Draft Submission

North South University

Sazzadul Karim Chowdhury 1621595630

Md. Munjaber Kashem 1721968630

Syed Fahimul Haque 1813406630

Arabi Islam 1812759630

Mehdi Hasan 1512457630

Executive Summary 3
Introduction 4
Operations 4
Value Addition 5
Analysation of Processes 8
Capacity 8
Quality Management 8
Globalization 8
Effect of the CoronaVirus Pandemic 10
Recommendation for Contingency Plans 12

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Executive Summary

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1. Introduction

A History of Boeing

In 1916, William E. Boeing founded the Aero Products Company in Seattle, Washington.

Previously an owner of various lumber companies, Boeing took an interest in aircraft and

transformed a wooden boat building plant into an aircraft manufacturing plant. By 1917, he had

renamed it to the Boeing Airplane Company. (O'Connell, 2020)

Today, Boeing is the largest aerospace company in the world (The Top Ten Aerospace and

Defence Companies by Market Share, 2019) as well as the leading manufacturer of commercial

jetliners and security systems, among other things. Their reach expands to over 150 countries

around the globe, while also supporting the U.S. government and the military. (Boeing, n.d.)

Boeing’s ambitions reached beyond the stratosphere in the 60s, as the company built the Lunar

Roving Vehicle that was used in the Apollo Space Flights, as well as the Lunar Orbiter. They

were also behind the creation of the Mariner 10 Space Probe and Saturn V Rockets which was

used to send men to the moon (Weiss, n.d.)

2. Operations

I. The United States of America

Boeing divides its operations into three major business segments; Commercial Airplanes,

Defence, Space, and Security, and Boeing Global Services. Boeing Capital Corporation is also a

part of the company, providing financial solutions to Boeing customers. (Boeing, n.d.)

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 The Boeing Commercial Airplanes has over 60,000 employees worldwide, though their

headquarters is located in Seattle, Washington. They pride themselves on their commitment to

delivering nothing but the best for their customers. With superior design and efficiency, they

currently have over 10,000 jetliners in service. The Defence, Space, and Security unit of Boeing

functions globally, providing superior designs and solutions to inspire the world through their

innovations to explore space farther. (Boeing, n.d.)

II. Global

Boeing’s Global Services works with more than 20,000 suppliers and partners from all over the

world, providing services, manufacturing, and technology solutions with companies and

governments. (Boeing, n.d.). They also provide supply chain and logistics management,

engineering, maintenance and modifications, upgrades and conversions, spare parts, and data

analytics and digital services (Johnston, 2020). Some of the countries that Boeing works with are

Africa, Australia, China, India, and Israel.

Their services unit is a standalone business which not only manufactures but also provides repair

services alongside aircraft maintenance, data analytics and supply chain services (Sheetz, 2018).

About 80% of the company's sales are generated from countries outside of the United States.

However, 80% of their suppliers are from within, making them the country’s largest exporter.

(Thompson, 2019)

3. Value Addition

Values Boeing is proud to represent everyone who depends on its goods and services every day.

This is how they work and how they treat one another. They're the best standards of their work.

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Boeing workers in their corporate organization are united by a common devotion to their ideals

as guiding principles. All of us take personal responsibilities to live these ideals and lead the way

forward with their teams, clients, partners and neighbourhoods in which they live and work while

innovating and striving to make the world better. (Boeing, n.d.)

I. How they operate

● Start with engineering excellence

A solid engineering base helps them to install and manage their goods in the factory and

service with protection, consistency and dignity. That's why the engineering will still

take time. (Boeing, n.d.)

● Be accountable — from beginning to end

They will figure out who is responsible for any part of the job at each point of each

initiative — from the design and production to sales and commercialisation, and

everything in between — and who can recognize their duties and be directly responsible

for the work they do, including their supplier partners. (Boeing, n.d.)

● Apply Lean Principles

These values have served many organizations, including them, well enough that they are

generally dedicated. In every area of their industry, they promote constant change in

order to increase consumers' satisfaction and minimize waste. (Boeing, n.d.)

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 ● Eliminate travelled work

Rework has a detrimental influence on efficiency and first-time output, so they would

aim to eradicate it from engineering design to the factory floor to the office climate in all

areas of their company. Let’s do things right the first time, every time. (Boeing, n.d.)

● Reward predictability and stability — everywhere in their business

While celebrating exceptional attempts to resolve unplanned challenges to their work is

important, it is much more important that the everyday preparation, delivery and

discipline set up for them be established and celebrated. Predictability and continuity

will help and plan their goals to tackle the unexpected. (Boeing, n.d.)

