Boeing Case Study

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Building the Boeing 787

Boeing's newest commercial jet aircraft, the wide-bodied 787 jet, is a bold bet on the future of both airline travel and plane making. Designed to fly long haul point-to-point routes, the 250-seat 787 is made largely out of composite materials such as carbon fibers, rather than traditional materials such as aluminum. Some 80 percent of the 787 by volume is composite materials, making the plane 20 percent lighter than a traditional aircraft of the same size, which translates into a big saving in let fuel consumption and costs. The 787 is also packed full of other design innovations including larger windows, greater headroom and state-of-the-art electronics on the flight deck and in the passenger compartment.
To reduce the risks associated with this technological gamble, Boeing outsourced an unprecedented 70 percent of the content of the 787 to other manufacturers, most of them based in other nations. In contrast 50 percent of the Boeing 777 was outsourced, 30 percent of the 767, and only 5 percent of the 707. The idea was that in return for a share of the work, partners would contribute toward the estimated $8 billion in development costs for the 787. In addition, by outsourcing, Boeing believed it could tap into the expertise of the most efficient producers wherever they might be located, thereby driving down the costs of making the plane. Furthermore, Boeing believed that outsourcing some work to foreign countries would help it garner sales in those countries. Boeing's role in the entire process was to design the plane, market and sell it and undertake final assembly in its Everett plant in Washington State. Boeing also believed that by outsourcing the design of so many components it could cut the time to develop this air craft to four years, from the six that is normal in the industry.
Some 17 partners in 10 countries…...

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