needed as time passed, and
staffing would be reduced over time
 Areas of Consideration
• Operations
• Boeing competed by selling families of planes; flexible
designs were essential since each new generation of
aircraft was created with several variations in mind,
made on the same base airframe concept.
• Boeing assembled the New Airplane Program (NAP)
study group. Its goal was to review the company's past
experiences with each of its major programs- the 707,
727, 737, and 747 so that problems that occurred
would not be repeated.
 Areas of Consideration

• Finance
• Approximately $100 million had already been spent on the 7X7; most of it
was related to the ongoing research and development.
• Costs could be estimated once the basic design was established using a
parametric estimating technique.

• Marketing
• Market Assessment consist of forecasting the airframe market by talking
directly with the major airlines to get their estimates of future needs.
information is then combined with econometric models to generate three
forecasts: optimistic, conservative and expected for each market segments.
Complete forecast was run annually and readjusted quarterly.
 Areas of Consideration

Business Development etc.

• Meeting schedules was a high priority for
managers. Master Phasing Plan was used, it
mapped out the entire development cycle.
Management visibility system was also used, it
was designed to surface problems before they
became serious enough to cause delays, thus
regular communication was encouraged
 Framework (SWOT)

• Strength
• The company employed thousands of scientist and engineers to develop new
technologies and production systems and solve design problems.
• Well established name; Boeing was one of the major players in commercial
aircraft manufacturing.
• Boeing outsourced some of its responsibility in manufacturing to its selected
partners thus reduced risks and up-front investment cost.
• Flexible and highly adaptable airplane designs to meet customer requirement.
• New Airplane Program (NAP) study group was formed to prevent past problems
from repeating.
• Complete annual forecasts which are readjusted quarterly.
• Well established program schedule which are reflected in Master Phasing Plan.
• Meetings were regularly held to discuss targets and issues and solutions.
 Framework (SWOT)
• Weakness
• Pricing practices; new planes were priced
based on the average cost of planes produced
instead of actual cost of production.
• Audit teams consists of their own people
instead of outside consultant
• Internal request for changes could disrupt the
schedule, budget and work flow.
 Framework (SWOT)

• Opportunities
• As one of the major players in commercial aircraft manufacturing, airline
companies will mostly likely prefer Boeing when acquiring planes.
• Federal Aviation Administration granted permission to build wide-bodied
aircraft with two-person cockpit thus improvements can be
implemented.
• Threats
• Potential delays from major suppliers could create a chain effect on their
production schedule.
• Other major players in commercial aircraft manufacturing.
• External request for changes could disrupt the schedule, budget and
work flow.
 Alternative Courses of Action

Completion of production and subsequent modification.

•Advantages:
•Learning curves and schedules during the assembly process won’t be disrupted.
•Special team skilled at parts removal, modification, and repair will be assigned.
•Airplane would be fully tested before modification, thus any problems identified
would be related to the installation on two-person cockpit.
•Disadvantages:
•Additional labor hours and fund would be needed.
•Potential loss of configuration.
•Adequate space will be needed to be able to carry this out.
 Alternative Courses of Action

• To outsource the modification process to another company.

• Advantages:
• Learning curves and schedules during the assembly process
won’t be disrupted.
• Reduced risk and labor cost.
• No additional space will be needed to be able to carry this out.
• Disadvantages:
• Additional workers would have to be added temporarily to
conduct test on the output, configuration, and performance of
the subcontract company.
 Recommendation

• We strongly recommend the modification during

production primarily because this will also be used
or adopted in the manufacture of the next
succeeding planes after these 30 planes, also these
would improve their learning capabilities.
Secondarily, no additional space will be needed to
be able to carry this out, configuration will remain
secure, all activities would be under normal
management procedure rather than a separate
program.
 Conclusion

• This report has identified that among the

approaches the modification during
production offers greater advantage and
should be adopted.