II. How they act

● Lead on safety, quality and integrity

They will make protection their top priority in all areas of their work, aim for excellence

for the first time and follow the highest ethical expectations. (Boeing, n.d.)

● Collaborate with humility, inclusion and transparency

Together they build an open, honest and inclusive atmosphere in which they seek each

other's viewpoints, promote constructive dialogue and discourage those to be accepted

and included. (Boeing, n.d.)

● Import best leadership practices

They will pursue insights from one another, as well as external industry leaders and

organizations with proven excellence, as they aim for quality development in themselves
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 and their company. Entering these best practices and assimilating these would allow them

to overcome their most challenging problems. (Boeing, n.d.)

● Earn stakeholder trust and preference

They will win and keep the confidence of their consumers, vendors and investors; their

team members; and anyone who uses their goods and services by truly contributing to

their values, engaging with integrity, and achieving results with excellence. (Boeing, n.d.)

● Respect one another and advance a global, diverse team

By developing diverse teams, appreciating each other's diversity as strengths, and

keeping themselves responsible for inclusive mechanisms that foster confidence and

accountability, they can integrate and amplify a broad variety of insights and global

viewpoints. (Boeing, n.d.)

4. Analysation of Processes

5. Capacity

Boeing being the world largest and foremost manufacturer of commercial jet transport. Boeing

Company’s constituent business units are organized around three main groups of product and

services commercial planes, military aircraft and missiles (Britannica, 2020). Aerospace industry

needs to overcome certain barriers to maximize its profit, so they need to have high skilled

labors, capital intensive facilities and technological innovation. This type of copany is known as

cyclical and commercial cycle is unpredictable.

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While capacity planning is important for any manufacturing company, a few factors make this

problem especially critical to the aerospace industry. Firstly, the capacity planning is

complicated by the large commitments to functional capabilities under conditions of uncertainty,

such as R&D, manufacturing expertise, and investments in resources. In addition, capacity

expansion decisions need to be made far in advance due to the high cost and long-lead times

required. Karabuk and Wu [4] note that if the capacity is not expanded in a timely fashion to

meet market demands, then a significant loss of market share may result. A second factor that

complicates capacity planning in the aerospace sector is new technology development and

manufacturing process improvement. The variability of new technology may lead to uncertainty

in capacity estimation and throughput (Karabuk and Wu [4]). Since capacity cannot be realised

to deliver the orders on time, it can lead to very undesirable business consequences. A third

factor unique to the aerospace industry is the unprecedented growth and external uncertainties in

government regulation, economic conditions and green technology, which require managerial

flexibility (Datamonitor [5]). For these reasons manufacturers in the aerospace industry forge

alliances with risk and revenue sharing partners in the value chain system to collaborate on the

development work and in manufacturing and assembly (Pandza et al [6]). Capacity planning

within a supply chain context is a strategic response to the challenges that arises from these

dependencies (Xu and Beamon, 2007) and requires tools for effectively managing these

interactions.

Three uncertainties can be faced with the supply chain management and they are as follows-

Demand uncertainty- Demand uncertainty happens due to the volatile nature of the aerospace

industry.

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 Capacity uncertainty- Capacity uncertainty is a fact of life in the aerospace industry due to the

needs to continually upgrade its technology. The amount of new technology in use and

consequently the uncertainty in manufacturing processes introduce high variability in timing of

the delivery of orders.

Supply uncertainty- Supply uncertainty means the shortage of input materials and components

used in the production process adversely influence sales of manufacturing firms.

6. Quality Management

7. Globalization

BOEING is a common name around the world for commercial planes. The company is

successful internationally which is proved by the number of customers they have from 145

countries around the world. Boeing also plays an important role in connecting people during the

crisis. But, a company can only be global if it has made a mark in all the communities and

localities like Nestle or Coca Cola. When someone drinks cola, they think they are the origin

from where it is being produced. For thriving and surviving, Boeing has to become a global

enterprise. Thus a global market and global competition are inevitable. (Beck et al., n.d.)

Boeing is actively pursuing a strategy for globalization and global value creation through new

partnerships, joint ventures, mergers and acquisitions, supplier relationships and a greatly

expanded international presence. Boeing has almost 174,000 employees, but around 3% among

them are from the outside of states. They are distributed throughout 61 countries and territories,

including approximately 3,000 in Australia with hundreds more in Britain, Germany and Russia,

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combined. Indeed, Condit predicts that Boeing will have "significant operations inside other

countries in the next five years."

