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OM I Assignment
CASE ANALYSIS
Group 2
Akashjyoti Suni Ankita Srivastava Bhavesh Karandikar Keerthan G Preeti Gupta PGP2011523 PGP2011555 PGP2011591 PGP2011688 PGP2011793
1.1. History
Founded in 1916 by William E. Boeing, the Boeing Company built military aircraft, in its earliest days, for use in World War I. It began to prosper in 1920s and 1930s when civil aviation market expanded with increasing demand for mail carrying. Its focus was on research, experimentation, adaption to production and prompt improvements. For this, it originally relied on extensive vertical integration-manufactured planes itself, provided engines as well as bought and flew then through various subsidiaries. Later, it became highly focused following near disastrous experiences with its first wide-bodied jet, the 747. When introducing the 737 as well as the 747; management problems, declining productivity, steep development costs and unanticipated problems plus cutbacks in commercial and government orders compelled the company to become leaner and resolve problems with 737 and 747 programs. Eventually, Boeing emerged from the crisis, where it no longer assumed all the development costs itself, nor did it fabricate entire airplanes. Instead, it selected partners who were subcontracted portions of each plane and developed and built parts and subassemblies that Boeing later assembled. The nose section and wings, however, were exceptions that Boeing continued to build in-house.
1.2. Strategy
Variations Boeing manufactured families of planes, creating several variations on the same base airframe concept. It required o flexible designs, o inherent growth potential o modifications capability ( without need for wholesale revisions) Manufacturing Benefits Producing a common family of planes on a common assembly line accumulated experience and ensured that learning does not get lost. It led to far-earlier breakeven points. Facilities Large centralized facilities were provided with sophisticated manufacturing systems and project management tools. Expertise in global marketing Technological leadership Customer support Production skills
1.3. Culture
The culture of Boeing has a distinct identity of its own and many practices of the company were seen as characteristic of Boeing. Broadly, they can be understood as followsa) Teamwork Teamwork and cooperation were especially valued in the organization.
Operations Management The Boeing 767: From Concept To Production b) Inter-functional cooperation- Coupled with teamwork, inter-functional cooperation was ensured that was influential in addressing the very acute concerns of new plane programs, which were a prime vehicle for management development. c) Autonomy Considerable autonomy was given to teams but disciplined decision-making and detailed planning were strictly expected. d) Realistic schedules High priority was placed on meeting schedules. Realistic schedules were developed and monitored over time. This was done with help of certain tools Master Phasing Plan: mapped out entire development cycle for each new plane program Parametric Estimating Techniques: estimated costs and established relationships between critical sections of the schedule by using historical data drawn from earlier plane programs Management Visibility System: surfaced problems before they became serious enough to cause delays e) Regular Communication- encouraged ensuring prompt adaption and agility.
Operations Management The Boeing 767: From Concept To Production First detailed cost estimates were necessary to be obtained to make such a decision.
3. Production Management
All 767s were assembled in Everett, Washington, in the same facility used for 747s. Half of the building was devoted to assembly of major subsections; the other half to final assembly. In the final stages of assembly, a line flow process was used, with seven major work stations During the assembly, managers faced two critical tasks: Maintaining schedule, and ensuring that learning curve goals were met
4
Preparation For initial airlines contacts
Duration - 4 years
8
Authorize cost definition phase
7
Configuratio n selection
6
Approved market analysis
5
Secure commitmen t functional, engine, suppliers
Duration - 9 Months
10
7
Authorizatio n to offer Approve price/market/co st relationship
Sales review
5. Production Phase
6. Problem Statement
When the manufacturing of Boeing 767 was started, they inserted three-crew cockpit for as many as 30 planes. Then a new technology emerged and the advanced technology team suggested inserting twocrew cockpits instead of three crew cockpits. The airline pilot association argued about the dip in safety standards if such a design was introduced. Hence, a taskforce was convened and based on their researches it was concluded that 2-crew cockpits were a better option. Based on the findings the company decided to change all the 30 three crew cockpits to two crew cockpits. Dean Thorton, the programs vice president general manager got into a dilemma amongst the two options available for implementation of two crew cockpits. Completion of production and subsequent modification
Operations Management The Boeing 767: From Concept To Production Modification during production.
Production would continue as planned without delay and modification would be taken separately. One million additional labour hours were required for the modification plan.
Modification would be done in-line with the production. Two million additional labour hours were required for the modification plan.
ADVANTAGES
Learning curve and schedule would not be disrupted. Modification programme was separate and would not intervene with the normal flow of production. The functional testing process would not be affected due to the planned modifications. Problems could be identified and corrected on spot. Production would continue on the other sections of the plane. Once plan and part were available for two crew cockpits they would be incorporated within the flow of production. All parts were installed only once. The configuration would be more secure because of one time configuration.
DISADVANTAGES
Loss of Configuration- The integrity of the overall design would be compromised. If the modification was not executed properly, the planes operating system might be disrupted. Space constraint for the process of modification. The planes would have to be parked very close to each other which would violate their fire regulations. Installation of instruments associated with three crew cockpits would be halted. The original production plan would be disrupted. Learning curves would be disrupted. Functional testing would have to be done after the two crew cockpit was fully installed, hence, problems could have gone undetected.
7. Suggestions
After case study and analysis, the observation is that the manufacturing process and the subsequent modification should be carried out separately. Below are the reasons for considering the option: There are only 30 planes for which the modification to 2-crew cockpit is required. It would not be meaningful to disrupt the entire production line for the purpose. The labour hours involved in separate modification line is half of the labour hours required in the in-line modification. Since Boeing has to stick to the deadlines, they need to choose the best option. One of the airlines company still needs a 3 crew cockpit. Hence, it would be easier to build the 3crew planes and then supply the company and modify the leftover planes rather than modification during production. Functional testing would be a major problem if the modification during production, as there may be chances of issues going undetected. The learning chart and the schedule would remain unchanged reducing the re-planning costs.