Boeing’s Issues in Production and Development
Production and development management is critical to the organization’s leadership. Company managers must lead by considering various operational factors before making decisions. Although businesses may fail because of many reasons, any organization that overlooks the “10 operations management decisions” is doomed to fail or face avoidable turbulences in its operations. This research paper examines the production and development challenges experienced at Boeing, a prominent U.S aircraft manufacturing company. In the past two decades, the company has been facing a series of lawsuits regarding the quality and safety of its aircraft, especially following the most recent and deadliest crash of Boeing 737 MAX in March 2019. Owned by Ethiopian Airlines, this aircraft crash had 156 fatalities accounting for more than 50% of the total aircraft deaths that year.
For many years, most of the airlines and government security agencies have been preferring Boeing aircraft over others in the industry, especially due to its long-standing reputation in the production of safe and quality aircraft. Things have changed, the company that has been in operation for more than a century has started compromising safety and quality with cheaper aircraft.
Production quality concerns
In recent years, Boeing focused on cost-cutting measures, especially because of the experienced competition. Some production and management concerns have raised extensive focus following the crash of the Boeing 737 MAX series of Lion Air in 2018 in Indonesia. Following the crash of the Lion Air, many people placed the blame on unsatisfactory training on pilots and poor maintenance. Less than a year after the Lion Air plane crash, another B737 MAX aircraft owned by Ethiopian Airlines, the deadliest aircraft crash of the year 2019, crashed due to similar production challenges (Travica, 2020). The investigators on the cause of the crash established no external influence leading to the malfunctioning and subsequent crash. Usually, external conditions such as poor weather conditions lead to an aircraft crash. Besides, Ethiopian Air was never hijacked or encountered interferences with the flight decks to cause the crash.
In the two incidences, pilots were unable to keep the planes from what is usually called noise-diving. Consequently, regulators and Airline operators across the globe began to ground Boeing 737 MAX indeterminately. For instance, both New Zealand and Australian Civil Aviation Authorities banned flying of Boeing 737 MAX aircraft over their airspaces for fear of another crash that may cause disaster in their countries. Many other civil aviation authorities discredited the quality and safety of B737 MAX and hence issued similar bans. The most recent and perhaps most surprising incident is the clamping down of the B737 MAX by the FAA (Federal Aviation Administration), the US federal agency that certifies aircraft in the country.
One of the ten operational management decisions is quality management (Fettermann, Cavalcante, Almeida & Tortorella, 2018). Quality management decisions involve being clear on consumer demands and meeting customer expectations. Production managers must ensure that their research and development departments conduct extensive research on customer demands while providing their findings to the production manager for implementation. Through the research and development personnel, production managers would have customer demands, services in production, and a series of quality assurance tests before launching a product to the consumers.
According to John Barnet, a former Boeing’s quality assurance manager, the company is currently suffering from the competition and thus focusing on cost-cutting measures at the expense of quality products. While in an interview with the ABC news, Barnet who was at the flagship of the production of Boeing 787 that was to be one of the biggest milestones for Boeing said that he discovered quality and safety concerns while inspecting B787 and reported the concern to the production manager. However, the management disregarded his opinions and advice to halt the launch of B787. As a concerning quality and safety manager, he took the matter to the FAA for further investigation. The agency halted further flights with the B787 until Barnet’s claims are investigated to the satisfaction of the agency.
During the manufacture of B737 MAX, the company was optimistic that the product would get back to the operations by the close of 2019 but the United States’ Federal Aviation Administration severely delayed the product’s recertification. When banning further travels by B737 MAX, FAA said that it “wanted a safe place and didn’t want to hurt America’s biggest exporter.” Consequently, Boeing about 387 deliveries of B737 MAX and more than 400 undelivered B737 MAX aircraft were grounded. A few months later, the company suspended the production of B787 at its South Carolina citing reasons not related to its production failures.
