Boeing Dreamliner: Engineering Nightmare or Organizational Disaster?

As a flight of imagination, Boeing's 787 Dreamliner was an excellent idea: made of composite

materials, the plane would be lightweight enough to significantly reduce fuel cost while

maintaining a passenger load up to 290 seats. Airline carriers chose options from a long list of

unprecedented luxuries to entice the flying public and placed their orders well ahead of the

expected completion dates. And then the problem started.

An airplane like the 787 has a design about as complex as that of a nuclear power plant, and the

Boeing's equally complex offshore organizational structure didn't help the execution. Boeing

outsources 67 percent of its manufacturing and many of its engineering functions. While the

official assembly site is in Everett, Washington, parts were manufactured at 100 supplier sites in

countries across the globe, and some of those suppliers subcontracted piecework to other firms.

Because the outsourcing plan allowed vendors to develop their own blueprints, language barriers

became a problem back in Washington as workers struggled to understand multilingual assembly

instructions. When components didn't fit together properly, the fixes needed along the supply

chain and with engineering were almost impossible to implement. The first aircraft left the runway

on a test flight in 2009, but Boeing had to buy one of the suppliers a year later (cost: $1 billion) to

help make the planes. The first customer delivery was still years away.

If Boeing and industry watchers thought its troubles were over when the first order was delivered

to All Nippon Airways, (ANA) in 2011, 3 years behind schedule and after at least seven

manufacturing delays, they were wrong. Besides the continuing woes of remaining behind

schedule, Boeing's Dreamliner suffered numerous mechanical problems. After the plane's

technologically advanced lithium-ion batteries started fire on one aircraft and forced another into

an emergency landing in January 2013, ANA and Japan Airlines grounded their fleets. The FAA

followed suit, grounding all 787s in the United States. The remaining 50 flying Dreamliners

worldwide were then confined to the tarmac until a solution could be found.

This looked like an organizational structure problem, both at corporate headquarters and abroad.

However, there have been so many management changes during the 787's history that it would

be difficult for anyone to identify responsibility for errors in order to make changes in the team or

the organizational structure. For the work done abroad, restructuring reporting relationships in

favor of smaller spans of control to heightens management accountability and tie suppliers to the

organizational structure of corporate Boeing could be considered. Or "reshoring" to bring

manufacturing physically close to the final assembly site and under Boeings control while

centralizing the organizational structure could be an option.

Question:

1. What organizational structure would you suggest to effectively tie in Boeing's managers

and suppliers abroad? Sketch your ideas. (Goals for managers might include facilitating

teams, coordinating efforts, maintaining organizational transparency, and creating

conversations.)