A ‘prescient’ warning to Boeing on 787 trouble – The Seattle Times: In a late January appearance at Seattle University, Boeing Commercial Airplanes Chief Jim Albaugh talked about the lessons learned from the disastrous three years of delays on the 787 Dreamliner.
One bracing lesson that Albaugh was unusually candid about: the 787’s global outsourcing strategy — specifically intended to slash Boeing’s costs — backfired completely.
“We spent a lot more money in trying to recover than we ever would have spent if we’d tried to keep the key technologies closer to home”…
…at least one senior technical engineer within Boeing predicted the outcome of the extensive outsourcing strategy with remarkable foresight a decade ago.
“Yet that startlingly prescient 2001 paper focused on business economics. Where did a structures engineer get that kind of expertise?
“It’s common sense,” Hart-Smith said.
///////////I’m no expert and I know its “common sense” that you outsource parts/services AT THE EXPENSE of efficiency/cost in order to get something else in return. For military, its to get congressional support in the districts that get involved. For non-military it is quite often to avoid competition that you can’t stop any other way–ie, a blackmail payment.
Some of this stuff really is “obvious” as would be a look back at the size of the old CEO’s parachute? USA Corp Exec’s are out of control in a good old boys network of obvious self dealing and corruption. And nothing will be done about it.
We are all doomed.
Pedro, are you No 2?
Hee, hee.
# 2 pedro – Yes, Pedo, the Boeing company made some bad choices in a free market. Not at all like the closed competition of Airbus to provide, say, military aircraft to it’s “stockholder” nations. Have they yet delivered the A400 military transport? Not even basically new technology and, last I heard, they were US$17 billion over budget. Wasn’t a lot of that because each member country got to build a bit of the plane and then they shipped it all to the central plant for assembly? Of course, that’s not outsourcing is it?
Listen Pete, there’s a lot wrong with the US but there ain’t much right with the EU, either. So, please stop taking cheap swipes at us, you European git.
Pedro–its true you waffled all over the place in your equivocating, talking out of both sides of your mouth, trying to leave yourself wiggle room and not stake out a position – but in fairness your main point was, and is, that “Airbus seems to be doing better than Boeing.”
I googled and there are cost overruns in every project the EU has from 7-10 Billion US for the Airbus 400, which is a turbo prop for christ sakes ((although that feature is more fuel efficient at low altitudes and generally considered more “robust” a design–but still not leading edge technology)). Add up the overruns on their other projects and what have you got? You are right: not a bucket of sunshine–so “exactly” how is Airbus doing “better?” Ah Crap: doing “better”? Yes, you did hedge your evaluation, maybe it was only the momentum of your animosity and small mindedness that took you across the foul line?
Please educate Animby and myself?
Development costs in some states would be loss attributable for taxation purposes. The US tax payer might end up paying for their screw up.
I’d be OK with giving Boeing the same subsidies Airpus gets. The non-repayable loans Airpus receives are pretty sweet… French and German taxpayers get ripped off, but lots of jobs are created and lots of European metal is up the air. If we’re to be in the corporate welfare business, let’s follow the French model.
So I guess the bean counters were dumb? You know its much like automobile assembly. Air plane manufacturing I think goes much better when your parts are closer to the assembly plant. Why would anybody think different? Because they thought they could get the part itself cheaper! That in itself would justify the added travel expenses. But I gues not.
Offsets=Bribes
Fuck you Bobbo!
You take a story about the economics of outsourcing and immediately hijack into an inane discussion about how you were first to comment and shit like that.
Eat shit and choke on it.
As for the rest if you, stop encouraging him.
—-
I’m really not impressed with off-shore outfits. Communications are too problematic.
The last job I worked at was for an off-shore IT out-sourcing firm.
While they thought they were doing great, they were doing very mediocre work.
They were well trained, but it was for techniques that we had already left behind years earlier.
I’d still be there but the bank decided to cancel the project. I stayed there providing essential maintenance services (smoking cigars and having the occasional cognac with my buddies down at the cigar shop.)
Since it was written in Smalltalk and there was no new software development going on, it was ten months of sitting on my ass, nursing rock-solid software, keeping my dick out of the works, while the bank wasted their time and money creating something that worked worse.
Before that was the Y2K conversion where I write some Smalltalk code which scanned program COBOL source text, re-constructed the memory mapping to discover if there were any problems with it, applied patches and built a cross-index dictionary of the recompilations that would have to be done.
I wrote the Smalltalk code in three days. It scanned all of the source, applied all of patches and wrote the JCL for recompilation in twenty hours. It then kicked off all the mainframe jobs in twenty more hours.
