Analyzing Lessons Learned From Airbus A380 And Boeing 787 Projects For MAC’s Growth Ambition Project

Key Stakeholders

Murasaki Aircraft Corporation (MAC) is a Japanese firm that is a prime supplier of regional jets and wings for Boeing’s 787 aircraft. The company is now aiming to produce a lightweight aircraft through international consortium with Airbus and Boeing and by utilizing the Dreamliner lightweight technology being adapted by the latter. The project is a large-scale investment and the management wishes to analyze all the possible risks and issues before stepping in to the initiation phase. 787 and A380 case studies have been analyzed to determine the loopholes and avoid the same. The report covers the respective overview and issues of each to understand the lessons learned. The recommendations are based on the findings.

The primary stakeholder is Murasaki Aircraft Corporation (MAC) that will be responsible and accountable for the project and its associated success or failure. The production, construction, and sale of the aircrafts will be done by MAC. Murasaki Heavy Industries (MHI) has 64% of shares and is involved in the manufacturing and supplying of aircraft equipment. It will be involved in the process of decision-making. Mitsubishi Corporation and Toyota Motor Corporation have 10% shares each and will have a role in the decision-making activities for the project along with the contribution in execution and control phases.  Mitsui & Co. and Sumitomo Corporation are also the shareholders of the company with active interest in the project. The technical support & assistance along with the regional support will be provided by the stakeholders during the lifecycle of the project.  

Overviee of the Project 

Airbus A380 was launched in the year 2007 and it flew from the Singapore to Sydney. The next year, the aircraft covered additional route as Melbourne to Los Angeles. The major customers of the company include Emirates, Air France, and Lufthansa. With the success of A380, Emirates ordered 120 aircrafts and there were bulk orders received from other customers, such as Virgin Atlantic, Qatar Airways, and many others. The company witnessed some issues with the processes of production and delivery.

The project included the construction of a triple-decker flight and it was first of its kinds. It was claimed that the aircraft will be potential of incorporating 35% more passengers and will bring down the fuel consumption by 12%. The turbofan engine and construction technology would make it a lightweight aircraft and the overall cost was estimated to be $347m (£215m). It also claimed that 1405 passengers will be incorporated in economy and business class categories (Bbc, 2012).

• Incompetence: There were several issues that came up during the project that led to the significant delays. The organization and its management were not competent enough to deal with the issues to resolve and avoid them in a timely manner.
• Non-Realistic Expectations: The plan was to launch the aircraft in 2006 with its initiation in the year 2000. The triple decker aircraft was the first of its kind and it usually takes at least 5 years to launch an aircraft. The expectations and timeline were incorrectly set up since there were several new functionalities and parts that had to be constructed and incorporated in the aircraft (Freimuth, 2016).
• Communication & Management Conflicts: The project involved 16 different operational units that were spread in several geographical locations. In order to make sure that effective project communication was carried out, re-structuring and re-location strategy was used which resulted in more harm than good. Ownership disputes and conflicts were witnessed in the project. Also, there were conflicts observed between the management and the engineers. The management was ready to use 3D models while the engineers preferred and recommended using 2D models. The productivity and efficiency of the engineers and operational staff was negatively impacted as management did not change its decision. The use of Catia and Circe software components was also not welcomed by the engineers.
• Miscalculations:  There were 200 German mechanics involved in the installation of copper and aluminum wires in the aircraft. However, due to errors in calculations, it was found that the wires were too short. It resulted in a delay of six months and there were complexity issues and weight problems that were also observed.
• Design complexities: There were over 100,000 wires involved in the aircraft that were performing over 1,150 operations simultaneously. There were issues in consistency of operations that were also observed. It is because Hamburg plant was making use of different version of CATIA software while Toulouse plant incorporated latest version. The issues of complexities and incompatibility were observed as an outcome.

Airbus A380 Case Study

There were several issues that were came up in the project; however, the organization was always in denial of the problems and kept on announcing the plans for mitigating and resolving the issues. There was a delay of over 2 years that resulted in deterioration of interests of the stakeholders and brought down the customer engagement levels as well. The development costs also went up by $13 Billion. The company could only receive 172 orders as the aircraft demanded fuel efficient jets. In order to deal with the issues, the company adopted the strategy of cost-cutting with the suppliers and labor unions.

