While we have discussed the advantages of alliances and partnering with suppliers, if they are not managed correctly, problems may occur. Consider the case of the Boeing 787 Dreamliner. What was initially viewed as a smooth journey to the Valhalla of energy efficiency and high-tech wizardry, the trip for Boeing has been turbulent, indeed. One of the contributors to Boeing's poor performance in this project may be poorly managed outsourcing. The culture of Boeing is deeply ingrained in engineering and design, and has been centrally located in Seattle. With the 787, much of its engineering and production were outsourced to a complex supply chain of about 50 suppliers. According to Tom McCarty, president of the Society of Professional Engineering Employees in Aerospace, "Plane-making is best done by a group of engineers and builders working in close proximity without the distractions of language barriers, cultural differences, and bureaucracy." Although this is the expected view of labor unions, international outsourcing is very much a political as well as an operational necessity because more than 80% of Boeing's sales are outside of the United States. However, Boeing may have been overly aggressive in outsourcing two-thirds of its production. According to McCarty, "Now with the 787, management felt they knew how to outsource the design jobs. Turns out they didn't." Figure 9-3 shows a picture of Boeing 787 subsystems and suppliers. As you can see, this is a large number of suppliers to manage. There is often no playbook that shows the best way to manage such large networks of suppliers. Boeing has acknowledged these problems and the criticism it has received. Boeing CEO Jim McNerney stated, "In retrospect, our 787 game plan may have been overly ambitious, incorporating too many firsts all at oncein the application of new technologies, in revolutionary design-and-build processes, and in increased global sourcing of engineering and manufacturing content."

The figure below shows a picture of a Boeing 787 subsystems and suppliers, taken from page 241 of your prescribed textbook. Boeing CEO Jim McNerney stated, "In retrospect, our 787-game plan may have been overly ambitious, incorporating too many firsts all at oncein the application of new technologies, in revolutionary design-and-build processes, and in increased global sourcing of engineering and manufacturing content."