Boeing_Global_Production_System_Presentation.pptx

Boeing Global Production system as key case study for organizational resilience: challenges and recommendation

1. Boeing’s Global Production System A Case Study in Global Outsourcing and Strategic Reassessment Presenter : Y AKUBU AKUYINGA SHAIBU Institution : BAIKAL SCHOOL OF BRICS Date : 18 TH OCTOBER, 2025 ]

2. Introduction • Boeing: America’s largest aircraft manufacturer and exporter . • Historically vertically integrated (controlled most parts of production). • Shifted toward global outsourcing in the 21st century. • Case focus : Boeing 787 Dreamliner project.

3. Boeing’s Traditional Production System • Earlier aircraft (e.g., 737, 747) mostly built in-house. • Only ~5% of parts sourced from foreign suppliers. • Jet engines mainly from American firms; Rolls-Royce as a key foreign partner. • Strong control over design, quality, and timelines.

4. The Shift to Global Outsourcing • 787 Dreamliner: 50+ suppliers across the world. • 65% of aircraft’s value produced outside the U.S. • Example suppliers: - Alenia (Italy): Center fuselage - Mitsubishi & Kawasaki (Japan) : Wings and fuselage - Diehl (Germany): Cabin lighting - Saab (Sweden): Doors - KAA (Korea): Wing tips

5. Reasons for Outsourcing 1. Market Access : 80% of Boeing’s customers are foreign airlines — outsourcing builds trade relationships. 2. Expertise : Partner with the best global specialists (e.g., Mitsubishi’s expertise in wing manufacturing). 3. Cost and Risk Reduction : Suppliers absorb part of the investment and development risks.

6. The Dreamliner’s Outsourcing Challenges Overextended supply chain - difficult coordination across countries and time zones . • Components didn’t “snap together” as planned. • Engineering delays and quality inconsistencies. • 4+ year delivery delay → millions in penalty costs. • Vought Aircraft’s failure → Boeing had to acquire it.

7. Lessons Learned • Outsourcing ≠ risk-free strategy. • Critical manufacturing knowledge was lost over time. • Quality control and production timing suffered. • Boeing realized the need to retain core technical competencies.

8. Boeing’s Strategic Reassessment • Boeing began bringing production back in-house. Example : 777X program uses same carbon-fiber technology as 787 but produced internally. • Mitsubishi and Kawasaki still supply parts, but Boeing now manages integration more tightly. • Rebuilding internal skills and control.

9. Broader Implications • Globalization offers benefits (efficiency, access, expertise) but also risks (coordination failures, quality issues ). • Balance is crucial: outsource for specialization, retain core competencies for control . • Boeing’s case = a warning and a model for global firms.

10. Conclusion • Boeing’s global production system revolutionized aircraft manufacturing. • However, excessive outsourcing led to costly setbacks. • Reintegrating production helps Boeing recover its competitive edge. • Core lesson: Strategic balance between global collaboration and internal expertise.

11. Discussion Questions 1. What advantages did Boeing gain from outsourcing globally? 2. What major risks did the 787 project reveal? 3. How can firms strike the right balance between outsourcing and in-house production?

12. References • The Boeing Company official reports and press releases. • The Economist (case analysis). • Harvard Business Review articles on global supply chains. • Course readings or additional academic sources.