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

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


Chronology of the Boeing Company
The Chronology of Boeing can be found at 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

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.


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


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


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

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


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.


Use of Internet
All purchasing done online - Saving of 20 to 27 percent. May 2000 – 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.


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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