• There can be several issues that may come up in the projects under the categories as operational, technical, security, or many more. It shall not be assumed that the project issues will always be because of the technical complexities or errors. It must always be made sure that the risk analysis of all the possible issues is done in advance and the management shall be active to adopt the adequate risk management processes (Dorfler & Baumann, 2014).
• The employees must have effective communication and interaction among themselves irrespective of their designation and organization level. The work culture will be improved only when the employees interact and learn from one another.
• There are several tools, equipment, and material needed for the execution and completion of the project. Requirements and needs analysis shall be a process executed in the planning stage and the employee needs shall be met (Shore, 2009).
• It is necessary to set relevant expectations in the project that can be met by the members of the project team. The stakeholders and the resources shall be brought on a common platform and the expectations shall be documented with consent from all the parties in the initial project phases (Rochfort, 2006).

Overview of the Project

Boeing introduced Dreamliner 1 in the year 2003 and claimed that the aircraft will make use of composite material, will be fuel efficient, and easier to maintain. With the enhancement in the features and decrease in the costs, there was an order of 500 aircrafts that was received in a short span of time.  

However, from the management theories and concepts, the project was declared a failure because of escalated costs, major delays, loss of customers, and investor relations. A total delay of 3 years was involved in the project. The initial delay of six months resulted in escalation of costs to $ 1 Billion and it kept multiplying.

• Supply chain Problems: There were limited fasteners needed by the engineers for the execution and completion of the project. The suppliers and investors wished to grab larger orders and therefore, showed little interest in the project. It resulted in the delay of delivery which had an impact on the linked functionalities. The inability to maintain the supplier relations and absence of training of the workers led to delays and re-works during the project timeline (Tang & Zimmerman, 2009).
• Outsourcing Complexities: There were a few functionalities that were being carried out by the in-house members. The majority of the functions and tasks were outsourced to several suppliers and vendors, such as Alenia Aeronautica, Spirit AeroSystems, etc. These vendors and groups further outsourced the activities to their respective vendor groups and the chain multiplied. This resulted in significant delays for the project as the complexities were increased and only 16% of the overall delivery was completed at the end of the first cycle (Baker, 2013). There were also technical and design complexities reported which negatively impacted the time, costs, and resources. For instance, $18.9 Million were lost in the brake controlling system by Crane which did not comply with the necessary standards (Elahi, Sheikhzadeh & Lamba, 2012).
• High Development Costs: Due to increased functionalities, there was a high initial cost of development that was involved. In order to control these costs, Boeing decided to implement the GSP model.
• Lack of competency: The Company decided to be the system integrated and it was not competent enough to meet the requirements for the same. There were several issues that came up during the project that led to the significant delays. The organization and its management were not competent to deal with the issues to resolve and avoid them in a timely manner. The multi-chain and multi-layered outsourcing model, design & technical competencies, and errors in estimations also enhanced the issues (Mseitif, 2014).  

The delay in the construction and production activities negatively impacted the project and had the worst implication on the project budget. The company decided to use GSP model and cost-cutting strategy to deal with the issues around the project costs. There was a lot of investment done to enhance the operational speed and inadequate due diligence was observed in the initial stages to deal with the risks.

• The resource engagement and satisfaction can be achieved only when they are provided with the guidance & support from the management and are allotted with the activities as per the competencies and skills. Resource assessment and allocation must be based on the adequate analysis and the management shall also arrange for trainings to develop and enhance the skill sets (Denning, 2013).
• The outsourcing of the tasks shall be done only after analyzing and utilizing the in-house competencies to the fullest. The chances of adhering to the desired requirements increased with the involvement of in-house resources and members (Amalraj, 2007).
• There shall be reviews, audits, and inspections done by the management at regular intervals for validating and verifying the project progress.
• An automated tracking system shall be used to monitor the performance of the employees and the project as a whole.

• MAC must make sure that management allotted to the project has the adequate skills to validate and verify the project progress and performance. There shall also be automated tools used to enhance the performance and avoid the issues (Shariff, 2013).
• The stakeholder engagement process must be carried out to ensure that contribution and interest levels are maintained.
• The resources shall be provided with the trainings on the project areas, tools, and concepts so that the skill sets are enhanced and the resources may be able to deal with the risks and issues on their own (Newton, 2015).
• Iterative and agile methods shall be used during the development and management processes so that short-term goals may be defined. The quality and flexibility of the operations will be achieved and the overall scalability will also improve as a result (Csbdu, 2004).
• Procurement plan shall be defined to manage the project procurements and maintain the relations with the supplier groups. Needs assessment shall be done and there shall be use of contractual processes to deal with the procurement issues.
• The use of internal and external data sources shall be done to gain maximum information regarding the project, possible issues, areas to be paid attention to, methodology to be followed, and likewise (Bilkent, 2010).
• There was poor risk handling techniques involved in Airbus and Boeing case studies. MAC shall ensure that risk management plan is prepared and defined so that the risks are managed and taken care of well in advance (Crane, 2013).
• The issues of project delays and overrun of the project budget shall be avoided by conducting reviews and audits at frequent levels and by ensuring that all of the other project areas are in-sync with each other. The streamlined execution of all the project areas will lead to the avoidance of schedule or budget overrun.

