Yet Boeing pursued an outsourcing strategy for crucial systems in its 737 Max. “We gave work to people that had never really done this kind of technology before, and then we didn’t provide the oversight that was necessary,” Jim Albaugh, then the company’s commercial aviation chief, acknowledged. ![]() Some subcontractors couldn’t meet their output quotas, creating huge production logjams when crucial parts weren’t available in the necessary sequence. Some of the pieces manufactured by far-flung suppliers didn’t fit together. The next-generation aircraft came in billions of dollars over budget and years behind schedule when it finally began to fly commercially in 2011, in part because Boeing farmed out more of the work to foreign contractors. Boeing could have learned the lesson that outsourcing can increase costs and place a heavy burden on management from its experience with its 787 Dreamliner. Only since that crisis erupted have manufacturers recognized that they need to move away from just-in-time to just-in-case - that is, keeping more parts inventory on-site and more workers, with better training, on call.Īnother manifestation is outsourcing. “Just-in-time manufacturing is producing revolutionaries who don’t know when to stop.”īeginning in the summer of 2021, logjams in the global supply chain, compounded by a surge in post-pandemic goods orders from consumers returning to shops, left manufacturers without needed parts and retailers without merchandise. The dream of a production line “inherently flexible, inventoryless, even computerless, replenished by infinitely responsive suppliers” was too simple, Uday Karmarkar, an expert in manufacturing strategy and technology at UCLA’s Anderson School of Management, observed as long ago as 1989. The pace of work sped up, workers were squeezed on wages and hours, parts suppliers operated on ever-narrower margins. Starting last fall, passengers on Southwest Airlines’ usually reliable flights began noticing a sharp deterioration in on-time performance. The idea was to slash waste by coordinating inventories of parts, the supply of workers and the time for production so that everything was in place when needed and not a minute before or after.īusiness The real story behind the collapse in Southwest’s on-time performance ![]() One is just-in-time production, which spread like wildfire from Toyota, where it originated in the 1980s, to the rest of the automobile industry and eventually to the manufacturing sector generally. There are numerous manifestations of this cheeseparing habit. They’re betting their companies on a bad strategy. Business managements have become hostages to cost-cutting, squeezing expenses out of their systems in every way possible, trusting to luck that what works under normal conditions will continue to work when the outside world goes haywire. At LAX, the cancellations and delays create misery. ![]() ![]() California Photos: Southwest Airlines meltdown worsens California airports hit hard with mass cancellationsĪirlines cancel more than 2,800 flights Tuesday morning, the majority of them with Southwest.
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