Introduction of boeing Autosaved)

Table of Contents

Executive Summary 01

Introduction to the chosen organizations 02

Aspects of Operations Management for Boeing & Airbus 03

TQM, JIT, 04

Comparison between Airbus & Boeing and Global Competition 05

A suitable change in Boeing’s Operations plan 06

Operations strategy that could solve the problems of Boeing in this 787 Dreamliner 07

The current supply chain management practices and suggest any improvement if needed 08

Project management with the help of a PERT/CPM diagram and a GANTT Chart 09

Critical analysis 10

The role of IT 11

Conclusion and recommendations 12

References 13

Executive Summary

This research has been done to analyze and evaluate the operational issues of manufacturing Boeing 787 Dreamliner’s and the problem they have faced, making comparison with airbus A380 project and how the Airbus 380 is giving Boeing a tough competition. Also, it will include the understanding of Boeing’s method of operations and how to apply the key concepts of operations management. This report is a result of videos analysis and research.

In the beginning we started with small introduction about airbus and Boeing as they are the leaders of aircrafts manufacturing also we discuss Boeing’s and Airbus’s aspects of operations management such as just in time and total quality management aspects and applying master Production schedule (MPS) materials requirement planning (MRP) and production activity control (PAC) . Also, I examined all the issues which Boeing has while manufacturing aircraft 787 dream liner’s . Including examining any suitable change in Boeing’s Operations plan, and understanding of

the current supply chain management practices. As well as expanding an operations strategy that might fix Boeing’s 787 Dreamliner issues.

In addition to the above I made a project management to make sure that Boeing completes the defects on time with the help of a PERT/CPM diagram and a Gantt chart. Making a critical analysis of Boeing‘s and Airbus’s tools that they used, also, including the IT role of Boeing. Finally this study includes recommendations to perform better and a conclusion.

Introduction of Boeing

Boeing Considers one of the largest aerospace companies all over the world in manufacturing

commercial and military aircrafts. Boeing is established in 1916 in Seattle by William

Boeing.

Boeing has many customers from 150 countries. They are ordering their airplanes to enhance

their travel experiences.

Boeing has many employees which is more than 165000 employees from all over USA and

other countries to get more talented people and innovative staff. Boeing has produced many

airplanes 737, 747, 767, 777, 787 Dreamliner’s

Boeing started a Hugh investments in United States in world war as they were manufactured

military aircrafts and more than 70% of Boeing sales came from Middle East.

Boeing headquarter in Chicago. In 2012 the company has achieved high income of 3.8 billion

dollars by 2014 the total revenue was 90 billion dollars. Boeing has a good reputation in the

market therefore they have received more than 1200 orders from different countries and

airlines to buy their airplane to enhance the travelling experience with Boeing luxury

aircrafts. As Boeing also looks for customer satisfaction and high quality.

The government of United States is supporting Boeing because it’s an American company

and the profit will get benefits for government as well.

Introduction of Airbus

Airbus started as consortium of European aviation firms to go for competition between an

American companies such as Boeing

Airbus has been founded in 1970 and headquarter in France. The company group has more

than 170 location all over the world most of the company orders now are growing fast and

not only European countries but beyond Europe and also industrial location such as china and

US also they produce helicopter in brazil, the company has researches centers in India and

Singapore.

Airbus has around 138000 employees. They have raised the number of employees from

89000 employees in 2000 to 138000 as of now.

In 2014 the company achieved 96 billion euro as total revenues, now airbus became the first

company manufacturing aircraft and helicopters all over the world, after the group has been

founded in 2000 the revenues has been increased by 145 % and the annual orders increased

by 346% which is Avery successful group.

Explain the aspects of Operations Management that both Boeing and Airbus have, how

they differ and which aspect of their OM practices contribute to the failure of Boeing

787 Dreamliner.

Airbus A380 OM practices

Airbus is the competitor for Boeing and they had a big challenge to produce an airplane can

compete Boeing 787 Dreamliner’s which it can carry more than 250 passengers. Airbus came

up with the idea produce large airplane to travel for thousands of kilometers and carrying

around 550 passengers with luxury seats, lounges, low cost for seat and high customer

services.

The design of airbus A380 has been made to serve the long flight as all passengers will meet

in major airport and the airplane will travel to the other destination.