Safety
Process and capacity design challenges
When making production decisions, production and development managers must consider the effects of capacity and process design. This factor concerns putting in place design strategies that can effectively support the entire goals of production including resources and technologies. For the production managers to realize good results, they may utilize a value stream map to establish the necessary processes and the best way to ensure that they run efficiently (Travica, 2020). On the contrary, the investigators of the causes of the B737 MAX crash in both cases claimed that the two airlines had a “system that was new to the latest iteration of the previously best-selling commercial aircraft – the B737.” As the fourth generation of the 737 aircraft, the MAX series debuted the market in 1968 where it operated in its B737-100 version. In its latest version, the doomed 737 MAX started its operation in 2018 with the security and safety threatening computer systems.
Different studies reveal that Boeing launched its B737 MAX series in hurry due to the increased market pressure after Airbus, the main Boeing’s aircraft manufacturing competitor, released the A320 family of the B737 category. The Airbus 320 had fuel-efficient new engines. Unlike the Airbus that took its time to plan for the A320 processes and design, Boeing hurried to make its B737 MAX series without in-depth considerations of risks involved in system failures. While Airbus changed provided larger and new engines that would offer efficiency on clearing the ground in addition to enhanced aircraft balance, Boeing developed MCAS (Manoeuvring Characteristics Augmentation System) that would notice unwarranted upward pitches and automatically push the aircraft’s nose downwards.
According to the investigation on the cause of the Lion Air Boeing 737 MAX series, the pilot tried hard to control the flight remains in the air but the plane kept forcing downward movement despite the failure to pitch up (Hitt, Xu & Carnes, 2016). The Ethiopian Air flight that crashed in 2019 was also not able to command the flights to remain in the air following a strong force that continuously forced the nose downwards. Although the investigations are yet to complete, the already gathered information revealed that the aircraft had problems with the installed computer systems and the gauge that measured the angles at which the flight can fly.
The two crashes forced the company to embark on tireless efforts to fix the software challenges. However, the Federation Aviation Administration established other production challenges. According to the FAA, the software installed to B737 MAX affected other flight control hardware such as the flaps. The aircraft had also failures called the uncontained engine failure that further caused problems with the rudder cables. With the “uncontained engine failure,” parts of the engine blades detached and could “make the aircraft to fly at higher speeds in to the fuselage while critically damaging the cables.”
Scheduling and consumer safety
Scheduling is a major operations management in a company. Managers must understand the best timing to introduce their products to the market. This factor involves the understanding of the kind of customers that require the product and the amount or quantity they may need. On the contrary, the management at Boeing decided to produce and launch the Boeing 737 MAX perhaps because of increased pressure from competition following the launch of A320 by its competitor (Petrescu et al., 2017). The new product by the competitor had fuel-efficient engines that influenced its low cost of operation. Boeing decided to change its long-standing safe and secure business strategy to cost-cutting strategies. Many people accused Boeing of delivering B737 MAX before it was fully tested and proved ready and safe to fly.
Some investigators on the Lion Air crash discovered that Boeing might have been aware of the challenges revolving around the newly installed computer system before the aircraft crashed. Yet, the company went ahead and supplied the aircraft to Lion Air without correcting the software or informing the airline about the software issues. Instead of stopping to deliver B737 MAX to other airlines, Boeing started to work towards fixing the software concern and informed its pilots that the aircraft had a potential concern. The rush in releasing Boeing 737 MAX contravenes the best operational management decisions. The decision compromised consumer safety and security, because of posing a disaster that could have otherwise been avoided.
Despite the FAA analysis revealing that the aircraft was bound to crash at least twice every year, the administration did not intervene. Another irony regarding the production and communication problems within Boeing is that the 737 MAX pilot manual did not indicate the installation of a new system. Rather, the training for pilots transiting from earlier 737NG to the newly manufactured 737 MAX only involved about an hour’s video without conducting inflight simulators training (Johnston & Harris, 2019). Another investigation established various production failures at Boeing. One of these failures is the lack of a cohesive top-down system’s development and review function as well as the system’s safety evaluation. It was also hard to investigate full compliance because of the broad and scrappy certification. From the operations management perspective, certification comes after all evaluations and testing are done and that safety and security of the people should come first.