Those off-shore out-sourcers were still trying to get the internet connection working.
We canceled the contract.
So bunch of tech guys are upset about losing their jobs to cheaper competition in other countries, and are using a completely unrelated story about aircraft, which just uses the same name outsourcing, to prove their point? If I were a tech company CEO, or someone who outsources my call center, why would this story convince me of anything?
I would think the main economic problem with outsourcing is that the Chinese will steal the technology and then you won’t have a company left in 20 years.
The US can do it we just need mgmt with some backbone.
Airbus’s multi-location strategy for A380 parts and assembly didn’t make much sense either. If it wern’t for tax breaks from the countries involved, I doubt they’d even try it.
#19 – Yes it’s mostly political but the number of assembly plants has been reduced. That part of the 787 production wasn’t a big problem either – buying the wings from Mitsubishi and the engines from GE is the same as the A380 getting the wings from BAe and the engines from RR.
Boeing also did this for the same money reasons – it couldn’t afford the design and tooling costs for the wings. In the same way that 40years ago it couldn’t afford to develop it’s own engines.
The big problem came from the long complex supply chain of sub-contractors on every tiny component with Boeing ultimately having no control, or even knowledge, of where and how they were being made.
This is perfectly normal in some industries where the parts are interchangeable – Boeing doesn’t need to care who is making rivets (although in this case it did!) – but it does need to know the company making it’s avionics software (which it didn’t)
Nobody – your post reminded me of a line from Armageddon: “…a thing with 270,000 loose parts that was built by the lowest bidder.”
“…at least one senior technical engineer within Boeing predicted the outcome of the extensive outsourcing strategy with remarkable foresight a decade ago.”
And I take it that was the only engineer who lost his job, right?
The 787 is a fascinating history of the specifications of the product getting away from the inception.
In the Airbus case the idea was to split things up from the get go. Compound the problems of the 787 and add shipping hassles.
Whether its a plane, a car or software feature creep happens. (Software is the hardest to maintain control of because every busybody with an agenda thinks it can do anything because its not bound by the laws of physics. [see The Mythical Man Month by Frederick P. Brooks, Jr.] Those ass-hat managers can take a project and turn it into a career.
At least with hardware you can detect fairly easily whether it works or not because the pieces fit or they don’t.
That was the point behind the development of the Pontiac Fiero which was intended to prove the viability of just-in-time provisioning.
The pieces all fit and could be made on time to be assembled at a plant to deliver a car.
If you are able to maintain strict quality control, you can manufacture anything anywhere and assemble it.
Good fuckin’ luck…
The assembly is also dependent on getting the right pieces coming together at the right time, and that’s the part everybody’s in a tizzy about.
If your parts are coming from all over the map, the possibility of a screw up just getting the parts through the transportation logistics increases by an order of magnitude per assembly.
Its less of a problem with ship building, like at the Arendal Yards in Gothenburg.
You can’t really assemble a ship without a keel and a hull and you don’t want to even think about moving a partially assembled ship. (It can’t float. 🙂
Ship fitting, assembly of the parts of ships, happens in close proximity to the shipyards in towns like Gothenburg or Newport or (Google them yourself but there’s some near Vladivostok, some in Japan, Korea, China, some on the west coast.)
Two different companies in two different countries, only thing in common – both making airplanes. Golden rule of comparing anything, you are never comparing like with like. Truth is, they have both made major cock-ups – but for different reasons. So having dealt with that, what can we learn. The one thing they have in common is crap management – you know, the ones who have to be highly paid because they ‘take such risks’ So why are they not the ones who pay the financial penalty? Well, we know it’s because they ‘went to the same school’ or, in europe because they are members of the ‘funny handshake’ club (freemasons for those who don’t understand). Whichever, or whatever the reasons, they remain as the single most influental of those responsible for failure. Management is the curse of modern society and industry. The enablers of failure again and again who seldom seem to be held accountable – sadly.
Go NAFTA!
Boeing had a quite successful approach to design and develop the 777, including a strong supplier management approach with insightful QC. Doing it well takes hard work.
Outsourcing the hard work to someone else but measuring them on cost is a recipe for disaster.
@MikeN #16 for the win with this quote:
“I would think the main economic problem with outsourcing is that the Chinese will steal the technology and then you won’t have a company left in 20 years.”
So what.
All you clever dick ‘I did it in 3 days’ IT fools must know by now that your industry is DEAD. Slaves will be employed now, and they don’t give a toss about implementation details nor whether it was written in Chinese.
Such examples like airplanes are exceptions, no maybe they too will be built exclusively in the mainland, the expected china-quality will eventually be ironed or crashed out.
