1.

Highlight the pros and cons of the production model followed by Boeing prior
to the 787 project. 

Pros:
Outsource more
By outsourcing over 70% of the development and production activities under the 787
program, Boeing can reduce the development time by utilizing suppliers' capacity to
foster various parts all the while. Likewise, Boeing might decrease the expense for the
development of the 787 by taking advantage of Component Before 787 Program 787 Program
suppliers' knowhow. As Boeing outsource more,
Sourcing 35% to 50% 70%
correspondence and coordination among Boeing strategy

and its suppliers became essential for the Supplier relation Contract based Strategic partnership
with tier 1 suppliers
success of the 787-development program.
No. of suppliers 1000s Approx. 50 tier 1
Reduce direct supply base, delegate more, and supplier
focus more
To decrease development time and cost for the Supply contract Fix-price & LD Risk sharing

Dreamliner, Boeing encouraged strong

Assembly time 30 days for Boing for final 3 days
associations with around 50 level-1 supplier who testing

will plan and fabricate different parts of the plane

and transport them to Boeing. By decreasing its immediate supplier base, Boeing could
concentrate a more significant attention on working with level-1 suppliers instead of with
raw material procurement and early component subassembly.

Reduce financial risks

Boeing initiated another risk-sharing agreement Under Supplier 1
the 787 program. Key suppliers won't get contractual
payment until Boeing launches its first 787 to client. Supplier 2
This agreement payment term was expected to boost
key partners to facilitate and work together on their Boing Final
Supplier 3
Assembly
improvement plans. Although this agreement forces
specific financial risks for Boeing's essential suppliers Supplier 4
if delivery times are missed, they are boosted by being
permitted to claim their intellectual property right (IPR), Supplier 1000
which would then be licensed to different organizations
later on.
Increase production capacity without incurring additional costs Tier 1 Tier 2
Decentralizing the assembling system would
Supplier 1
permit Boeing outsource noncritical proce sses.
The aim was to reduce the capital cost for the Supplier 2
improvement program for 787. Likewise, under Fabricator 1
Supplier 3
the 787-production network, Boeing needs just Pre-assembly
2
three days to collect finish areas of the
Boing final Supplier 4
Dreamliner at its plant. Comparative with the assembly
Supplier
737 SC, this intense decrease in process Erector 3
1000
duration would, like this, increment Boeing's
Fabricator 50
production capacity without causing additional
investments.

Cons:
Supply Risks
Boeing depends on its level 1 worldwide strategic partners to create and assemble
whole segments of the Dreamliner dependent on unproven technology. Any break in the
SC network can create enormous setbacks for the launch.

Process Risks
The basic plan of the 787-production network is likely going to create huge setbacks
since its efficiency depends on the synchronized just-in-time deliveries of all major
sections from Boeing's tier-1 strategic partners. On the off chance that the
transportation of a segment is deferred, the delivery schedule of the entire airplane is
postponed. Likewise, under the risk sharing agreement, the strategic partners won't get
compensated until the principal finished plane is certified for flight.

Management Risks
As Boeing utilized an unconventional SC Network to create and fabricate its Dreamliner,
Boeing needs to assemble a leadership team that includes some members who have a
proven supply chain management record with expertise to prevent and anticipate
certain risks as well as to develop contingency plans to mitigate the impact of different
types of risks.

Labor Risks
As Boeing expanded its outsourcing effort, Boeing laborers became anxious about their
professional stability. Their interests brought about a strike by more than 25,000 Boeing
representatives in September 2008. Boeing's strategic partners additionally felt the
impacts of the labor strike. This reduced work schedule could potentially delay the
delivery schedule of certain fuselage parts for the 787 (Rigby & Hepher, 2008).

Demand Risks
As Boeing reported a progression of postponements, a few clients lost their trust in
Boeing's airplane development capability. In response to Boeing's production and
delivery delays and the uncertainty around 787's drawn-out facility, a few clients have
started dropping requests for the Dreamliner or relocating towards renting contracts
instead of buying the plane out and out.
 2. Critically examine if the 787 delays and cost overruns are more teething
troubles adapting to the new production model.

