Building the Boeing 787

Katarina Kingston, Berk Ozkan, Ben Nigh, Andrew Abdelnour

Boeing

Founded 1916- Seattle Washington

World's largest aerospace company

Leading manufacturer of commercial jetliners and defense, space and security systems

Top US exporter

Aerospace Industry

2 sectors: Commercial▪ Consists of companies that produce large

commercial aircraft, regional aircraft, and light aircrafts

▪ Boeing and Airbus▪ Demand: global economic activity, fuel

Defense▪ Consists of companies that produce aircraft,

engines, parts, equipment, weapon systems, etc▪ Lockheed Martin and BAE Systems▪ Demand: defense spending

Commercial Jet Industry

Duopoly Boeing- “first mover advantage” Airbus- European aircraft maker

“Airbus has made more jets and sold more of them than Boeing for years, but an analysis shows that trend has a good chance of changing in 2012.”

Boeing vs. Airbus- 2011 “Greatest International

Competition in Business”

2011 Unit Sales Boeing: 477 Airbus: 534

2011 Delivery Boeing: 82 superjumbo jets Airbus: 26 superjumbo jets

Boeing vs. Airbus-2011

2011 Units Sold Share Boeing: 36% Airbus: 64%

2011 Market Share Boeing: 48.5% Airbus: 51.5%

2011 Order Value Boeing: $66 billion Airbus: $70

2011 Total Revenue Boeing: $33 Billion Airbus: $32 Billion

Boeing 787 Newest commercial

jet aircraft

250 seat for long haul point to point flights

Made largely out of composite materials 80% 20% lighter

“Dreamliner”

Manufacturing StrategiesBOEING

Globally dispersed supply chain

Outsourced 70% of production 17 partners in 10

countries Role:

Design plane Market & Sell Final Assembly

AIRBUS

Distributed among 15 sites in Europe

Final assembly lines Toulouse, France Hamburg, Germany

Benefits to Outsourcing

Efficiency

Cost Reductio

n

Increased Sales

Reduced Developmen

t Time

Risks to Outsourcing

Reduces Jobs at Home?

Language

Barriers

Delivery Schedulin

g

Differences in

Quality Standards

Lack of Control

Who Will Win?

Recommendation

Boeing should limit their outsourcing

Improve communication Disallow partners to outsource their

work Choose reliable outsource partners Manufacture key components