Outsourcing and offshoring. The same thing that ruined a lot of of stuff in America. And moving to Chicago didn’t help.
Here are quotes from:
https://www.forbes.com/sites/stevedenning/2013/01/21/what-went-wrong-at-boeing/#3a11a4bd7b1b
“Boeing’s outsourcing was modeled in part on Toyota's supply chain, which has enabled Toyota to develop new cars with shorter development cycle times. Toyota
successfully outsources around 70 percent of its vehicles to a trusted group of partner firms.
However key elements of the Toyota outsourcing model were not implemented at Boeing. Toyota maintains tight control over the overall design and engineering of its vehicles and only outsources to suppliers who have proven their ability to deliver with the required timeliness, quality, cost reduction and continuous innovation. As Toyota works closely with its suppliers and responds to supplier concerns with integrity and mutual respect, it has established an impressive level of professional trust and an overriding preoccupation with product quality.
By contrast, Boeing adopted the superficial structure of Toyota’s tiered outsourcing model without the values and practices on which it rests. Instead, Boeing relied on
poorly designed contractual arrangements, which created perverse incentives to work at the speed of the slowest supplier, by providing penalties for delay but no rewards for timely delivery.”
.......
“Rather than plan for face-to-face communications and on-site communcations, Boeing
introduced a web-based communications tool called Exostar in which suppliers were supposed to input up-to-date information about the progress of their work. The tool was meant to provide supply chain visibility, improve control and integration of critical business processes, and reduce development time and cost. Instead of people communicating with people face-to-face, the computer itself was supposed to flag problems in real time.
Not surprisingly, the tool failed. Suppliers did not input accurate and timely information, in part due to cultural differences and lack of trust. As a result, neither Tier-1 suppliers nor Boeing became aware of problems in a timely fashion.”
........
“After the move, Condit says that he spent much of his time in the Chicago business community, where he “encountered CEOs frequently gathering to nail down civic goals ranging from landing new companies to building world-class parks. ‘I was surprised by how much that happened,’ Condit said. ‘A meeting in which Starbucks,
Microsoft, Costco, Boeing and Weyerhaeuser and a bunch of small businesses are all in the same place — rarely happens in Seattle,” he added. ‘It happened all the time in Chicago.’”
So while Boeing’s CEO was in Chicago, strategizing about the future of Boeing and discussing civic goals with CEOs from other companies, the managers back in Seattle were making business decisions about tiresome “how-do-you-design-an-airplane stuff” that would determine whether there would be a firm to strategize about.“
Sorry about the broken links. I don’t know how to de-link them.