Outsourcing, cost-cutting, and maintenance
Boeing’s 787 Dreamliner was meant to be the company’s flagship project, a product, and a milestone of the early years of the 21st century. It was the first aircraft made of composites entirely instead of the typical aluminum. The previously made 767 used 20% more fuel than the 787 Dreamliner. With the experienced fuel price fluctuations to high costs and the declining profit margins among airlines make it highly desirable and convenient for the company. However, this great deal has not been successful. Following a series of production management issues, the company has halted the manufacturing processes (Travica, 2020). Although this great product was planned to be released in 2008, a series of cost plunders and delays implied that the delivery of 787 Dreamliner was not practical until the year 2011. It is important to have a clear strategy and a layout design including the delivery of the production materials as well as the delivery of the final product.
On the contrary, Boeing failed to have a clear roadmap on the strategy and the design of the 787 Dreamliner at first. No sooner had the deliveries of 787 started than Boeing started demonstrating its production challenges. Since its first delivery, 787 has been encountering an array of high-profile production concerns including smoke in the cabins, fuel leakages, and aircraft fires (Herkert, Borenstein & Miller, 2020). As such, 787 aircraft have been grounded since international regulators are investigating its operational safety.
Some of these challenges are typical to new aircraft releases. However, the production issues associated with Boeing 787 had exceeded beyond the limits. These problems were both during the product’s gestation and after launching while pointing out that the company has a lot of tasks before the complete operationalization of the product (Petrescu et al., 2017). Although outsourcing one of the effective contemporary strategies for reducing operational costs, some of the problems that Boeing is facing are partly linked to the strategy. Boeing employed a very big outsourcing campaign of a magnitude that has never been witnessed since its history. This kind of outsourcing received a lot of press interest and public criticism. The critiques argue that most of the production questions lie squarely on outsourcing.
As mentioned earlier, outsourcing is common practice in modern operational management and Boeing has been subcontracting for many years. Although outsourcing may influence problems in the production line particularly when communication is a problem, it is hard to believe that outsourcing at Boeing caused all these internal problems (Johnston & Harris, 2019). Usually, outsourcing develops a business model risk that opens a door to outsource business income. A paper produced by Boeing in 2001 hinted at the challenge of internal communication across the outsourced suppliers and developers. The primary challenge may not have been influenced by outsourcing but rather occurred because the company had decided to treat the production and design of this very new aircraft as a “modular system so early in its development.”
The difficulties in supply chain and inventory management
Another critical area that demonstrated to have challenges in the supply chain management for Boeing. As earlier discussed, most of the delays in deliveries were influenced by the delayed supply of production parts form the suppliers. As such, the company has a task in working out its supply chain management to avoid delays. Usually, supply chain management directly affects the inventory. In light of this, the company must be ready to have on-time deliveries of the products and enhance communication with the suppliers for the timely delivery of production items.
The production of Boeing 787 was expected to be very unique and attract a pool of customers because of the design of the aircraft as well as its size. However, because of the previous experiences involving Boeing including the crash of the Ethiopian Airline, many airlines and aircraft leasing companies reduced their desire for the new model of Boeing’s air crafts (Tang, Zimmerman & Nelson, 2019). Besides, Boeing delayed delivery of the aircraft to the customer because of challenges in the supply chain. While Boeing would design and make aircraft with the full knowledge of the source of the required parts, the production of 787 was different. Some of the parts were not delivered at a time that would allow quality and safe manufacture of 787 required by the customers.