By inspecting the inherent risks related to Boeing's SC network and investigating

Boeing's receptive moderation methodologies introduced before, we have fostered the
accompanying experiences that different makers might think about while dealing with
their supply chains for professional new item advancement.

Assembling a Leadership Team with Requisite Expertise

By all accounts, apparently, Boeing's principal issue was brought about by its endeavors
to take on an excessive number of unprecedented changes all the while. These
progressions incorporate unproven innovation, flighty SC chains, problematic suppliers'
ability to take on new jobs and obligations, and dubious IT coordination frameworks.

Obtaining Internal Support Proactively

Organizations among the executives and work are fundamental for organizations to
carry out new drives, including new item improvement programs. Even though their
advantages are frequently skewed, better correspondence of business methodologies
with association laborers is a proactive advance towards keeping away from expensive
specialist strikes. Additionally, adjusting the motivations for the two players proactively
is bound to diminish possible inner disturbances not too far off.

Improving Supply Chain Visibility to Facilitate Coordination and Collaboration

Other than the need to perform due diligence in crucial supplier performance to
guarantee that the chosen supplier has the inherent ability and the responsibility for
progress, an organization should consider developing more great responsibility in return
for exact data instantly. Excessively depending on IT system is profoundly risky while
dealing with another task. To relieve the risks brought about by partners further
upstream or downstream, organizations should acquire the total permeability of the
whole production network.

Proactive Management of Customer Expectation and Perception

Because of the inherent risks of new airplane development, an organization should
proactively help its clients set appropriate assumptions, particularly regarding the
potential delay brought about by different sorts of risk. Setting fair assumptions at the
beginning would diminish potential client dissatisfaction not too far off.
 3. Explore the possibility of Boeing’s failure to handle the culturally
diverse partners in its 787 supply chain

To work with cooperation and coordination with supplier’s, Boing developed an online
software instrument named Exostar to acquire SCM, further develop control and
incorporation of basic business processes, and lessen development time and cost for
Manufacturing Business Technology. However, Boing did not analyzed the
supplier/location based demographic behavior.

Due to cultural differences, some tier-2 or tier-3 suppliers did not often enter accurate
and timely information into the Exostar system. As a result, various tier-1 suppliers and
Boeing were not aware of the delay problems in a timely manner, which makes it
difficult for Boeing to respond to these problems quickly.

Supplier management.
Absence to merge constantly the short- and long-term program administration in each
level or each country then, it caused delayed and impacted to other production. It
seemed that it missed the deep process alignment in each stage to ensure the
production timeline and quality.

Quality control and audit

Some issues should be found the errors during production or tests, but it could not be
found till it got an accident or before hand overing to the airline companies thus, it
caused to delay and costs to fix issues. Especially, each country or region could have
the different standard of the quality control then, it is more complicated to control or
align to merge each part. Hence, it should set one standard to control at least to
mitigate the diverse partnership quality standard management and control and reduce
quality issues and lack of close audit on supplier design system and development and
responsibility hence, it seemed that it’s too late once it found each issue.

 Lack of build supplier control problem or database to monitor and chose correct
suppliers, it should have database to share and review to let supplier
improvement for solutions or not let supplier join if they didn’t pass any standard
requirements or audits.
 Underestimate to foresee uncontrol factors along the production processes in
each level, each manufacturer could have some internal issues which impact to
 next production or in country level issue of political challenges to causes some
barrier or obstacles.
 Although, the outsourcing strategy, at least, for the main part such as innovation
or system and quality control, it should be centralized control and manage.

Cash flow management

Once delay delivery happened, it should impact to the financial issues, especially the
cash flow of the company including the partners hence, the impact will make the issues
more seriously in each level as the company might not be able to pay to their
manufactures on time and caused to the delay delivery finally. Moreover, the share
value dropped then, it could lead to lost and trust including lost the market share to the
competitor.
 4. Critically analyse if lacunae in the 787 designs are primarily responsible for its
current woes. 

The existing system is appreciated as it habitual and has already been proven.
However, innovation or contemplation has its inherent risk but is solicited to strive for
continual improvement. Boeing tried an experimental and more effective supply chain
and took steps to mitigate/minimize/accept the risk too, which was later proven to be
inadequate. It is not more than a hind-side bias to criticize the shortcomings. The 787
SC design was adopted by many automobile sectors globally.

