What do you think McNerney should do as an overall scheme? CASE INCIDENT 2 Boein

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What do you think McNerney should do as an overall scheme?

CASE INCIDENT 2 Boeing Dreamliner: Engineering Nightmare or Organizational Disaster? As a flight of imagination, Boring's 787 Dreamliner was the United States. The r an escelliest idea: made of composise materials, th e plane worklwide were then confined to tion could be found. we-i identify the root cause," it's diffkult McNerney is a proponent of Six Sigma and t enough to significantly reduce furl While Boeing's CEO Jim McNernmey sas he in le mainsaining a passenger kad up to 230 seats Airline carriers chose options from a long list of unprec- edensed hasuries to entice the flying public and placed he thinks will fix the Dreamliner's operationa their onlers well ahead of the expected completion dates. chief among them the battery crisis. On the Ptoble Aa airplane hke the 787 has a design about as complex tics analytics tools used to streamline producticn e And chea the problems started that he will try to as chat of a nuclear power plant, and Boeing's equallying standards, so it is concevable complex offshore organizational structure didn't help the s standardization throughout the complex s execution. Boeing outsources 67 percent of its manufac- He may also decide, along with his engineerin uring and many of its engineering functions While the the long list of features complicates orders t mach therefore simplify the manufacturing process by elimins official assembly site is in Evereet, Washington, parts manafactured at 100 supplier sites in countries across the lobe, and some of those suppliers piece- were ing options. s subcontracted piece On the other hand, McNerney may approach this rk to other firms Because the outsourcing plan allowed organizational structure problem, both at corpora veodors to develop their own blucprints, language bar quarters and abroad. While he has been meeting daily w riers became a problem back in Washington as workers his top executives, there have been so ayo struggled to understand muldlingual assembly instruc changes during the 787's history that it would be diffice tions Wben components didn't fit together properly, the for him to identify responsibility for errors in order fixes needed along the supply chain and with engineering make changes in the team or the organizational str eft the runway on help make the planes. The first customer delivery was still and tie suppliers to the organizational structure of re almost impossble to implement. The first aircraft For the work done abroad. MeNerney might be looking uc a test flight in 2009, but Bocing had to to restructure reporting relationships in favor of buy one of the suppliers a year later (cost: $1 billion) to spans of control to heighten management accountabiliy rate Boeing. Or he might be considering "reshoring w and industry watchers thought its troubles bring manufacturing physically close to the final asem the first ordler was delivered to All Nippon bly site and under Boeing's control while centralizing àe Airways (ANA) in 2011, three years behind schedule and organization structure. If he doesn't do this for all com- afier at least sevea manufacturing delays, they were wrong. ponents, he may continue to allow local suppliers to mun Besides the continuing woes of remaining behind sched. ufacture for Boeing, or he may follow current thinking ule (848 planes have been ordered bat only 6 percent that key components (generally, the most complex pars hase been delivered). Boeing's Dreamliner has suffered should not be outsourced logically advanced lithium-ion batteries started a fire on that the c numcrous mechanical problems. After the plane's techno in January 2013, ANA and Japan Airlines grounded suit, grounding all 787s in No matter what Boeing and McNerney decide, it is clea t and forced another into an emergency land- tently before worldwide government agencies wil l company must produce reliable aircraft coos fleets. The FAA followed planes to fly, which may be long before the pub consider trusting the safety of the Dreamlinet the

Explanation / Answer

As an overall scheme, McNearney should first focus on fixing the current problems with the Boeing's Dreamliner. The next priority for him is to repair the public image of the company. The unsuccessful launch has not only had a business impact, but has also severely harmed the company's reputation.

Going ahead, McNerney should put a good organizational structure in place which can support high innovation while leveraging cost advantages of outsourcing. This system needs to be carefully designed with sufficient checks and balances to avoid such disasters in the future. No matter what, McNerney should try and fix the issues and bring back the lost glory of the company.

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