On Supply Chain Matters, our principle goal in the various commentaries we pen regarding global based supply chain developments is to provide insights for our readers. Our intent is not to disparage any single company or organization but to help readers and students of supply chain management relate supply chain, product management and information technology developments to key learning.
If you search our content on the topic of Boeing, you will discover a lot of commentaries. Boeing’s past efforts in outsourcing major portions of product value-chain have resulted in a lot of snafus, or so it seems so. The Boeing 787 Dreamliner program will no doubt serve as a living case study as to lessons in outsourcing.
Thus, it was with some surprise yesterday when we were alerted to a Reuters published article, Boeing to place much of 777X design work outside of Seattle.
Apparently, Boeing senior management has endorsed the decision to source a significant amount of the design work related to the company’s next generation wide-body aircraft in areas outside of Seattle. The 777x is speculated to be able to transport over 400 passengers and Boeing has been reportedly aggressively promoting this aircraft to Asia and Middle East based air carriers.
The designated design sites are to be Charlestown South Carolina, Huntsville Alabama, Long Beach California, Philadelphia Pennsylvania, St. Louis Missouri and Moscow, Russia. What’s interesting about this news is that Boeing indicates that no decisions have been made regarding the involvement of its Puget Sound engineering teams, home to the core design group.
Is this the same group that was marshaled to fix the numerous problems that were encountered on the 787, including the operational grounding?
Boeing has reiterated that no final decisions have been made regarding the sourcing of production operations of the 777X although speculation revolves around the Charlestown facility. One would have surmised that a lesson from the 787 program was the importance of co-locating engineering design with manufacturing, especially during the critical development phases. The Reuters story hints strongly that the engineering design decision was more about migrating work to lower-cost, nonunion states. Reuters further speculates that the timing coincides with efforts to lobby the state of Washington on tax incentives to source 777X design and assembly work in Everett Washington. The Governor of Washington state reportedly only knew of the announcement at the time of the Reuters report.
Boeing re-iterates that it would apply “lessons learned” from the 787 and 747-8 programs, and that bringing skills from across the company will foster more efficient use of engineering resources.
We certainly hope so, but then again, the timing and tone would indicate different motivations.