Advanced Engineering Economics
The Boeing 787 Dreamliner is one of the largest aircrafts in Boeing Company. The Boeing’s newest project has caused company with many problems. The biggest problem of Boeing 787 is over-outsourcing. In fact, Boeing 787 launched global outsourcing strategy by focusing on the components that were outsourced by foreign suppliers such as China, India, and Italy and so on. Boeing 787 planned to build the fuel-efficient new aircraft and cut off some costs of production from outsourcing. However, because of too much out sourcing, Boeing has faced with 3-years-delay construction since the first delivery schedule in 2007. As a result, Boeing has already been charged with 12 billion of penalty cost. Boeing still needs more managing plan in order to fix the technical problem and avoid the cause of further delay. The purpose of this paper is to discover the mistake in business strategy of Boeing 787 and propose an alternative solution by comparing with Boeing 777 project which had no history of penalty payment as a benchmark in order to prove whether Boeing 787 would be a better project if it reduces outsourcing scale as in Boeing 777.
Mudavadi, Caroline; Nafisi, Jamshid; Pakdeekasem, Pinprapa; Pornsatit, Chakaphan; and Chiamsiri, Vorakarn, "Boeing 787 Financial Approach" (2011). Engineering and Technology Management Student Projects. 690.