Production Delays Results in Delivery Research Paper

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, 2005). A second airplane design in the replacement program was the 747X, which would have provided better efficiency than the 747-400 with a longer plane body (Norris et al., 2005). Boeing couldn't generate much excitement around the 747X, but the Sonic Cruiser offered stronger appeal (Norris et al., 2005). Continental Airlines was a particularly interested customer, but the feedback from the airlines focused on operational costs (Norris et al., 2005). The attacks of September 11, 2001 (9/11) brought about long-lasting changes in the airlines industry and travel sector. To make matters worse for Boeing, the potential customers for the Sonic Cruiser were U.S. based airlines -- the very airlines that had been most negatively impacted by 9/11. The Sonic Cruiser was officially cancelled by Boeing on December 20, 2002 (Norris et al., 2005). Whether this is attributable to design flaws or simply the dramatically changed economy is not really known, but the reality is that demand for the Sonic Cruiser simply was not sufficient to justify production. In fact, it is the fact that Boeing did end its plans for the Sonic Cruiser that makes a feasibility analysis on the Dreamliner crucial at this point; Boeing has previously begun a feasible project only to encounter changed circumstances that rendered the project no longer viable. It is important for the company to assess whether or not the Dreamliner is another example of that type of scenario.

Not all of the planning for the Sonic Cruiser went to waste. Boeing changed its tact and began work on the more conventionally configured 7E7, announcing the change on January 29, 2003 (Norris et al., 2005). When the airlines industry began to suffer so dramatically, Southwest Airlines stood out as an exception to the rule, retaining profitability in the face of adverse circumstances, so that many airlines began to investigate aspects of Southwest's business model.

Southwest Airlines had made a point in the airlines industry with its point-to-point operations, eschewing the hub-and-spoke practices of most airlines. Apparently, focus group activity around these two modes of operating indicated that a smaller, mid-size twin-jet airplane was more suitable to the profitable point-to-point model, and the 747 type of airline faded even further into the background (Norris et al., 2005). The new 7E7 was touted to be more efficient and environmentally friendly (Norris et al., 2005). The press speculated about whether the "E" stood for those attributes, but Boeing confessed that "E" just referred to "eight." Such a new and imaginative project required a glitzier name, so in July 2003, a competition to name the airliner was conducted (Norris et al., 2005). The online vote count stood at 500,000 and a winning title was selected: Dreamliner (Norris et al., 2005). Dreams become reality as manufacturing begins. The many desirable features of the 787 made it fastest-selling wide-body airplane is history -- 677 orders for the airliner were tallied (Trimble, 2007).

One of the main focuses of the research review is an investigation of what has caused three years of delay in the Dreamliner project, the challenges that Boeing has encountered in the production systems, and the budgetary issues that Boeing has encountered in the project. The goal in examining this research is to determine what Boeing's costs, both financial and other, have been up to this point, whether the project is likely to result in revenue that will cover those costs, whether the project is likely to result in profit, and the most efficient way for Boeing to carry forward with the project: continuing it as is, modifying it, or terminating it.

In late 2003, the Boeing board of directors granted authority to offer the Dreamliner for sale. In April 2004, the program launched, and airlines immediately began placing orders. Between April 2004 and November 2006, 36 customers placed orders and commitments for 456

airplanes from five continents of the world, which made it the most successful launch of a new commercial airplane in Boeing's history (Boeing, 2006).

