Boeing is the largest aerospace company across the globe and the leading producer of commercial jetliners as well as space, defense, and security systems. Since the firm is a top American exporter, it supports airlines and American and allied customers in approximately 150 countries. The firm's products and customized services include commercial and military weapons, launch systems, satellites, aircrafts, electronic and defense systems, advanced information and communication systems, and performance-based training and logistics ("Boeing in Brief," 2013). Boeing's status as a leading firm in this industry is attributed to its long tradition of aerospace innovation and leadership. In addition, the firm continues to increase its product line and services to address the emerging needs of customers. The company's ability to develop a wide range of capabilities is attributed to its relatively effective operations management that contributes to the success of its operations.
Boeing's Management Planning:
Boeing's product line and services basically revolves around aero planes, defense and communication systems, and aviation-related support services through which the company targets airlines and military department. One of the major factors that has played a crucial role in the success of the firm and effectiveness of operations is technology, which has and will continue to be a central aspect of the company's management planning. Management planning is an important aspect of Boeing's operational, tactical, contingency, and strategic planning. This aspect is affected by various factors such as legal issues, corporate social responsibility, ethics, innovation, competition, and economic conditions.
Boeing's management planning process consists of various steps including analysis of the situation through evaluating past events, examining the present situation, and attempting to predict future trends. This step is followed by establishing goals and creating options that will help in the accomplishment of goals. For instance, since the main goal of Boeing is to enhance its status as the largest civil aircraft maker, the management established objectives that were relevant to its mission of being the dominant aircraft manufacturer (Moon, 2010). Some of the major plans adopted by the management include innovative aircraft concepts and designs. The third step is evaluation of the established goals to identify probable effects, advantages, and disadvantages of every objective or goal. This is followed by selection of the most appropriate plans and decisions on how to execute the plans. Upon the implementation of the plans, the management assesses and controls performance across every level of Boeing's structure. In cases where problems arise during implementation, the firm's management will establish and redirect operations towards a desired objective.
Forecasting and Capacity Planning:
Operations management at Boeing is centered on three major aspects i.e. design, evaluation, and improvement. This process involves several major components such as forecasting, capacity planning, designing of work systems, location planning, just-in-time systems, aggregate planning, scheduling operations, and project management. Forecasting is described as predicting future demand of a product or service that is accompanied by designing new products or services or redesigning existing ones.
Boeing performs forecasting by developing the current market outlook, which is the firm's long-term prediction of airplane demand and air traffic volumes. Since forecasting has numerous significant practical implications, it helps guide Boeing's product strategy and offer directions for long-term business planning in the company. Notably, Boeing has continually shared its forecast with the public since early 1960s in order to assist airlines, suppliers, and the financial sector to make informed decisions. In order to predict future demand of its products and services, Boeing considers the impacts of existing business conditions and developments in its evaluation of the long-term drivers of air travel. Boeing's forecast details incorporate demand for freighter and passenger airplanes in terms of fleet growth and replacement of airplanes that retire during forecasting. In its resent forecast, the company has projected an increase in the demand for conversion of passenger to freighters ("Current Market Outlook," 2013).
Boeing not only examines the trends of air travel but also considers the shape of the market and the response and adaptation of airlines. Some of the notable aspects of Boeing's recent forecasting include profitability challenges due to the effect of fuel prices, increasing fuel efficiency, increase in single-aisle market share, and broadening geographical diversity. The main forecast indicators for Boeing include emerging economies, new airline business models, global growth brought by emerging economies, business models, and airline strategies. Fleet development and passenger traffic also play a crucial role in the firm's forecasting process.
In contrast, capacity planning is defined as realizing alignment between a production or service capacity of a firm, a department, a machine, or a service unit and the forecasted demand level. Capacity planning is an important element of operations management because poor planning has significant consequences on a firm's operations and profitability. This process involves aggregate planning, which helps in determining resource capacity to meet demand with 6-12 months in the future. Through this concept, Boeing establishes a company-wide plan for distributing resources and builds an economic strategy for meeting the demands.
Similar to many companies, Boeing performs capacity planning through supply chain management and inventory management. In the past few years, Boeing has experienced several challenges in capacity planning because of supply chain management issues. These issues are attributed to the company's complicated outsourcing of supplies and wide range of different suppliers. As part of streamlining its supply management and enhancing capacity planning, the firm spent approximately $1 billion in acquiring state-of-the-art supply chain to effectively monitor supply and meet its own demands easily. However, this initiative was largely ineffective because of Boeing's constant innovation of new products and the need to identify the right individuals to make the highly-specialized parts into the desired finished product. Therefore, the company requires a strategy that gives it more control over supply chain to enhance capacity planning. The most appropriate strategy is a vertical supply chain structure and increased focus on development timeline (Sam, 2012).
Capacity and aggregate planning initiatives are also combined with location planning, which is geared towards determining Boeing's regions of operations. Currently, Boeing has sales and production centers in various parts across the globe, which was determined through location planning. In this case, the company's location planning is mainly centered on conducting an evaluation of world regions, especially emerging markets. The analysis provides necessary information that guides decisions on suitable locations for sales and production centers worldwide.
Design of Work Systems:
Generally, Boeing has always succeeded in developing technologically-advanced aircraft with less focus on cost. This is primarily because of its philosophy that developing a better plane is more important than developing a cheaper one. However, the firm's designers and personnel evaluate their designs of aircrafts based on value. Boeing has various design or build teams that are engaged in each aspect of design effort. Each of these design/build teams is responsible for a specific element and include personnel from various disciplines i.e. manufacturing, procurement, design, customer support, and operations. These teams also have leaders who help in guiding the process toward a decision and promoting working together with other teams.
In light of its transformation into a large-scale systems integrator and the fundamentally changing role of the firm's suppliers, Boeing has continued to adopt lean principles like just-in-time systems. These systems include just-in-time ordering, point-of-use delivery, and internal kitting to align with its production processes. Through the adoption of these lean manufacturing principles, Boeing is currently requesting its suppliers to build and deliver components using just-in-time techniques (Arkell, 2005). The use of just-in-time systems have played a crucial role in aggregate planning since Boeing works with suppliers to establish inventory levels in terms of consumption rates required to support production. The systems enable suppliers to aggregate demand and order when necessary while enhancing the firm's ability to predict and improve its cash flow. Moreover, the systems has been vital in operations management by helping suppliers to plan their production rates more efficiently, accurately predict staffing needs, improve schedule maintenance, and conduct their own lean improvements.
Scheduling operations is a process in operations management that focuses on allocation of jobs to specific machines in order to lessen total cost, which is simply known as assignment problem. It also includes sequencing i.e. determining the priority or order with which jobs would be processed on various machines to lessen the overall processing time. Since Boeing's production process is wide or broad in nature, its scheduling operations process is multi-faceted. Actually, the company not only has integrated scheduling and utilizes advanced scheduling software that helps in arranging factory production activities through balancing the firm's capacities with manufacturing needs and limitations. The use of the system leads to the establishment of a dynamic assembly schedule that matches Boeing's production variability and enables it to implement its plan as efficiently as possible. The scheduling processes combine different scheduling measures, decision support, and competent conflict resolution.
Project management at Boeing has involved the adoption of enterprise project management strategy and the creation of enterprise project management office, which is mandated with the task of strengthening…