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Building the Boeing 787

In: Business and Management

Submitted By percival22
Words 1030
Pages 5
(GCM 5333)


Q1. What are the benefits to Boeing of outsourcing so much work on the 787 to foreign

suppliers?What are the potential risks?Do the benefits outweigh the risk?

Benefits :-

A. Outsourcing reduces the risks associated with technological gamble i.e. always abreast with latest design innovations. B. In return for a share of the work the partners would contribute towards the estimated $8 billion in development costs. C. Able to tap expertise of most efficient producers worldwide, hence driving downcost of making plane. D. Outsourcing some work to foreign countries will help to garner sales in those
E. Outsourcing the design of so many components could cut down time to develop aircraft to four years from six years.

Potential risks:-

A. Not being able to meet Boeing delivery schedules

B. Possibility of paying millions in penalty clause for late delivery.

C. Parts not assembled as required

D. Assembly instruction not available in English

E. Partners may outsource mission critical design work to other company

F. Other company might find it hard to meet Boeing quality standards

G. Since other company reporting to partners and not Boeing, it takes times for Boeing to know the problem

Benefits outweigh the risk:-

A. Provided much closer management oversight and coordination is required.

Q2. In 2007 and 2008 Boeing ran into several well publicized issues with regard to its

management of a globally dispersed supply chain. What are the cause of these

problems? What can a company like Boeing do…...

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