It is critical to understand what a significant change the Dreamliner was. Boeing was not simply retooling an old design. Instead, it hoped to revolutionize the airline industry. Perhaps the fact that the 787 was so different from existing designs should have prepared Boeing for the delays it encountered in the production phase of the project. "Like any commercial airliner, the Boeing 787 was designed to rigid performance specifications. The aircraft must haul a certain amount of passengers, baggage and freight for a specific distance within a limited cost, and all engineering decisions are usually bound by that reality. Boeing, however, was ready to challenge the dominance of such functional thinking with the 787, and - with little public acknowledgement to date - invented a new process for shaping how an aircraft is designed" (Trimble, 2007). In fact, even the design of the airplane was approached differently than the design of prior models. For example, Boeing brought in French-born marketing guru Clotaire Rapaille to help with the design of the plane, which is different from the typical engineering-dominated design of commercial aircraft (Trimble, 2007). The introduction of Rapaille almost certainly contributed to the appeal of the 787 (Trimble, 2007). However, it may also have contributed to delays, because Rapaille could not have entered the project with the same awareness of the pitfalls one must avoid when creating an airplane.

In November 2006, Boeing issued a press release announcing the forthcoming Boeing 787 Dreamliner. Commercial airlines had indicated a preference for a new type of airline to Boeing. Boeing led a team of worked with several top aerospace companies in order to develop the plane. The early specifications for the airplane were for the 787-8 Dreamliner to "carry 210-250 passengers on routes of 8,000 to 8,500 nautical miles (14,800 to 15,700 kilometers), while the 787-9 Dreamliner will carry 250-290 passengers on routes of 8,600 to 8,800 nautical miles (15,900 to 16,300 km). A third 787 family member, the 787-3 Dreamliner, will accommodate 290-330 passengers and be optimized for routes of 3,000 to 3,500 nautical miles (5,550 to 6,500 km)" (Boeing, 2006). Another goal for the project was unmatched fuel efficiency, using 20% less fuel than comparable similarly-sized airplanes (Boeing, 2006). Furthermore, it was intended to be as fast as the fastest then-existing wide bodied planes, Mach 0.85 (Boeing, 2006). The plane was supposed to be able to carry more cargo than its competition. Moreover, passengers were supposed to see interior improvements, such as increase interior humidity (Boeing, 2006).

Part of the innovation for the Dreamliner was that up to 50% of the primary structure, including the fuselage and wing, were to be made of composite materials (Boeing, 2006). This is an important consideration because changing how the structure was created may have contributed to supply-chain issues. Moreover, when developing the Dreamliner project, Boeing aimed at developing new technologies and process that would help it and "its supplier partners achieve unprecedented levels of performance at every phase of the program" (Boeing, 2006). This change in the manufacturing process was supposed to save supplies and fasteners.

As of November 2006, the program has signed on 43 of the world's most capable top-tier supplier partners (Boeing, 2006). Eleven partners from around the world had started facility construction for a total of 3 million additional square feet to create their major structures and bring the next new airplane to market (Boeing, 2006). The goal was for the 787 program to open its final assembly plant in Everett in 2007 (Boeing, 2006). The first flight was "expected in 2007 with certification, delivery and entry into service occurring in 2008" (Boeing, 2006).

Initially, the public perception of the program was that Boeing was meeting its projected deadlines. In fact, Boeing was unveiled the Dreamliner on schedule on July 8, 2007 (Norris et al., 2005). Moreover, the unveiled project was meeting many of its projected specifications. "One of the most touted attributes of the Dreamliner is that the airplane is constructed primarily of composite materials or super durable plastics, making it the most fuel-efficient airliner Boeing manufactures -- in fact, the 787 is reported to consume about 205 less fuel than the Boeing 767, which is similar in size" (Norris et al., 2005). This reduction in fuel costs was s critical part of the Dreamliner project. The promise of reducing the costs to run an airline through better fuel economy was a change that airplane leasing companies and commercial airlines were eager to support (Norris et al., 2005). In the time leading up to the release of the plans for the Dreamliner, airlines had been battered by years by increased fuel cost, the increased costs of ensuring customer safety, and the wildly fluctuating customer base as travelers react to economic shocks and the threat of terrorism (Norris et al., 2005).

According to Norris et al., there were several features in the Dreamliner that were meant to appeal to customers and their passengers. The plane is a mid-size wide-body, twin-engine jet intended to fly long-range (Norris et…[continue]

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