#24
Oh I am so tired of management complainer fools. What mental disorder or vise is going on here? This problem is yet another barrier to comprehending current reality.
Most managers have some degree of competency. They DO work under certain conditions
– budget constraints
– idiotologies
– ladder toplogies
The main idiotology is the disconnect between producer and consumer. The consequences are fast approaching.
#10–Pedro==I don’t see any defense of any corporation. What I see is you claiming Airbus is doing a better job ((ok==less bad?)) of building their airplanes (on time, on budget, leading tech?) than is Boeing. Animby took you to task for that so I looked it up hoping to catch Animby being loose with his facts, and to educate myself since I stopped reading about airplane development since the weak struts of the C-5 debacle, but as usual, he was quite accurate. So, I ask you for additional info and you come back with an irrelevant passe.
#15–Peepod, student of PedoMule==Just as I never defended any/either corporation, I never made any claims about being “first” at anything which in most imaginings would be irrelevant to any subsequent point? I do enjoy the energy you put into dissing me though and I look forward to something closer to the bone rather than blow back on your face? Heh, heh. My perception is this all started a few weeks ago when I disagreed/made fun of you on a particular issue and now you are gun’s a blazing to insult me? Why bother? Realize that every day you wake up is another wasted chance to redefine who you are. You get love when you give love. Same with hate. Or stupid.
Think of every new thread as a new day in your life. What do you want back from it?
Lots of good thinking above regarding the problems of outsourcing. I will quibble with #29–cgp==”The main idiotology is the disconnect between producer
and consumer.” I don’t think that is true “generally” nor moreso as it applies to commercial airliners? The construction of the concern fits several other very important social issues, but not consumerism. In consumerism, most disconnects I can think of all benefit the manufacturer’s as by and large the consumer has no choice, and never will, excpet between the big manufacturer’s. We consumers can’t make our own ipods, so the “free market” is very structured, and very limited and while we are being screwed at every turn, I don’t see any consequences from it.
What consequences do you see?
I’ve never bought into the “small businesses create X% of jobs in the USA.” No specific reason–just don’t immediately parrot what I am told. So, on Morning Joe it was the first time I’ve heard something that makes sense from the beautiful Erin Burnett: “small business job growth only happens when big business grows. Boeing ((just a coincidence)) has 1000’s of small business suppliers, so you need big business to do well for small business to do well.”
Remembering more fully, its always just struck me that the BS about “small business” was an intentional diversion of attention from the welfare big business draws done and a clever way to blame “the small guys” for what is wrong in our economy.
Very clever. We are all doomed.
# 21 – originally a quote from Alan Shepard – when asked what he was thinking of as he waited for the launch of his rocket. “Every part in this big pile of explosive was built by the lowest bidder!”
It wasn’t so much the lowest bidder that was the Boeing problem – it was that there was no understanding of how deep the supply chain had gone. Items that were on a critical path didn’t get noticed because a supplier to a supplier to a supplier had failed.
Their managers were only talking to the first level sub-contractors who themselves had no idea who was actually making the parts.
And how Boeing thought they were going to assure the supply of spare parts over the typical 30-40 year life of a jet model range is anybodies guess.
The car industry which has a similar production issue is careful to outsource to a few well controlled sub-contractors and to talk to them regularly.
This isn’t purely a Boeing issue of course.
The fiasco at Heathrow’s (london) new terminal was partly caused by the baggage system software being left in test mode at the opening. It took 3 days to switch this off – not because of any technical difficulty, but because it took that long to work out who, in the maze of companies, government departments and sub-sub-sub contractors, had the authority to order the change !
I have an idea. Let’s build it here and hire H1b foreigners to build it. That way the American managers can keep a closer eye on them.
When I say
”The main idiotology is the disconnect between producer and consumer.”
I mean it as the profound cause of what is coming next. A bad airplane maker outsourcing outcome does not change anything.
It is general as in all entrepreneurs now do not and despite recent public callings, will not change the ‘make it in china’ mode of operation. The 20 dollar per hour income is out yet 20 dollar per hour spending is still expected. Witness the one-percenter market develop as foreclosures ruin whatever wealth your nation had in the previous 70 years.
One question I have is when the American sovereign default occurs and your balance of trade is finally balanced will you and the rest of western civilisation be able to rebuild?
I seriously doubt it. Training in very high level manufacturing skills has not occurred for 50 odd years. Forget about nuclear plants nobody will be willing to build them for you, your international credit will be zero. Your people are now drugged, tone deaf fools looking for the easy money. Perhaps the immigrants you all want out will save you.
#32 did Alan Shepard ever then explain how you get
$4000 bolts?