Outsourcing main cause for Boeing 787 Dreamliner problems

22 January 2013 Consultancy.uk

The flagship of Boeing, the new 787 Dreamliner has taken a beating in recent weeks. After a series of serious incidents, the U.S. aviation authority FAA decided last Thursday to ground all Dreamliners worldwide. While inspectors and experts from Boeing are busy searching for solutions, there are reports about the possible causes. Experts agree on the suspected main cause for the problems: Outsourcing. The American engineers union SPEEA is suggesting that the outsourcing of certain production processes is the likely cause of the problems. 

The Polish airliner LOT is the only airliner in Europe who currently has the Dreamliner in operation. Last year Air France - KLM announced that it ordered 25 Dreamliners, delivered from 2015  

Outsourcing

The production of the Dreamliner is one of the most advanced processes within the aviation industry. To make the production as cheap and efficient as possible, Boeing outsourced a large part of the process. The Dreamliner is produced at as many as 135 sites by 50 subcontractors. According to an estimate from Washington Post, more than 40% of the Dreamliner's components come from overseas - in comparison, Boeing's acclaimed 747 aircraft had only 5% foreign-components. Most components come from France, Japan, Italy, Sweden, the US, and the UK.

Boeing 787 Dreamliner

Boeing 787 Dreamliner

The disadvantage of the high degree of outsourcing in terms of aircraft safety is two-fold. Firstly, it drastically increases the complexity of the production process and therefore poses a challenge to testing the integration of key components. "Some of the pieces manufactured by far-flung suppliers didn't fit together" a former Boing engineer admits to an American Newspaper. Particular in the area of aircraft electronics co-dependence between elements is crucial for safety. Secondly, reliance on foreign suppliers meant that Boeing had to believe their word on the quality of products. As qualified experts are very scarce, this brings along a large risk as aerospace consultant Scott Hamilton points out: "There aren't that many qualified experts in the market. How can Boeing be sure that they are given what is promised?"

High Risk Outsourcing

Analysts have always been weary of outsourcing production in the aerospace industry due to the high risks involved. A few years ago McKinsey & Company released a report in which it warned the industry for the negative consequences of the trend. "To an alarming degree companies choose to outsource their operations and arrange their supply chains in low-cost countries without properly assessing an integral business case. There is unfortunately too much flock behaviour in the aerospace industry" according to the strategy consulting firm. In the coming weeks it will gradually become clear what exactly is wrong with the 787.

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