The Effects Of Outsourcing On Boeing S Production Quality
Boeing’s 787 Globalized Manufacturing Strategies
An Analysis of Boeing’s Outsourcing Strategy Against the Severe
Manufacturing Problems Encountered by this Approach by Florida International University
ACG3301
Prof. Carmenate
April 12, 2014.
Just in 2013, the United States outsourced 2.3 million jobs to a diverse range of countries around the world, to say that it’s a popular measure its an understatement (Statistic B, 2014). Outsourcing is the commission of a task to a secondary party, often located in a foreign country, in order to achieve a competitive advantage. The reasons behind the implementation of an outsourcing strategy vary upon each company’s individual circumstances. In the case of Boeing’s 787, the implementation of an outsourcing strategy provided a key manufacturing advantage and a substantial cost reduction maneuver. Competition among companies, is considered to be the main factor behind outsourcing and because of globalization, this practice has become ubiquitous in corporate environments. Airbus, the main competitor of Boeing, manufactures their aeronautical components throughout Europe and consequently assembles them at a single location; this method provided Airbus with a significant increase in production capabilities. Boeing, following the Airbus manufacturing strategy, intended to achieve the same productivity benefits through a globalized component manufacturing strategy for the 787 Dreamliner, the company’s latest model. As a result of the competition between this two aeronautical titans, Boeing adopted a true global manufacturing strategy in which they produce the components for the 787 in a diverse range of companies in ten different countries (Mouawad, 2014). As a result of Boeing’s heavy dependence on global outsourced manufacturing, they have achieved remarkable economic benefits for the 787 divisions, on the other hand, the unavoidable limitations of outsourcing has brought them severe repercussions do to subpar
An Analysis of Boeing’s Outsourcing Strategy Against the Severe
Manufacturing Problems Encountered by this Approach by Florida International University
ACG3301
Prof. Carmenate
April 12, 2014.
Just in 2013, the United States outsourced 2.3 million jobs to a diverse range of countries around the world, to say that it’s a popular measure its an understatement (Statistic B, 2014). Outsourcing is the commission of a task to a secondary party, often located in a foreign country, in order to achieve a competitive advantage. The reasons behind the implementation of an outsourcing strategy vary upon each company’s individual circumstances. In the case of Boeing’s 787, the implementation of an outsourcing strategy provided a key manufacturing advantage and a substantial cost reduction maneuver. Competition among companies, is considered to be the main factor behind outsourcing and because of globalization, this practice has become ubiquitous in corporate environments. Airbus, the main competitor of Boeing, manufactures their aeronautical components throughout Europe and consequently assembles them at a single location; this method provided Airbus with a significant increase in production capabilities. Boeing, following the Airbus manufacturing strategy, intended to achieve the same productivity benefits through a globalized component manufacturing strategy for the 787 Dreamliner, the company’s latest model. As a result of the competition between this two aeronautical titans, Boeing adopted a true global manufacturing strategy in which they produce the components for the 787 in a diverse range of companies in ten different countries (Mouawad, 2014). As a result of Boeing’s heavy dependence on global outsourced manufacturing, they have achieved remarkable economic benefits for the 787 divisions, on the other hand, the unavoidable limitations of outsourcing has brought them severe repercussions do to subpar
References: Chakrabortty, A. (2013, April 23). Apple: why doesn 't it employ more US workers?. The Guardian. Retrieved from http://www.theguardian.com Fontevecchia, A. (2013, May 15). Boeing Bleeding Cash As 787 Dreamliners Cost $200M But Sell For $116M. Forbes Online. Retrieved from http://www.forbes.com Mouawad, J. (2014, March 7). Wing Cracks Delay Boeing 787 Assembly. The New York Times. Retrieved from http://www.nytimes.com Statistic Brain, Job Outsourcing Statistics. (2014). Outsourcing Statistics [Data set]. Retrieved from http://www.statisticbrain.com