UW Foster School of Business Professor Dick Nolan guest blogged for the Harvard Business Review about the dark side of Boeing’s new 787 Dreamliner engineering and manufacturing feat – outsourcing of intellectual capital to Asia. Here is an excerpt from his recent post:
On Dec. 15, after two-and-a-half years of teeth-gnashing problems and delays that cost Boeing more than $10 billion in contractual penalties, the 787 Dreamliner completed its maiden flight, making aviation history in more ways than one.
With its new composite skin and sculptured structure, it is the most technologically advanced commercial airplane ever. Offering a lighter but stronger and more aerodynamic structure, the 787 is designed to be quieter and more fuel-efficient than other commercial jets, allowing carriers to bypass hubs and whisk many more passengers point to point cheaper, faster, and with new levels of in-flight comfort. After announcing the Dreamliner, Boeing booked a huge number of advanced orders for the plane (nearly 1,000), curtailing to a slow crawl new orders for rival Airbus’s giant 380 plane.
But there’s a dark side to this story. In trying to keep down Airbus, Boeing may be creating a much more dangerous competitor, one that likely will come from Japan, China, or India — countries that will own the markets for new airplanes in the near future and are in various stages of building their own commercial-airplane-manufacturing industries.
Read Professor Nolan’s full blog article at Harvard Business Review: “Is Boeing’s 787 Dreamliner a Triumph or Folly?” Professor Nolan argues that the extensive outsourcing by Boeing to build the Dreamliner airplane could lead to increased competition in Asia. What do you think?