INDIVIDUAL ASSIGNMENT

Summary of The Boeing 767 Form Concept to Production

MM 6043 Global Project Management

By:
MURNI FITRI FATIMAH
NIM: 29113539

Master of Business and Administration Program

School of Business and Management
BANDUNG INSTITUTE TECHNOLOGY
2015

SUMMARY
The Boeing 767 : From Concept to Production

Airplane industry is one of the most capital intensive and scedule intensive industry
with large lead time from concept to production. Meeting the deadlines and maintainng
quality is paramount to players operating in this industry. Production and assembly costs are
very high and transportations of components parts required for final assebly is also very
crucial. To minimize costs, effective use of technology is required. Also, the makers try to roll
out as many derrivatives of the parent product from the same assebly 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.
Commercial aircraft manufaturing was an industry of vast scale and complexity
because involve thousands of scientists and engineers to develop new technologies and
production system. Instead of operation system and production complexity, airframe industry
also have related with safety of many passangers and other stakeholders. Few companies
were able to marshal such massive resources. In the past around 1981, airfram industry only
have three major such as the American manufaturer, Boeing and McDonnell Douglas, and the
European consortium, Airbus. Boeing and McDonnell Douglas were competitors of
longstanding.
Airframe manufacturing was a high risks and uncertaity industry. But it have many
potential of worth on line business to gain higher revenues. The Boeing 707 and 727 actually
made money because demand was increase by airlines and also likely to bring great prestige,
power, and influence to the company and managers that created it. The boeing success
required a long-term view but competitive pricing was essential. Manufacturers were
therefore anxious to build oreders for new planes as quickly as possible to fulfill demand. So
the negotiation of price, design modifications, and after-sales parts and service become
especially aggresive in 1970 when airlines that had been making steady profits began losing
large sums of money.
Boeing was the sales leader of the airframe industry as well as one of Americas
leading exporters. Other divisions produced missiles, rockets, helicopters, space equipments,
computers, and electronics. To meet this challeng, Boeing originally relied on extensive
vertical integration. Besides of design of plan company also prepared for the manufacturer to
ensure the safety and maintenance of planes. Since the 707 was intruduced in 1955, Boeing
had competed by selling familiers of planes. Boeing provide flexible design with inherent
growth potential and modification such as a stretchend fuselage to increase capacity to
accomodated without wholesale revisions in design or the need to start up entirely separate
development programs. The development process is very extensive, through and detailed a
Boeing. 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.
Company culture of Boeing hired the managers with capabilities to distict corporate
identity. Teamwork was especially valued, as was interfunctional cooperation. Employees in
Boeing was competent and capable of working as members of the team. Engineers was

brilliant but uncooperative individuals so can harm to a program as cooperative but mediocre
team members. Once selected, teams were granted considerable autonomy. But diciplined
decision-making process was expected. as was detailed planning. Both were viewed by
managers as characteristics Boeing traits. Meeting schedule was an especially high priority
for managers. A variety of tools, several of them unique to Boeing, were used to develop
realistics schedule and monitors them over time. Regular communications was encouraged,
even if it meant bringing bad new.
The flexibility to incorporate change is the key attribute of a project. The approach to
change management can be incorporating changes into the current production flow, finishing
the job in current production flow and then incorporate the changes, and expenditing changes
by assingning additional workers blue streak. Management visibility system can be used to
manage schedule of this change management process such weekly marathon or stand-up
status meetings held by representatives of affected departements to review slippages and
highlight potential problems.
Production to continue as planned and the modification program would be conducted
as a separated activity later. The advantages were production would be delay. Because
modification was separated from normal flow of production, all other production would be
continued as planned as well as learning curves. Functional test could be done as originally
planned. Because the tests were done during the final assembly process, problem would be
identified and corrected on the spot. Problem 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. Cheaper approximately one million additional labor hours were required.
Then disadvantages were 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. Operation systems might be disrupted, if the
modification was not done carefully. Space problem will be next prblem because not enough
room within the factory to modify all thirty planes. Special parkin plan, special fire control
plans and waivers would be deployed.
All modification would be done during production rather than after production. All
parts were installed only one. Because there would be no installation and subsequent
removal, all parts be installed firmly. All activities would be controlled by normal procedures
because modification would occur during production. All the parts associated would be
identified and their installation would be discontinued and later steps in assembly would be
carried out. But original plan and learning curve would be disrupted and additional labour
will required higher costs approximately two million 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.
In airframe manufaturing industry is the primary concern. Since the second approach
might not detect and correct problem immediately. The first option is preferable to second
one. By not delaying the trials and subsequent certification from FAA, Boeing would have
more reaction time in case any of the existing components has any anomalies. Since one of
the customers has ordered for three cew cockpit design and retained his decision to procedure
the same. The size of this order is not given in data and the implication of shifting the order

of the first few planes by United Airlines to this players is not clear. The man-hours required
for doing the changes later are half of what is required for modifying the current production
flow. It will also make sense to complete scheduled production of the 30 planes with three
crew cockpit design as it will ensure better control on one of 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.
Retrofitting process can be blue steak method where additional worforce can be
employed for expediting the changes. Boeing had plans for incorporating the plan for two
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 action.Taking the post
production actually change approach.