Change Management at Boeing
CHANGE MANAGEMENT at BOEING : AN ORGANISATIONAL DEVELOPMENT PERSPECTIVE
When a company invests in a project, it projects the RoI and does the cost-benefit analysis.
Boeing’s ambitious Dreamliner project was supposed to be executed the way Boeing had done it for decades together – by building the aircraft in-house. However, after the 2011 terrorist attacks, air traffic plunged and so did the demand for aircraft. The idea of investing USD 10 billion to develop a new plane seemed hurting as the market had become highly vulnerable to global external factors. Hence, the company had to go for the outsourcing route enabling it to share costs of manufacturing and more importantly the risks.
There was a change in the Strategy of the company and considering the situation, the decision proved right to a certain extent. However, outsourcing meant dealing with partners in different countries with different culture, structure, systems and style of working. The Control on processes that Boeing enjoyed previously, was shared with the partners around the globe and thus the company had to be highly dependent on the suppliers for the delivery of the parts. Quality also became an issue as the suppliers were not ready to manage sub-contractors or get the designed approved by safety authorities. Also, the production capacity could not be increased by the suppliers fast enough. There was a System flaw in the change management process.
When a company decides to change its structure, strategy and systems, it needs to plan it well and execute gradually step-by-step. After the failure of the outsourcing model, Boeing has taken steps to control the process of assembly of the aircraft. It took a part of the programme in-house. It also bought stakes in the supplier companies to take control of the management. The company brought in engineers from the other divisions of the company.
Point A to Point B shift means a shift in the output of the product, which is brought about through
When a company invests in a project, it projects the RoI and does the cost-benefit analysis.
Boeing’s ambitious Dreamliner project was supposed to be executed the way Boeing had done it for decades together – by building the aircraft in-house. However, after the 2011 terrorist attacks, air traffic plunged and so did the demand for aircraft. The idea of investing USD 10 billion to develop a new plane seemed hurting as the market had become highly vulnerable to global external factors. Hence, the company had to go for the outsourcing route enabling it to share costs of manufacturing and more importantly the risks.
There was a change in the Strategy of the company and considering the situation, the decision proved right to a certain extent. However, outsourcing meant dealing with partners in different countries with different culture, structure, systems and style of working. The Control on processes that Boeing enjoyed previously, was shared with the partners around the globe and thus the company had to be highly dependent on the suppliers for the delivery of the parts. Quality also became an issue as the suppliers were not ready to manage sub-contractors or get the designed approved by safety authorities. Also, the production capacity could not be increased by the suppliers fast enough. There was a System flaw in the change management process.
When a company decides to change its structure, strategy and systems, it needs to plan it well and execute gradually step-by-step. After the failure of the outsourcing model, Boeing has taken steps to control the process of assembly of the aircraft. It took a part of the programme in-house. It also bought stakes in the supplier companies to take control of the management. The company brought in engineers from the other divisions of the company.
Point A to Point B shift means a shift in the output of the product, which is brought about through