Boeing 737 was an aircraft that promised to be very light and with very high technology. More than 50% of its production materials would be plastics as opposed to conventional aluminum. Its cabin would be overly luxurious for the passengers and that the aircraft would influence some profits to the airlines because it consumed 20% less fuel than the 777X model and other previously made aircraft throughout its history. However, when the production of this flagship aircraft began, the difference between the company’s vision and the reality broadened. The jet that the company called “the Dreamliner” because it was light and would cut cost by a significant margin was plagued with various development challenges including cost overruns, production delays, and the reduction of the workers’ motivation.
The research established that most of the managers at Boeing, designers, and Boeing engineers recounted the pressure to meet stringent time limits. Besides, Boeing owed its problems to the concern that it tried to implement a plan that it had never tried before. The plan and design involved the use of parts manufactured across the entire world. Although most of the former Boeing workforce is still proud to have contributed to the making to its making and hence embraced the jetliner, they continue to ponder whether it was justified to work under pressure and unwarranted deadlines.
According to a significant population of the former Boeing workers, the rush in delivering the aircraft has greatly impacted Boeing’s reputation that it has built for many years. Besides, the company incurred heavy costs, especially in making compensations for all onboard passengers, crew, and the pilots of Ethiopian Airlines. Boeing also suffered immensely when FAA to a very unlikely action when grounding the recent Boeing 787. An array of countries that banned the flying of both 737 MAX depicted their mistrust to the company and are less likely to make orders of these aircraft if they are recertified or any new products. Although the company realized the effects of these production problems and changed the chief executive officer, it will take some time to convince most of its customers that the aircraft they would be safe.
Maintenance
Aircraft maintenance is one of the critical areas that the company production managers must give considerable emphasis to. A whistleblower told the House Transport Committee of the United States that he had “urged Boeing to stop production” of the 787 because of apparent errors and mistakes, and overworked workers as well as corner-cutting but the company could not adhere to the call. Safety and security concerns exposed with the 737 MAX, Dreamliner and the 777X aircraft are a clear indication that Boeing has shifted from its known policy of safety first to dividends and profits prioritization.
It is in line with the ten operation management decisions to have consistency in quality and costs as well as resources in all business departments for the production of proper goods and services. As such, it was important for Boeing to look for ways that may ensure reasonable costs of production for reduced selling prices of its products. However, the decision to factor production costs or selling prices must not overshadow the safety and security of the people. As such, it was against the principles of operations management for the company to deliver MAX, 787, or 777X wile informed about plausible safety and security concerns to the consumer end. It is also noteworthy that employee satisfaction and motivation plays a critical role in the production of quality goods and services. By overworking its workforce, Boeing is likely to compromise employee performance and productivity. Compromised employee performance may further compromise the quality of service or goods produced. As such, Boeing needs to check on its employee welfare to avoid unnecessary production errors and concerns.
Conclusion
Boeing is an old aircraft manufacturing company with a known reputation for many years. However, recent tragedies involving its aircrafts such as the B737 MAX series and 787 Dreamliner. The existing findings from the investigations relating to these aircraft crashes show that there were production problems in the making of these aircraft. Boeing somewhat focused on cost-cutting measures due to the competition at the expense of the safety and security of the product consumers. The company rushed to deliver its products and thus the crashes. These crashes demonstrated the importance of effective product management at the company.
References
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Hitt, M. A., Xu, K., & Carnes, C. M. (2016). Resource-based theory in operations management research. Journal of Operations Management, 41, 77-94.
Johnston, P., & Harris, R. (2019). The Boeing 737 MAX saga: lessons for software organizations. Software Quality Professional, 21(3), 4-12.
Petrescu, R. V., Aversa, R., Akash, B., Corchado, J., Berto, F., Apicella, A., & Petrescu, F. I. (2017). When Boeing is dreaming–a review. Journal of Aircraft and Spacecraft Technology, 1(3).
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Travica, B. (2020). Mediating Realities: A Case of the Boeing 737 MAX. Informing Science: The International Journal of an Emerging Transdiscipline, 23, 25-47.