By implementing risk correction & prevention measures as listed below, the design can
be improved effectively:

Risk Factor Reactive risk mitigation Proactive risk mitigation

strategy strategy

Technology Modify design Demographic analysis

throughout the SC for effective IT
system for data sharing
Supply Reverse integration. Purchase Better control for tier 2 supplier
company at the bottleneck stage selection

Process Visit & handholding support to tier Better risk sharing opportunity &
2 suppliers incentive plans
Managemen Include SME for SCM Involve SCM expert for
t evaluating & governing the entire
network
Labour Increase incentive & reduce Perform outreach and
outsourcing or non0critical items communicate outsourcing
strategy & the reason behind
Customer Public relation campaigns to built Collaborative approach with
customer’s confidence. customers and regular progress
updates
 5. Suggest remedial measures to bring the 787 projects back on track
and future directions for similar projects of Boeing.

Improve Supply Chain Visibility

To further develop data exactness, Boeing should have necessitated that every partner
and supplier give all pre-required data in the SC network connections instead of
depending on alarms produced from the program solely after they were
straightforwardly impacted. Likewise, Boeing should offer motivating forces to all
suppliers to utilize Exostar to impart exact data speedily.

Improve Strategic Supplier Section Process and Relationships

To assess every supplier's technological capacity and production network, the
management ability for creating and assembling a specific part of the Dreamliner would
have empowered Boeing to choose a more professional level 1 vital supplier, which
could keep away from or diminish potential deferrals brought about by unpracticed ones
level 1 suppliers.

Modify the Risk-Sharing Contract

Although the deferred payment term related to the risk sharing agreement was planned
to lessen Boeing's financial risk, it didn't give appropriate motivating forces to level 1
suppliers to complete their jobs early. If some strategic partners are unequipped for
fostering their segments as per the arranged schedule, the whole development plan is
pushed back. As a result of these delays, Boeing incurred millions of dollars in penalties
that it had to pay out to its customers (West, 2007). To properly align the incentives
among all strategic partners, Boeing should have structured the contracts with reward
(penalty) for on-time (late) delivery (Kwon et al., 2009).

Proactive Management Team

Boeing should have chosen the right people for the job at the outset of the program,
permitting them to expect and stay away from the risks related to its original SC network
structure. Likewise, recognizing the sources of potential problems and having the
experts set up would moderate many the risks and permit Boeing to respond more
quickly and effectively when problems occurred.

Proactive Labor Relationship Management

Boeing's system brought about dissatisfaction among Boeing's engineers to build its
outsourced activities to outer suppliers. Had the labor union overall dissatisfaction with
regards to Boeing's outsourcing strategy been considered, Boeing might not have
chosen to outsource 70% of its parts. Regardless of whether this outsourcing system
was justified financially, Boeing might have dealt with its work relationship proactively by
talking about the cycle, extending employment opportunity affirmations, and acquiring
purchases from unions. This proactive work relationship the management would have
made a more mutually beneficial association, staying away from work strikes.

Proactive Customer Relationship Management

Recognizing the risks associated with innovative product development, proactive
customer relationship management is critical to help customers set proper expectations
when placing their orders. Better correspondence with clients through the improvement
interaction can empower an organization to deal with clients' insights throughout the
whole item development process.

Risk Factor Reactive risk mitigation Proactive risk mitigation

strategy strategy
Technology Modify design Demographic analysis
throughout the SC for effective IT
system for data sharing

Supply Reverse integration. Purchase Better control for tier 2 supplier

company at the bottleneck stage selection

Process Visit & handholding support to tier Better risk sharing opportunity &
2 suppliers incentive plans

Managemen Include SME for SCM Involve SCM expert for

t evaluating & governing the entire
network

Labour Increase incentive & reduce Perform outreach and

outsourcing or non0critical items communicate outsourcing
strategy & the reason behind

Customer Public relation campaigns to built Collaborative approach with

customer’s confidence. customers and regular progress
updates