The issues began with cost cutting. Boeing outsourced 70% of 787 manufacturing with a tiered outsourcing structure. With this outsourcing, the issues created were manufacturing delays due to miscommunication and sometimes lack of communication all together.
During the manufacturing of the 787, the bottom most tier did not communicate the issues they were facing to the company that was assembling the plane. This caused delays in the production cycle so much that the first planes came out 3 years later than promised.
The management failed to communicate how to go about the innovations when they did not provide an on field expert to the companies that were making the parts of the plane.
Next issue was the 737 Max. There is also a very sad case of cost cutting. Boeing had to keep everything the same about it as the previous versions of 737, while also innovating for fuel efficiency and to keep up with the competing new entry from Airbus. The management decided to install software in the plane that they did not tell the pilots about. This, essentially, a lack of communication brought about the two fatal crashes of the Boeing 737 Max.
In both cases, Boeing looked at its competitor’s success story, and only focused on the sales they made. They ignored their supply chain, and they ignored the people who are actually going to be operationally interacting with their products.
Businesses that are B2B and even those who are both, B2B and B2C, like Boeing, need to streamline their focus on catering to more than just their absolute end user and looking at their sales performance.
It should begin at the supplier level. The end user is important, yes. But the people who make and distribute your products are more important on a prerequisite level. There are plenty of products that have parts being manufactured by smaller companies and they then come on the assembly line to a different company. This means that the communication between these two companies and you needs to be transparent.
It boils down to paying attention to and maintaining your supply chain. How do you go about this?
No cost cutting:
The only way to do this is not to stop outsourcing, but to outsource responsibly. Pick the right vendors and manufacturers. Outsource to a place that has the same work ethic as your company or country, and ideally one where you speak the same language. Don’t focus on innovating for the sake of cost cutting. This makes it easier to compromise on quality.
Put effort towards your supply chain:
If you are the designer and engineer of your product, you need to place a trainer or supervisor with the manufacturing units. This way, problems can be solved in run time without delays and more importantly, mistakes.
Vendor management portal:
Use a vendor management portal to choose your manufacturers. You can have modules in the portals for quotes, timelines, quality rating etc. This portal should be used by the manufacturers as well as by the people who are assembling your product. From on boarding, quality check, contract management to constant communication, the vendor management portal can handle it all.
With the effective use of this portal, every stakeholder can get run time updates during the process. This can help avoid costly delays and manufacturing defects. No decision will have to be backtracked because of miscommunication. Additionally, if you need to change the specific also, you can do so directly from the portal. The manufactures have a place to register issues they are facing or if they need to revise the contract details etc.
A good supplier management portal can solve anything from the smallest to the extremely important issues. However, your relationship with your suppliers cannot fully depend on the portal. The portal is an aid to human interaction, to reduce redundancy and miscommunication.
The idea is always to build a sustainable business. Not just a profitable one. And once your business is big, do not go down the Boeing road. Don’t look at just the fact the competition is getting better, but examine how they are doing it. Innovation should not come at the hand of corruption.
About CRMJetty…
We are a portal solution company, and we partner with businesses to make portals for their vendors and suppliers. Our supplier management portal has all the features you’d need and it can aid you in your relationship management.
To know more about us and supplier management portal, feel free to drop us a line at [email protected].
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