References

Amalraj, J. (2007). Project Management: Challenges & Lessons Learned. Retrieved 22 October 2018, from https://www.beg.utexas.edu/energyecon/ua_2007/AB_Project_Mgt_challenges.pdf

Baker, M. (2013). Boeing 787-8 Design, Certification, And Manufacturing Systems Review. Faa.gov. Retrieved 22 October 2018, from https://www.faa.gov/about/plans_reports/media/787_Report_Final.pdf

Bbc. (2012). Factfile: Airbus A380. BBC News. Retrieved 11 October 2018, from https://www.bbc.com/news/uk-11693164

Bilkent. (2010). A Guide to the Project Management Body of Knowledge. Cs.bilkent.edu.tr. Retrieved 22 October 2018, from https://www.cs.bilkent.edu.tr/~cagatay/cs413/PMBOK.pdf

Crane, L. (2013). Introduction to Risk Management. Extensionrme.org. Retrieved 22 October 2018, from https://extensionrme.org/pubs/IntroductionToRiskManagement.pdf

Csbdu. (2004). A Guide to the Project Management Body of Knowledge. Retrieved 22 October 2018, from https://www.csbdu.in/csbdu-old/pdf/A%20Guide%20to%20the%20Project%20Management%20Body%20of%20Knowledge.pdf

Denning, S. (2013). The Boeing Debacle: Seven Lessons Every CEO Must Learn. Comlabgames.com. Retrieved 22 October 2018, from https://comlabgames.com/45-971/instructor/boeing/Boeing%20Debacle_Seven%20Lessons%20Every%20CEO%20Must%20Learn%20%20Forbes_01_17_13.pdf

Dorfler, I., & Baumann, O. (2014). Learning from a Drastic Failure: The Case of the Airbus A380 Program. Taylor & Francis. Retrieved 22 October 2018, from https://www.tandfonline.com/doi/abs/10.1080/13662716.2014.910891

Elahi, E., Sheikhzadeh, M., & Lamba, N. (2012). “An Integrated Outsourcing Framework: Analyzing Boeing’s Outsourcing Program for Dreamliner (B787). Scholarworks.umb.edu. Retrieved 22 October 2018, from https://scholarworks.umb.edu/msis_faculty_pubs/26/

Freimuth, D. (2016). Financial evaluation of the Airbus A380 Neo program. Brage.bibsys.no. Retrieved 22 October 2018, from https://brage.bibsys.no/xmlui/bitstream/handle/11250/2442498/MSc0152016.pdf?sequence=1

Mseitif, J. (2014). Boeing’s Behavior in a Liberalized Marketplace: The 787 Dreamliner Project and Impact on Puget Sound Workers. Digital.lib.washington.edu. Retrieved 22 October 2018, from https://digital.lib.washington.edu/researchworks/bitstream/handle/1773/26912/Mseitif_washington_0250O_13381.pdf;sequence=1

Newton, P. (2015). Principles of Project Management. Retrieved 22 October 2018, from https://www.free-management-ebooks.com/dldebk-pdf/fme-project-principles.pdf

Rochfort, S. (2006). Delay issues cloud A380 visit – Business – Business – smh.com.au. Smh.com.au. Retrieved 22 October 2018, from https://www.smh.com.au/news/business/delay-issues-cloud-a380-visit/2006/11/28/1164476179330.html

Shariff, S. (2013). Assessment of Project Management Skills and Learning Outcomes in Students’ Projects. Retrieved 22 October 2018, from https://www.sciencedirect.com/science/article/pii/S1877042813020363/pdf?md5=16f498b0203d44eb0bb95f5b83d90b6f&pid=1-s2.0-S1877042813020363-main.pdf

Shore, B. (2009). Airbus A380 – Project Failure Lessons Learned. Globalprojectstrategy.com. Retrieved 22 October 2018, from https://globalprojectstrategy.com/lessons/case.php?id=23

Tang, C., & Zimmerman, J. (2009). Managing New Product Development and Supply Chain Risks: The Boeing 787 Case. Retrieved 22 October 2018, from https://eng.umd.edu/~austin/ense622.d/lecture-resources/Boeing787-Outsourcing2009.pdf