If you’ve traveled by air, you more than likely rose above the clouds in a Boeing aircraft.
Boeing is an American multinational corporation that designs, manufactures and sells airplanes, rotocraft, rockets, and satellites. With over 159,054 people employed by the company and a revenue number of 96.11 billion USD in 2015, it is one of the largest and most powerful companies on the planet.
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In 2003, Boeing began to develop the 787 Dreamline – a project that dragged out over a number of years and cost the company billions of dollars as a result.
Today, the 787 Dreamliner is in full operation. At this precise moment in time, there are close to 200 planes flying overhead all around the world. However, this passenger plane was not always so successful.
Developing the aircraft proved difficult. This was due to the use of composite materials compared to the traditional metals. Couple this with a decision to share the development of the aircraft with suppliers and Boeing were left with an unexpectedly complex project. Most difficult perhaps was the hard-to-manage supply chain which caused the vast majority of problems.
The project ran three years past its deadline, costing Boeing billions of dollars. In 2011, it finally entered commercial service, but its problems did not end there.
Two years after officially hitting our skies, Boeing experienced a terrible few days. In a little over a week, two separate 787s experienced onboard emergencies. Both were caused by the same faulty part: a lithium iron battery. Even after its official launch, the 787 project caused problems for Boeing.
Why it Failed
The Boeing 787 Dreamliner was more of a ‘nightmare-causer’ for Boeing. In between the years of 2003 and 2013, the project cost the company between 17 and 23 billion dollars (estimated cost-to-build was 5 billion USD).
The 787 is a perfect example of a project that ran past its deadline and increased costs dramatically as a result. As mentioned earlier in this piece, Boeing’s supply chain was complex and difficult to manage. The powers-that-be in Boeing made the decision to outsource the design and manufacturing for the majority of the 787s parts. The reason for this was to decrease costs. Traditionally, these tasks were conducted in-house.
This out-sourcing decision cost Boeing billions of dollars. However, the most astonishing aspect of this particular project failure was not the billions lost due to a complex supply chain but the decision that preceded it. Boeing received advice from its technical experts before initiating this project, which was to keep with traditional methods of design and manufacture the company had used to date. Ironically, Boeing ignored this advice in an attempt to cut costs.
In my eyes, there are two lessons learned from Boeing’s 787 mishap.
Firstly, the importance of simplicity and process. Project management is a process-oriented discipline. Having a series of steps to follow makes any project that bit simpler. By out-sourcing the design and manufacture of the 787, Boeing reduced its control on the project and its process. This complicated matters and caused a litany of problems and errors which were difficult to overcome.
Secondly, don’t ignore the experts. Boeing received advice from technical experts warning of the dangers of outsourcing. They were also advised to keep the manufacture and design in-house. This advice was ignored and billions of dollars lost as a result.