Studied by: Abdul Qureshi Durgesh Patel Kunal Sanghvi
Boeing has changed in every way in the past couple of decades and it is now one of the most successful aircraft companies in the world. The company leads the industry with technology and innovation. In the long run, success was rewarding yet very hard to achieve. The multibillion dollar company faced many challenges as it matured throughout past few decades. Boeing has clearly gone through many strategic management and manufacturing challenges. Boeing is known for its large project management with its 777 jetliner. The company used the new philosophy of “Working Together” and management strategies like idea sharing, DBT and allowing customers/stakeholders to take part in the design process in order to make the 777 project successful. Business in the aircraft industry requires a lot of patience. The process of launching, manufacturing, delivering and reaching break-even point in the aircraft industry is very long as it takes years. During this time, the company can go wrong in every direction but the right decisions and the right actions will lead to success in the long run. The 777 project was a huge gamble but the company was rewarded heavily for it with remarkable sales which made it the leader in aircraft industry.
Table of Contents
Introduction & Background Boeing’s Philosophy Boeing’s Management DBT Additional Research - Now – 2010 The Result of 777 Project Bibliography RAM
BOEING Frank Shrontz, Boeing CEO, wanted to make the Boeing 767 a better jetliner in order to compete with Airbus. Airbus was ahead of the competition with its two-engine A330 and four-engine A340. These jetliners were 300-passenger planes and Boeing did not have similar jetliners to compete. In fact, Boeing did not have any plans to make these kinds of jetliners. Boeing also knew that upgrading the double-decker 767 was a bad idea because it would still not be able to compete with Airbus’s new models. After meetings and a lot of discussions, Boeing decided to dump the double-decker 767 project and plan for a new commercial jetliner that would be top of the line. The new 777 project was in charge Phillip Condit and it was announced in late 1989. By 2001, 325 Boeing 777s were flying in air. Phillip Condit faced a big challenge in managing the 777 project. He wanted the plane to be competitive and price and he also wanted to cut production costs. In order to do this, he came up with technological and managerial innovations that dealt with aircraft design, manufacturing and assembly. Condit strategized the 777 project and put in a lot of effort to make everything work. Doing business in the aircraft industry and making commercial aircrafts were risky things to do as failure was always around the corner. It was easy for an airliner company to fail with a new airliner. Success was rewarding yet very hard to achieve. In one decade, the number of commercial aircraft manufacturers decreased by 50%. There were four companies and then a decade later, there were two (Boeing and Airbus). The other two companies were McDonnell Douglas and Lockheed. Aircraft companies often failed because of the high cost in product development.
Total Number of Airplanes Delivered during 1995 1995-2001
Total Number of Commercial Jetliners Delivered by the Boeing Company, 1958 1958-2001
The product development of an airliner took years as it was a long process which cost a lot of money. An up-front investment of 15 billion dollars was required to develop a new airliner. front It took five to six years between launch and delivery of the plane. The company also had to maintain cash flow throughout the whole process. The company then had to sell at least 300 to 400 planes and 50 planes a year to make the money back and start making profit. Airliners prices money were based on high development costs. Once again, Boeing had strategized the development of these...