Boeing Dreamliner Image from Boeing.com

Supply Chain: 787 Dreamliner Problems

Jan 29, 2013 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic Debates, Economic History, Innovation, Labor, Regulation, Uncategorized • 856 Views    No Comments

To understand Boeing’s supply chain problems with its grounded 787 Dreamliners, we can start with Legos.

Legos told one reporter that 18 bricks from every 1 million made are defective. If a problem piece is discovered, the company can identify its mold and correct it. They just need to look at the 3 numbers that are stamped on every brick. A costly process, manufacturing is tightly controlled by Lego.

By contrast, when Boeing conceived its 787 Dreamliner, management outsourced 60% of the manufacturing process to approximately 50 “strategic partners.” Hoping to control the expense of their state-of-the-art design, they selected cost control over supply chain control.

And that takes us to the nuts and bolts of the story…literally.

In 2007, Alcoa told Boeing that it could not meet its deadline for supplying the titanium and aluminum bolts (fasteners) for the 787 Dreamliner. They also preferred not sending over the 10 fasteners that Boeing immediately needed for a model of the plane’s shell. Consequently, Boeing had to use temporary fasteners to hold together its state-of-the-art carbon-fiber plastic fuselage. (Very different from traditional aluminum plane rivets, one titanium fastener is strong enough to support the weight of 50 Toyota Camrys.)

Shown in this WSJ.com, the Boeing Dreamliner fuselage is sort of like the UN. picture, Alcoa plane fasteners

Shown in this WSJ.com picture of the kinds of fasteners Alcoa supplies, the Boeing Dreamliner fuselage is sort of like the UN.

Why talk about fasteners when the Boeing Dreamliner had overheated batteries?

When just one supplier like Alcoa was late or a quality question surfaced, the impact rippled through the entire production schedule creating logjams, temporary fixes, planes that had to be retrofitted and reinspected. Add in conflicting business goals between Boeing and its “strategic partners” and you can see how tough it will be to diagnose the battery problems that grounded the Dreamliner fleet.

Very different from Legos, Boeing had a vulnerable supply chain.

Sources and Resources: From NPR and Businessweek these articles here and here were perfect for some Lego insight. Enjoyable always, the New Yorker’s James Surowiecki recently wrote about the Dreamliner while articles here and here from several years ago give contemporary descriptions of their troubles. My picture of the fasteners was from this WSJ article and the Dreamliner, from Boeing.

Related Posts

« »