JIT (Just in time) Practice for Airbus A380

JIT is an important element of operation management process as it shows how you can

handle the inventory with less waste and just placing the order on time and receive the

materials on time to start the process of manufacturing and not fulfil the inventory with

materials which unnecessary to be there in that stage especially aircraft manufacturing it

takes a lot of time to build an aircraft and to reduce the inventory cost.

Airbus has followed the JIT Practice during the production of airbus A380. When they found

that they need to design a new aircraft bigger than Boeing 787 Dreamliner’s and wider they

placed orders for the major aircraft components from around 1500 different suppliers from 30

countries with high technique transportation system to deliver it to France.

They got the wings from wales, engines from United Kingdom, vertical tails from Germany,

horizontal tails from Spain. All the parts came together to finish the assembly plane.

Airbus has saved time and money because of inventory management all parts came same time

and they have started to build the aircraft same time.

TQM (Total Quality Management) Practice for Airbus A380

Total quality management is an approach for organization to improve their products, services,

and culture to deliver the high quality to customers.

When Boeing built 787 Dreamliner’s to compete in the market as it carry around 250

passengers with low cost per seat and excellent services. Airbus was thinking how to build an

aircraft can be competitive aircraft comparing with Boeing 787 Dreamliner’s and without any

failures.

Airbus designed the shape of airbus A380 as mega size aircraft they run the design figures

through computers they were shocked as the design of A380 is very heavy to fly. Here was

the challenge to decrease the weight of aircraft to less than 277 tens. They need lighter

materials, powerful engines and larger wings.

They made an agreement with rolls Royce to build an engine more 30 % faster than Boeing

787 Dreamliner’s and it consume a lot of fuel as that aircraft designed to travel a long

desistance so the engine need test to make sure it save for flight.

Airbus has made test on the engine costs 50 million dollars to make sure if any failure will

happen will not cause any damage for whole aircraft.

Building Hugh wings it was the second challenge to make it lighter than the other aircraft the

made it with Carbone fibers with plastic covers and they checked all components have been

fixed with high quality by using new reboots and monitoring that all parts have been fixed

together in right way

Transportation for major components of aircraft A380 were transferred by beluga aircraft

which can carry aircraft parts and the remaining by shipping and roads.

To build a Hugh aircraft so Hugh factories need to be built. And they built 3 more factories to

start the process of manufacturing aircraft. Airbus followed all quality implements to make

sure the aircraft is safe to fly has a good shape, perfect and luxury designed and more

convenient for all customers.

Master Production Schedule (MPS) for Airbus A380

The goal of master production schedule (MPS) is to meet delivery dates and effective use of

all resources such as inventory, customer demands , orders data, production cost .

Airbus was succeeded to use MPS while manufacturing A380 aircraft, the global airlines

needs a new aircraft has Hugh number of seats including luxury cabin, lounges and seats with

low cost per seat and more customers are travelling and the numbers are increasing that why

airbus they made customer demand then they came up with airbus A380 to meet all

requirements for all customers and to travel long distance.

Inventory cost reduced as they have received all parts same time and they started to build the

aircraft, and at the end they have met the delivery dates and used all resources effectively and

the output comes as high quality productions.

Materials Requirements Planning (MRP) for Airbus A380

It is production planning and inventory control used to manage the manufacturing processes.

Airbus followed MRP while manufacturing A380 they make sure that all required materials

and parts are available for production by getting all aircrafts parts from different suppliers on

the same time to reduce inventory cost to start the production directly. And speed up the

production timing of the aircraft to meet delivery dates for all customers because to build one

aircraft A380 it takes a lot of time so it was challenge for them .

Production Activity control (PAC) for Airbus A380

Airbus has followed the production activity control during manufacture of A380 aircraft by

executing the MPS (Master Production Schedule) and MRP (Materials Requirements Plan)

They have used the lobar and machines effectively during production process to meet the

delivery dates and to reduce the work in progress time to build more aircraft and maintain

customer service level and deliver products on time.

Histogram for Airbus A380

Boeing 787 Dreamliner’s OM Practice

Boeing had competition with other competitors to build a Hugh aircraft. They came up with

Boeing 787 Dreamliner’s to enhance travelling experience. Aircraft 787 Dreamliner’s was

built for many reasons. 787 has been created to save fuel more than 20 % efficient and carry

more than 300 passengers and to travel along distance. The aircraft has many features swiped

wings, electrical flight system and reduce noise.

