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I'm saddened to see this latest report in the Seattle Times that Boeing created  serious problems for itself with "excessive outsourcing" on the 787.

Boeing 787’s problems blamed on outsourcing, lack of oversight

By Dominic Gates
Seattle Times Aerospace Reporter
Originally published February 2, 2013

Company engineers blame the 787’s outsourced supply chain, saying that poor quality components are coming from subcontractors that have operated largely out of Boeing’s view.

Another engineer said the number of such faults reported for the Dreamliner is roughly on par with those on Boeing’s previous new jet, the 777, but “on the 787, one big difference is, there’s a preponderance of electrical faults.”

A senior Boeing engineer not directly involved with the 787 said he believes the company’s early delegation of control on 787 outsourcing to multiple tiers of suppliers is now coming back to bite the jet program, though it made belated efforts to tighten up oversight of suppliers.

“The supplier management organization (at Boeing) didn’t have diddly-squat in terms of engineering capability when they sourced all that work,” he said.

Boeing spokesman Marc Birtel declined to answer specific questions for this story, citing the shortage of time, but denied that Boeing’s oversight of its 787 suppliers was insufficient.

“For the 787, they changed the structure” of the supply chain, said Christopher Tang, professor of business administration at the UCLA Anderson School of Management and lead author of a much-cited case study of outsourcing on the 787..

"You only know what’s going on with your tier 1 supplier. You have no visibility, no coordination, no real understanding of how all the pieces fit together."

With a brand new design and so many parts and so many players, it’s a major challenge,” Tang said. “Can the management team trace all the way down the tree to every single supplier and unit? That’s really difficult.

Three years before the 787 was even launched, a paper presented internally at Boeing in 2001 by eminent airplane structures engineer John Hart-Smith predicted the problems that would arise from excessive outsourcing.

Now retired and living in Australia, Hart-Smith said that he is not an electrical systems expert but trusts Boeing’s technical experts in the systems group — “I know a few of them very well” — to resolve the latest battery problem

Nevertheless, he said, the underlying conclusions of his outsourcing paper still apply.

"They needed complete knowledge of what was going on,” said Hart-Smith. “I warned that if they outsourced too much work, the day would eventually come when there wouldn’t be enough in-house capability to even write the specs.”

The senior Boeing engineer with indirect knowledge of the battery and electrical system troubles believes that’s what happened.

“Internally, we may not have the engineering horsepower required to understand the depths of the (battery system) problem as quickly as we prefer,” he said. “We let too much capability slip away from us.”

Nevertheless, he remains optimistic that the 787 program can be turned around.

I'm saddened but not surprised. I retired from Boeing three years ago, and then I was dismayed at the direction Boeing management had embarked on with all the outsourcing. I have diried this previously: Excessive outsourcing probably added 140% - 260% to Boeing's 787 launch costs

The engineers at Boeing are part of a union that's about to vote on its new contract. The Union is recommending rejection due to the ending of pensions for new-hires, but it is widely expected to pass from the members I have talked to. Too bad, I sure appreciate the pension I earned during my 32 years at Boeing.

Originally posted to Lefty Coaster on Wed Feb 06, 2013 at 07:08 PM PST.

Also republished by Koscadia.

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