Boeing Strategy

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Group 9 Case Study (Chapter 10) Can Boeing Keep Flying High

Rekha Ghantal T. Alex Liu Sanjay Sampath Senthil Subramanian 1

Agenda
Introduction: Alex New Business Strategies : Senthil New Technology Strategies: Rekha Strategy Analysis and Future Prospects: Sanjay

2

Chronology of the Boeing Company
The Chronology of Boeing can be found at http://boeing.com/history/boeing/chr1_beg.html. Founder: William E. Boeing (1881-1956) March 10, 1910: Mr. Boeing bought a shipyard in Seattle which later became his first airplane factory. May 9, 1917 : the Boeing Airplane Company was named. World War II: B17 and B29 bombers 3

Chronology of the Boeing Company (cont.)
1958: Boeing 707, the first civilian passenger plane. 1969: Boeing 747 jumbo jet Recent Acquisitions: 1996: Rockwell International 1997: McDonnell Douglas 2000: Hughes Aircraft

180,000 employees currently
4

Boeing’s Business Lines
Aerospace, Defense and Communication Industries
Fighter jets, helicopters Missiles Satellites, GPS Flight instruments

Commercial Airline Industry
Boeing 707, 737, 747, 757, 767, 777 Airplane maintenance, flight training 5

Business Challenges
Airbus Industries: a Competitor in the Commercial Airline Industry 1971: Established by British and French governments. 1996: Decided to challenge Boeing for the jumbo jet market.

Airline Mergers and Bankruptcies The Effect of September 11.

6

Competition: Airbus A380 vs. Boeing 747-400

A380 # of passengers Cabin Operating cost 555 Double-deck

747-400 416

A second story “hump” 17% less than 747-400

7

Technical Challenges
Operational Inefficiency
Paper intensive processes. Manual work introduced errors. Lack of coordination among various engineering departments. Supply chain problems.

8

New Business Strategies
Shift Focus to Aerospace and Defense
Smaller airline market Merged ……. In 2002 Focused on Network Centric Warfare Air traffic management - GPS Paperless design model Process improvement program

Sonic Cruiser
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Process Improvement Program – DCAC/MRM
DCAC/MRM – Define and Control Airplane Configuration/Manufacturing Resource Management. Launched in 1994 – Streamline and simplify assembly.

10

Process Improvement Program – DCAC/MRM
ERP System – Baan Co. of Putten, Netherlands.
45,000 persons use this software over 70 plants

Forecasting Software – i2 Technologies Factory Floor Process Planning Software – CimLinc

Product Data Management Software – Structural Dynamics Research Product Configuration System - Trilogy 11

Other Process Improvement Strategies
“Moonshine Shops” – innovations to improve efficiency. Management working to standardize designs Result - Overall decrease in its 777 assembly time from 71 days to just 31 days.

12

Use of Internet
All purchasing done online - Saving of 20 to 27 percent. May 2000 – myboeingfleet.com 850 customers – can access 1.5 million engineering drawings, 70,000 maintenance manuals. Improved Customer relations, reduced the amount of papers exchanged. 13

Exostar – Global Net Marketplace
Join BAE Systems, Lockheed Martin, Raytheon Company and Rolls-Royce – launch of Exostar September 2000. Net Marketplace for aerospace and defense industry Goal – reduce costs, while making their supply chains more efficient. Standardized automated contracts cost reduced to $1.50 each from $150 manually. 14

Knowledge Management Systems
Implemented software from Primus Knowledge Solutions – Electronic Repository of answers to specified set of questions. Capture Engineers’ knowledge more easily. Accessed with a sophisticated search engine. Saves Service Engineers several hours per day.

15

Employee Portal
Summer of 2001 – rollout of employee portal. Company’s plan – to identify the best-of-breed products in use in various units and standardize company’s software on them. Employees - Aircraft Designers collaborate with other Boeing designers at home or abroad. Boeing...
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