JIT (Just in time) Practice for Boeing 787 Dreamliner’s

JIT system is an important element in production and manufacturing firm. It measure how the

company can handle the inventory without in wastage or to make full space without usage

and increase the cost for inventory. Boeing followed the JIT system during production of 787

Dreamliner’s. Instead of ordering all parts from different place and keep it in inventory and

increase the inventory cost. They ordered part which they need in specific stage of production

and use it same time. Many suppliers from many different countries France, japan, India,

United Kingdom and South Korea.so the main goal of using JIT system is avoid and waste

will happen because of over production or waiting time in inventory.

TQM (Total Quality Management) Practice for Boeing 787 Dreamliner’s

Total quality management is an approach for organization to improve their products, services,

and culture to deliver the high quality to customers.

When Boeing built 787 Dreamliner’s to compete in the market as it carry around 250

passengers with low cost per seat and excellent services.

Boeing didn’t stick with total quality management practice while manufacturing 787

Dreamliner’s aircraft. Starting from the battery of the aircraft, it was made by Japanese

company. Battery was made of lithium which is very unsafe for flight as the components for

that battery due to long travelling hours it may explode. Boeing made test for this battery but

big explosion happened on their factories and if that happened on board, no chance of

survival however the main concern for boeing to save money. The battery passed in boeing

test even it failed 2 times in 9 days and they said it will not cough a fire on board.

In 1997 it was the beginning of failure when boeing merged with competitors macdonnell

douglas because those two companies with two different business models. Boeing was

successful and Douglas was not successful so the quality and integrity of the product will

suffer as they run the business for cash and reduce the cost.

There was no communication between workers, engineers and executives.

Boeing made the shape of airplane with plastic barrels not with aluminum to reduce weight

and saving fuel and make it cheaper airplane to run.

Due to manufacturing issues there was a delay of schedule to launch the aircraft and deliver it

to customers. The schedule and report say that they might require a deviation because of

quality process but Boeing pushed engineers to work to meet the schedule and the quality

was just a sign on paper.

In 2008 because of strike of workers in Boeing and economic crisis. South Carolina offered

cheaper land and workers as well. They hired uneducated and unskilled staff with no union

between the management and factory there. Some customers didn’t accept to get that aircraft

because it was made in South Carolina because they know that the quality was compromised

and it is just a shape of aircraft.

Master Production Schedule (MPS) for Boeing 787 Dreamliner’s

The goal of master production schedule (MPS) is to meet delivery dates and effective use of

all resources such as inventory, customer demands, orders data, production cost

Boeing didn’t apply MPS (Master Production Schedule) for all resources while

manufacturing 787 Dreamliner’s. they didn’t work on quality and use all resources

effectively to build the aircraft and they production cost increased because many suppliers

were involved and transfer the work to another place on the other side they didn’t meet the

schedule of delivery because of quality issues as more than 2 years delay to deliver the

aircraft to their customers.

Materials Requirements Planning (MRP) for Boeing 787 Dreamliner’s

It is production planning and inventory control used to manage the manufacturing processes.

They have used inventory correctly and ordered each part on time of process and they

ensured that they maintain the lowest level of availability of inventory and it has all needed

components and items for production process.

Production Activity control (PAC) for Boeing 787 Dreamliner’s

PAC is responsible for executing the master production schedule and the material

requirements plan.  At the same time, it must make good use of labor and machines,

minimize work-in-process inventory, and maintain customer service.

When you apply PAC on Boeing you will find they didn’t use the labor on quality standard as

they hired uneducated and unskilled labor in South Carolina to build 787 Dreamliner’s to

reduce the cost. They have maintained the inventory level and availability of materials and

items required for production. Regarding customer services they didn’t maintain the customer

service as they have delayed the delivery dates 2 years because of quality issues and many

customers refused and cancelled their orders especially when they knew that it was

manufactured in south Carolina.

Pareto analysis

(Pareto analysis is based on the idea that 80% of a project's benefit can be achieved by

doing 20% of the work or conversely 80% of problems are traced to 20% of the causes.

using that technique to shows the production of aircraft cause number of problem and quality

issues by getting all aircraft parts even small parts from different supplier and hardly to fit all

parts together it caused number of error and quality issues battery, and aircraft shape and

wings.

