Date: 04/08/2010

Group Assignment for Operations Management-1

Analysis on The Boeing 767: from Concept to Production (A)

Phases of change management: The issue in hand is the case of Change Management. The flexibility to incorporate changes is the key attribute of a project. The approach to change management can be:

y y y

Incorporating changes into the current production flow Finishing the job in current production flow and then incorporate the changes Expediting changes by assigning additional workers ("blue streak").

Management Visibility system can be used to manage schedule of this change management process: y Weekly marathon (stand-up) status meetings held by representatives of affected departments to review slippages and highlight potential problems.

Industry Overview:

Airplane industry is one of the most capital intensive and schedule intensive industry with large lead times from concept to production. Meeting the deadlines and maintaining quality is paramount to the players operating in this industry. Production and assembly costs are very high and transportation of component parts required for final assembly is also very crucial. To minimize costs, effective use of technology is required. Also, the makers try to roll out as many derivatives of the parent product from the same assembly line as possible. This helps in reduction in costs and also optimizes the learning curve as workers do not have to learn many new things as the machines and line remain the same. The development process is very extensive, thorough and detailed at Boeing. From selection of team to design and then assembly and eventually rolling out is carried out with utmost care and precision. Every stage has a well defined process and procedures to ensure timely and flawless delivery of product.

The two options for the change management in BOEING 767 cockpit crew configuration Completion of production and subsequent modification Production to continue as planned and the modification program would be conducted as a separated activity later. Advantages: y Production would not be delay. Because modification was separated from normal flow of production, all other production would be continued as planned as well as learning curves. y Functional tests could be done as originally planned. Because the tests were done during the final assembly process, problems would be identified and corrected on the spot. y Problems could be concentrated. Because every step was as normal procedure except installation of the two-person cockpit, we could isolate problems to the cockpit area. y Cheaper Approximately one million additional labor hours were required.

Disadvantages: y Parts needed to be removed after firmly installed, because modification would be done after completion of production, parts for three-person cockpit would be installed firmly in places as the procedure, but during the modification, and some of them must be removed and replaced. y y Operation systems might be disrupted, if the modification was not done carefully. Space problem. Not enough room within the factory to modify all thirty planes. Special parking plan, special fire control plans and waivers would be deployed.

Modification during production

All modification would be done during production rather than after production.

Advantages: y All parts were installed only once. Because there would be no installation and subsequent removal, all parts could be installed firmly. y All activities would be controlled by normal procedures, because Modification would occur during production. y All the parts associated would be identified and their installation would be discontinued and later steps in assembly would be carried out.

Disadvantages: y y y y Original plan would be disrupted Learning curves would be disrupted. Expensive. Approximately two million additional labor hours Problems might not be detected and corrected immediately because functional testing would have to be done after the two- person cockpit was fully installed.

Conclusion:

Factors to be considered:

1. Safety: In this industry safety is the primary concern. Since the second approach might not detect and correct problems immediately, we feel that the first option is preferable to second one. By not delaying the trials and subsequent certifications from FAA, Boeing would have more reaction time in case any of the existing components has any anomalies.

2. Since one of the customers has ordered for 3-crew-cockpit design and retained his decision to procure the same. The size of this order is not given in the data and the implication of shifting the order of the first few planes by United Airlines to this player is not clear. 3. The man-hours required for doing the changes later are half of what is required for modifying the current production flow. 4. It will also make sense to complete scheduled production of the 30 planes with 3-crewcockpit design as it will ensure better control on one of only two possible airplane configurations, rather than the many configurations that would have resulted if changes were incorporated on different airplanes at different stages of production. 5. We can also Blue Steak the retrofitting process, where additional workforce can be employed for expediting the changes. 6. Boeing had plans for incorporating the plan for 2 person cockpit since inception of design and it would be feasible to bring this change to existing configuration. The learning curve is designed such that every subsequent aircraft takes lesser time and changes in the production will hamper this. This also suggests taking the post production change approach.

*To avoid slowing or interrupting the FAA certification process, Boeing chose to build the first 30 airplanes as fully functional (and certifiable) airplanes under the expected FAA certification for the three-crew model. (*As per data taken from Boeing website)