At the beginning of 2013, Boing's revolutionary 787 airliner suffered a host of problems and then the fleet was grounded because of a fires caused when lithium‐ion batteries overheated. This paper aims to look at the way the company managed the risks of innovation and how outsourcing added to this risk.
According to his research, which includes news reports and published internal reports, the author believes that Boeing problems with the 787 Dreamliner that led to its grounding can be blamed on how it went about outsourcing, both in the USA and beyond.
The paper reveals that the 787 involved not merely the outsourcing of a known technology. It involved major technological innovations unproven in any airplane.
Some degree of offshoring is an inevitable aspect of manufacturing a complex product like an airplane, but the cultural and language differences and the physical distances involved in a lengthy supply chain create additional risks. Mitigating them requires substantial and continuing communications with the suppliers and on‐site involvement, thereby generating additional cost.
The author offers a set of recommendations for company executives planning to offshore projects that involve major technological innovations.
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