We've talked a lot about Boeing over the last few years, from deriding the supply chain convolutions that created the need for Rube Goldberg contraptions like the Dreamlifter to the downsides of transferring knowledge to suppliers that may become competitors, then blaming those same suppliers for their problems.
It seems like they have started to come to their senses, two or three years after several of us predicted the current supply chain nightmare. But would you have guessed that Hollywood was involved?
Union officials say past executives at Boeing used Hollywood as a model as they developed their plans to outsource production on the 787. Moviemakers bring together independent contractors — actors, camera operators, publicists — on a project basis for many films, avoiding the expenses of having all such staffers constantly on the payroll.
Uhh… are you serious?
By treating planes as such projects, advocates of outsourcing figured they could do the same in producing aircraft. "It turns out that we're not the motion-picture industry," quips Stan Sorscher, legislative director of the SPEEA. He says staffers and project teams are not easily interchangeable in manufacturing products as complex as jets.
No kidding. But the real bottom line is that Boeing has apparently woken up to the reality that making a 787 isn't exactly like making Shrek.
Boeing, beset by repeated snarls that have delayed commercial deliveries of its 787 Dreamliner into early 2010, is rethinking the global outsourcing model that critics say has caused much of the nearly two-year holdup. The company is making plans to bring more work back in-house.
Frustrated by production and design snafus that Boeing engineers say have led the company repeatedly to send staffers out to suppliers to iron out difficulties, the company's top executives are suggesting they will rely less on their outside suppliers.
Of course there is that pesky problem of contractual obligations.
Changes could unsettle suppliers who are believed to account for some 70% of the 787-8 in dollar terms, a far larger share than Boeing has outsourced on other planes. Boeing has outsourced much of the work on the new plane in a bid to contain costs and because foreign purchasers and their governments like to see work on the planes done in their countries.
Engineering Vice President Mike Denton has suggested that the company is hammering out details about the changes with suppliers, whose contracts would likely have to be recast if changes are extensive.
So work will be brought inside…
Taking more work in-house could lead to more hiring over time, potentially totaling thousands of workers, say outside consultants and officials at Boeing's engineering union. In mounting its outsourcing effort, Boeing "might have gone a couple thousand engineers too far," says Richard Aboulafia, vice president at the Teal Group, an aviation consulting company in Fairfax, Va.
But wait a minute… they aren't done laying off yet!
But now is a tough time for the company to be tipping its hand on prospective expansion. Boeing, whose work force tends to rise and fall with production demands, is now cutting jobs to contain costs in the global economic crunch. The company on Jan. 9 announced it would cut its work force by 4,500 jobs this year, amounting to 6.7% of the workers in the commercial planes unit.
And that's on top of the thousands laid off when the outsourcing idea was implemented. So now they have to rehire… retrain… what a waste. But perhaps they'll remember this lesson for a while and not look to the starts of a fantasy business to learn how to run a real manufacturing business.