The Art of Insight -- The Science of Oversight

“On Tuesday, Boeing Co. will give Wall Street a progress report on its 787 Dreamliner, as it scrambles to overcome a six-month delay in producing the new jet. A look inside the project reveals that the mess stems from one of its main selling points to investors -- global outsourcing.

“When the Chicago aerospace giant set out four years ago to build the fuel-sipping jet, it figured the chief risk lay in perfecting a process to build much of the plane from carbon-fiber plastic instead of aluminum. Boeing focused so hard on getting the science right that it didn't grasp the significance of another big change: The 787 is the first jet in Boeing's 91-year history designed largely by other companies.

“To lower the $10 billion or so it would cost to develop the plane solo, Boeing authorized a team of parts suppliers to design and build major sections of the craft, which it planned to snap together at its Seattle-area factory. But outsourcing so much responsibility has turned out to be far more difficult than anticipated.

“The supplier problems ranged from language barriers to snafus that erupted when some contractors themselves outsourced chunks of work… The first Dreamliner to show up at Boeing's factory was missing tens of thousands of parts…

"Boeing overestimated the ability of suppliers to handle tasks that its own designers and engineers know how to do almost intuitively after decades of building jets. Program managers thought they had adequate oversight of suppliers but learned later that the company was in the dark when it came to many under-the-radar details.

“‘In addition to oversight, you need insight into what's actually going on in those factories,’ says Scott Carson, the president of Boeing's Commercial Airplanes unit. ‘Had we had adequate insight, we could have helped our suppliers understand the challenges.’ …

“Boeing… has responded to bottlenecks by throwing both money and people at them, parachuting in dozens or hundreds of its own employees to attack problems at plants in Italy, Japan and South Carolina…

“Many of these handpicked suppliers, instead of using their own engineers to do the design work, farmed out this key task to even-smaller companies. Some of those ended up overloading themselves with work from multiple 787 suppliers, Boeing says.

“The company says it never intended for its suppliers to outsource key tasks such as engineering, but that the situation seemed manageable at the time. ‘We tended to say, They know how to run their businesses,’ says a Boeing executive familiar with the company's thinking…

“Despite the start-up problems, Boeing and its suppliers still say they believe this new method of developing planes is the model for future projects.”

(“Jet Blues: Boeing Scrambles to Repair Problems With New Plane; Layers of Outsourcing Slow 787 Production; 'Hostage to Suppliers'.” J. Lynn Lunsford. Wall Street Journal: December 7, 2007. pg. A.1)

FOCUSING TOO HARD on the science of management leads to neglecting the art of managing. A model for the future... ?