Comparison between Boeing & Airbus

Table 1.1 OM Practices

Airbus BoeingTQM ✔ ---JIT ✔ ✔

Examine the need for any suitable change in Boeing’s Operations plan.

Main failure of Boeing operation plan 787 Dreamliner’s aircraft

Battery: Boeing 787 Dreamliner’s battery is one of main issue on that aircraft it made by

Japanese company. It was made from lithium which is very dangerous for flight as it might

caught any fire while boarding because all elements for fire will be there. Boeing made test

for this battery but big explosion happened on their factories and if that happened on board,

no chance of survival however the main concern for Boeing to save money. The battery

passed in Boeing test even it failed 2 times in 9 days.

Merge between to different business models.

In 1997 Boeing has been merged with their competitor macdonnel douglas to reduce cost and

save money. When Boeing was considered as successful company for aircrafts industry and

merging with unsuccessful business models which douglas so the quality and integrity of the

product will suffer as they run the business for cash and reduce the cost.

Poor materials

Boeing had agreement with Italian company to build the shape of airplane with plastic barrels

not with aluminum to reduce weight and saving fuel and make it cheaper airplane to run

which is against the quality standard which should be followed while manufacturing an

airplane

Schedule of delivery

Due to manufacturing issues there was a delay of schedule to launch the aircraft and deliver it

to customers. The schedule and report say that they might require a deviation because of

quality process but Boeing pushed engineers to work to meet the schedule and the quality

was just a sign on paper.

Many customers had cancelled their orders because of the delay and they felt that there are

issues on airplane as Boeing announced that it will delivered on certain date but they delayed

many times which more than 2 years

Poor management and relocate to another site

The management was poor and there was no communication between workers, engineers and

executives because the workers and engineers are saying that the quality and process are

incorrect and they didn’t follow all quality aspects however Boeing Executives are saying

that they have followed all quality process .

In 2008 because of strike of workers in Boeing and economic crisis. South Carolina offered

cheaper land and workers as well. They hired uneducated and unskilled staff with no union

between the management and factory there. Some customers didn’t accept to get that aircraft

because it was made in South Carolina because they know that the quality was compromised

and it is just a shape of aircraft.

Develop an operations strategy that could solve the problems of Boeing in this 787

Dreamliner project.

Boeing needs new changes to solve all the problems of Boeing 787 Dreamliner’s

Boeing need to re-engineer all processes and build a new supply chain for their production.

Using different battery instead of lithium battery which it may cause fire while travelling to

another type of battery and engine can be reliable to travel long distance and test it well

before manufacturing and make sure it is safe for flight.

Boeing need to have a good management and communication between all management’s

levels to make sure that the process and strategy are followed correctly

Quality is the most important element in aircraft manufacturing so they can bring experts of

quality from federal aviation in United States to make sure that Boeing is following the

quality aspects in all production processes. Also the quality of part which comes from

suppliers need to be checked as it follows the standard quality process and its fit together

Main materials shouldn’t be changed to another kind of materials which is cheaper especially

if it’s critical parts. For example Boeing shouldn’t change materials of shape instead of

aluminum parts they put plastic barrels to reduce weight and saving fuel and make it cheaper

airplane to run which is against the quality standard which should be followed while

manufacturing an airplane.

Customer service and deliver the product on times is the meter of how much the company is

successful and trusted because they have delayed many times to deliver the airplanes to their

customers therefore many of their customer had cancelled their orders because they were

afraid that it’s not following the quality process.

Boeing needs to give due date which is matching their schedule of production to make sure

that they will delivered on time without any delay as more delay effect on company

reputation.

Relocate from main factory to another place just because it cheaper land and labor will effect

on quality of the airplane because they might be uneducated workers or unskilled to work in

this critical process and it will be far away for the management to travel a lot to monitor the

work. Also relocating will increasing the production cost. Boeing needs to steak with the

same place with the same talented and experienced workers.

