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The launch of Boeing’s newest aircraft, the 787 Dreamliner, was linked to heat-related problems in the past in various electronic supposed to be a triumphant moment in the history of Boeing. The devices. GS Yuasa said it could take months to determine whether Dreamliner set a record for booking the most advance orders ever the issue is limited to the battery or involves the jet’s entire elec recorded for a new airplane. Unfortunately, the path to glory has trical system. been marred by a problem with the planes’ battery systems. In Boeing’s supplier management system is complex, with multiple 2013, smoke filled the cabin of a 787 in flight, and another 787 interdependencies among international organizations, all of which made an emergency landing in Japan. Yet another 787 caught fire need to be carefully managed. For example, GS Yuasa’s batter. while on the ground in Boston. The Federal Aviation Administration les must link with the Dreamliner’s electrical power conversion (FAA) grounded all 787s shortly thereafter. It wasn’t just American system, which is manufactured by France’s Thales SA. United planes being grounded, All Nippon Airways Co., Ltd. (Tokyo, Japan) Technologies Corporation’s (Farmington, CT) UTC Aerospace and Japan Airlines Co. Ltd. (Tokyo, Japan) grounded their fleets of Systems (Charlotte, NC) unit supplies the overall power system for Dreamliners as well, and other carriers, such as Air India Ltd. (New each aircraft, which uses 1.45 megawatts of electricity, enough Delhi, India) and LATAM Airlines Group S.A. (Santiago, Chile), also to power 400 homes. Thus, although Boeing oversees its entire temporarily grounded theirs. supply chain, Thales SA originally selected GS Yuasa to supply the batteries Boeing worked frantically to isolate the cause of the battery prob- lems. The 787 was the first commercial aircraft to use lithium-ion The problems that Boeing faced turned the Dreamliner into some- batteries. GS Yuasa Corporation (Kyoto, Japan), a Japanese man- thing of a nightmare. The company’s stock price fell, and Boeing’s ufacturer, was the supplier. The company also supplied batteries backlog of some 850 orders for its aircraft was in jeopardy amid for the International Space Station and electric railcars. Lithium- concern about the plane’s safety. Moreover, buyers demanded ion batteries are known for their high-energy storage capacity, deep discounts because delivery schedules for the planes were low weight, and no memory degradation, but they have also been delayed.
Questions 1. Take a position on the following statement: “Boeing dug its own grave by outsourcing so much of the 787 to its supply chain. The firm could not possibly do an effective job of managing so many suppliers. Do you agree or disagree? Why? What are the advantages and disadvantages of Boeing allowing its suppliers to award contracts for their own supplies of the plane’s components? In your opinion, what is the moral of this story from a supplier management point of view?
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