The Dreamliner: The End of Innovation?

Boeing’s 787 Dreamliner finally made its first commercial flight on October 27, 2011. This flight had been highly anticipated, as the 787 is the first airliner to be made largely of composite materials, for significant weight reduction. Less weight means less fuel used (20% less, according to Boeing), which is a huge reason why close to 800 orders for this innovative aircraft have been placed.

First Dreamliner flight (ANA photo)

The 787 has been in development for about eight years. At the time of its first delivery – to All Nippon Airways, at the end of September – the 787 was three years overdue. Countless project delays have already cost Boeing billions of dollars, according to industry estimates.

When Dreamliner development began, the economic outlook was considerably brighter than it is now. The outlook for commercial aviation in 2012-2014 is mixed, On the other hand, think what might’ve been if Boeing had delivered the plane on time…just as the US housing bubble burst, which pushed the US (and, ultimately, the world) into recession.

Boeing claims orders for the 787 are still strong, though they have been hit with a sizeable number of cancellations recently. But regardless of the outcome – which I truly hope is a positive one, for all concerned – I have three questions about this massive undertaking:

  • Was it worth the wait?
  • Could Boeing have done a better job of controlling its outsourcers?
  • Will Boeing’s experience put a damper on innovation?

WAS THE 787 WORTH THE WAIT?

In the mind of someone on the first flight, between Tokyo and Hong Kong, it was worth around $34,000 US to be witness to such an historic occasion. Charity auctions aside, everyone on the ANA flight who was asked expressed their delight with the cabin, from the much larger windows to the increased headroom to the level of comfort in all sections.

I’m doubtful that sense of euphoria will carry over to subsequent flights. From this moment forward, Boeing will start ramping up production, hoping they can meet their goal of 10 planes per month before the end of 2013. This will not be an easy goal, considering they have outsourced most of the production, some of it beyond US borders. Where many manufacturers are looking to make their processes “lean“, Boeing seems to have headed in the other direction.

WHAT ABOUT THE OUTSOURCING?

In aircraft manufacturing, safety and quality are equally important. Manufacturing processes have to be tightly controlled by the prime contractor and all subcontractors. Moreover, the prime contractor bears the ultimate responsibility for all quality and safety issues, according to AS9100 and various airplane safety regulations.

Any manufacturer can exercise much greater control of processes when they are all under one roof, as opposed to being spread out across two or more facilities. Given that it’s not just several facilities but several countries (including Japan, Italy, South Korea, France, Sweden, India, and the USA) involved in 787 production, the degree of difficulty of ensuring complete process control seems enormous. And with the work being spread out across several continents, it’s really, really hard to believe anyone could call Boeing’s production of the 787 “lean production” with a straight face. Quality control is an ongoing concern, also. Maybe the extent of the outsourcing should’ve given Boeing pause for thought.

WILL FEWER COMPANIES BE WILLING TO INNOVATE AS A RESULT OF BOEING’S EXPERIENCE?

Most innovation takes place on a small scale. It’s easier to control the innovation process when it starts and remains small, it’s less expensive to think and operate small, and one of the keys to product quality (defined in ISO 9001) is incremental and continual improvement. The Dreamliner project was never small, and there is a lesson there that other companies should keep with them always. The level, degree, and scope of innovation must be mirrored in the project planning and design.

Fewer companies innovating? I hope not.

REFERENCES

  1. Gates, Dominic, “Boeing Celebrates 787 Delivery as Program’s Costs Top $32 Billion”, Seattle Times, 25 Sept 2011 – http://community.seattletimes.nwsource.com/mobile/?type=story&id=2016310102&
  2. Hiltzik, Michael, “787 Dreamliner Teaches Boeing Costly Lesson on Outsourcing”, Los Angeles Times, 15 February 2011 – http://articles.latimes.com/2011/feb/15/business/la-fi-hiltzik-20110215
  3. Isidore, Chris, “Worth the Wait: Boeing 787 a Hit with First Passengers”, CNN-Money Online, 27 Oct 2011 – http://money.cnn.com/2011/10/26/news/companies/boeing_787_dreamliner/index.htm
  4. Kim, Jack, and Yan, Fang, “Boeing Sees More Cancellations; Still Upbeat”, Reuters, 18 Oct 2011 – http://news.yahoo.com/boeing-sees-more-dreamliner-cancellations-still-upbeat-053554883.html
  5. Peterson, Kyle, “Long-Delayed Boeing Dreamliner Ready for Prime Time”, Reuters, 23 Sept 2011 – http://www.q13fox.com/news/kcpq-longdelayed-boeing-dreamliner-ready-for-prime-time-20110923,0,5040322.story
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