Forecasting is looks like looking through a crystal. And it shouldn’t be like that, in particular,

with the 787 Dreamliner’s project. Operations managers shall have the ability to make

forecasts in order to keep it close as what the outcome will be. To achieve a success it is very

important to get accurate forecasting details and this should be taken in consideration by

operations manager. Upon setting up a schedule, it will be necessary for the operations

manager to write down a START date and a FINISH date and then to record all things in-

between. The Estimations, can be made by calculating work hours by mentioning number of

workers, how many hours they can do, the budget of human resources and so on.

External suppliers

All communications shall be done by one person or one team to be responsible for it. - All the suppliers shall send regular updates on their progress.- Weekly reports shall be provided in specific times;

- The daily communication between the team and each supplier will be fundamental.

- Each supplier shall receive a timeline for delivery of components and parts.- Suppliers shall present frequent written reports to the team using different means such as the use of Intranet or electronic mail.

- Suppliers need to report any issue or problem to the coordinating team ASAP.- The team shall use the software of the project for coordinating the data and information that will be reported thereto.

- The communication plan shall include the necessary reports, the transportation to be used for shipping, dates of shipping, and times of delivery. Thus, it would be possible to mitigate the risks of communication errors.

Understand and evaluate the current supply chain management practices and suggest any improvement if needed.

787 Dreamliner’s project has poor supply chain management quality process not followed

production cost is high because of sourcing many suppliers and relocate from place to

another, unskilled workers and cheap place. Battery has dangerous effect on aircraft as it

could catch fire while travelling and miscommunication between departments and also

between management and suppliers. All of them above have caused failure on that project

also delay on delivery and aircraft accidents.

To improve the supply chain for Boeing they need to follow competitive performance

principles which can guide the supply chain manager

Responsiveness

Reliability

Resilience

Relationships

Project management that has to be designed to ensure Boeing completes the defects on

time with the help of a PERT / CPM diagram and a Gantt chart

Activity Start

after

Immediate

predecessors Completion

days

A- Cost None - 30

B- Selecting suppliers Start after A-Cost 20

C- Placing orders Start after B- Selecting suppliers 10

D- Receiving parts Start after B,C- placing orders 30

E- production Start after D- Receiving parts 60

F- Quality Check Start after E production 15

G- Storage of stock Start after F- quality 7

H- Marketing Start after ,G 80

I- Assembly Start after H, G- Storage of stock 10

J- Sales Start after G 90

Diagram 5.2 PERT/ CPM Network

A 3

B 2

C 1

D 3

E6

F 1

H 8

I 1

J 9000

G 07

Diagram 5.3 The Critical Path

(50,60) (182,262)

(50,60) (172,252)

(40,60) (150,165) (165,172)

(30,50) (90,150) (150,165) (165,172) (172,182) (252,262)

(60,90) (172 ,262)

( 60,90) (172,262)

The role of IT in the case of both Boeing and Airbus

I think that the role of IT in the Boeing 787 Dreamliner case was missing as per the researches which I did. In manufacturing companies they have devices or machines can check if all parts are fitted correctly or not to avoid any mistake from any worker, if Boeing had all these devices or technological machines, they would have found some mistakes. For example they had battery failure and engines failure as well which leads to big failure of Boeing 787 aircraft. The role of IT should handle all quality issues and implementing the all aircraft parts in the production processes

A 3

B 2

D 3

E6

F 1 I

1

J 9000

G 07

C 1

H 8

this to avoid any big disasters of creating an aircraft with issues. In Boeing case, I think that Boeing didn’t give much attention to this role.

Conclusions and recommendation

After this research I conclude what I have done and what I have noticed, there are many things which shall be taken into consideration upon the Boeing 787 Dreamliner design. Making sure that the quality has been followed for all manufacturing processes,. The operations manager reporting progress to the main shareholders is necessary to achieve the success. In addition, it is necessary to focus and track the cost of the project and to adhere strictly to the budget. It is important, as well, to improve the 787 Dreamliner project to the likings or even the toughest faultfinders. Regardless of the competition and potential difficult conditions, as operations manager of the Boeing 787 Dreamliner, the plan is to get this innovative and incredible aircraft off the ground successfully.

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youtube.com, 2016. Airbus A380. [Online] Available at: https://www.youtube.com/watch?v=9G5chRBmhQI [Accessed Jan 2016].

youtube.com, 2016. Boeing 787 Dreamliners. [Online] Available at: https://www.youtube.com/watch?v=rvkEpstd9os[Accessed Jan 2016].