In Sep-2008 Boeing had orders of 895 ariplanes from 58 customers.

First delay announced in Oct-2007 due to shortage of fasteners. 2nd delay in Jan-2008 due to supply
chain issues. 3rd delay due to

Reasons of 3 years delay

Industry-wide shortage of aerospace fastners, nuts, bolts. This caused a serious supply chain issue. There
were ordering and scheduling problems. Fasteners Procurement Model was then developed to
overcome the issues but could not be implemented properly due to miss communication.

Scope: The outsourcing of most of the work (70%) was intended to reduce 787s development time from
6 years to 4 years and development cost from $10billion to $6billion.

Triple constraints were not properly managed.

The use of composite material (carbon fiber, aluminium and titanium) and li-ion battery was for
reducing weight and 20% less fuel was used.

The risk of outsourcing was not calculated and there was no onsite quality support, supplier
management and technical support for suppliers. Coordination gap. As a result the sub-assembly
process of aircraft was redesigned. Procurement mismanagement. Outsourcing to foreign countries
involved cultural and language differences and distances involved legthy supply chain.

li-ion battery had overheating and causing fire problems. The risk of innovation was not managed.
Innovation needed more involvement of Boeing, instead it was decreased as detailed engineering and
procurement was sub-contracted.

There was lack valuning the ideas of technical people. No proper HRM.

Toyota model was used by Boeing for short development cycle time but its key elements of complete
overall control on the project were not implemented.

Project cost of @ 5 billion ended with $14 billion

Following risks were there.

Outsourcing risk

Partially implementing Toyota model

Offshoring risk

Coordination risk

Overheating batter risk

Risk of communication by computer (Exostar) was misused and wrong info was given by supplier.

Labour relation risk as they were not part of decision making

Leadership had no expertise of supply chain risk management.

More problems are:

Design control, project leadership