They have hired 5 country executives of high calibre from different origins to head up a network

of as many as 25 countries or regional offices by 2005. These new executives will help the

company to address various issues of the company regarding government and non-government to

get better in different parts of the world. This would increase the company’s engagement with

the countries. They'll also help deliver the Boeing message clearly across cultures, to do business

in sensitive and effective ways. (Beck et al., n.d.)

Recent operations of Boeing indicates the company’s globalization. Australia's Preston Aviation

Solutions, which has their den in Washington and London gives sophisticated simulation,

decision support, and scheduling software for airlines and airports worldwide. The new Boeing

Air Traffic Management business unit has the advantage of intellectuality.

Boeing is a worldwide source. Non-US members have to go through some procedures but they

are a part of high quality but lower cost supplier-partners thus increases the competition.

Boeing is sponsoring International Technology Summits that have been held in Tokyo, London,

Paris and Madrid. More are in the way. These kinds of events bring all the important people

together and open more doors for the new idea to develop for globalization. Along with this the

company is also hugely benefited. Representatives from Phantom Works, Boeing country leaders

and country strategy teams, and Boeing's London-based International Communications

organization organize the summits. (Beck et al., n.d.)

The transformation of Boeing from a company to a Global enterprise is a planned, measured and

lengthy process. ​It could be years before Boeing achieves the global depth and localization it
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 needs to sustain long-term competitiveness. However, with strong backing from the Boeing

board of directors, the Office of the Chairman and business unit leadership, the company is

marching ahead with its strategy to develop a global mindset and global presence. (Beck et al.,

n.d.)

8. Effect of the CoronaVirus Pandemic

In a devastating turn of events, the CoronaVirus pandemic from earlier this year has left many

businesses in distress. With getting out of peoples’ homes, let alone travelling long distances

being minimized, no industry has been affected as much as the airline companies around the

world (Haydon & Kumar, 2020). With Boeing being the largest aerospace company, it is no

surprise that their businesses took a hit that has jeopardized their operations with long-lasting

effects.

In the first quarter alone, Boeing reported a loss of $641 million and $2.4 billion in the second

quarter, as air travel reduced significantly. Unable to cope with it, they were forced to cut down

on around 30,000 employees in all, according to recent reports. Furthermore, David Calhoun,

CEO of Boeing, mentioned in a memo to the staff, “We anticipate a workforce of about 130,000

employees by the end of 2021”. Considering that they started the year with 16,000 employees,

this total number reduced will account for 20%. (Schaper, 2020)

In a sick twist of fate, Boeing had already been facing losses before the pandemic had even

fully-fledged. They had reported their first blow in two years back in January. This was

presumed to have been due to the fatal crashes of two of Boeing’s aircraft; the Lion Air Flight

610 on October 29, 2018, and Ethiopian Airlines Flight 302 on March 10, 2019. The Boeing 737

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 Max was grounded by U.S. Safety Regulators due to these accidents the led to 346 people losing

their lives. (BBC, 2020)

As the 737 Max accounted for a large portion of Boeing’s revenue, this naturally had an adverse

effect on the profits that they had anticipated for 2019 (Sheetz, 2019). By the time the grounding

was lifted, in November, the pandemic had already brought further losses to the company.

*more info to add from:

1. https://www.aljazeera.com/economy/2020/6/9/pandemic-impact-boeing-jet-deliveries-sin

k-to-just-four-in-may

2. https://www.reuters.com/article/us-health-coronavirus-boeing-idUSKBN21K1QS​ (on

their Defense, Space, and Security sector)

3. https://www.marketwatch.com/story/boeing-faces-a-crisis-not-of-its-own-making-in-coro

navirus-but-no-less-serious-2020-04-21

4. https://www.cnbc.com/2020/10/06/boeing-covid-pandemic-to-hurt-aircraft-sales-for-mor

e-than-a-decade.html

9. Recommendation for Contingency Plans

Sources:

1. https://gulfbusiness.com/boeings-comeback-from-covid-crisis-hinges-on-tarnished-737-

max/

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 2. https://www.bizjournals.com/seattle/news/2020/03/05/boeing-shares-details-of-coronavir

us-plan.html

3. https://www.wsj.com/articles/boeing-and-airbus-study-how-coronavirus-behaves-during-

air-travel-11590498000

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