Project Management in Corporate Sector - Boeing 787 Dreamliner - Case Study Example

Project Management in Corporate Sector Name: Lecturer: Course: Date: Table of Contents Project Management in Corporate Sector 1 Table of Contents 2 Introduction 3 Background 3 Organisation 3 Expected project deliverable 4 Stakeholders associated with the project 4 Project team size and composition 5 The relative priorities of the relevant constraints 5 Organisational objectives the project supports 6 Critical Analysis of Project failures 7 Project integration management 7 Project Scope Management 7 Project Time Management 8 Project Cost Management 8 Project quality management 8 Project HR management 9 Project communication management 9 Project Risk Management 9 Project procurement management 10 Conclusions and Recommendations 10 Recommendations 10 References 11 Introduction In February 2014, Australian airline Jetstar launched three Boeing 787 Dreamliner airplanes to ply the Sydney-Phuket route. Another airline Qantas also launched the plane for the Melbourne-Phuket route after Australia’s air safety regulator cleared the Boeing 787 Dreamliner to be used for commercial flights in Australia (Creedy 2013). Some observers have commented that Boeing 787 Dreamliner, a project that was sponsored by Boeing Commercial Airlines, will make Boeing the market leader in commercial planes in Australia (Flynn 2014). Boeing 787 Dreamliner project was initiated with the purpose of designing fuel-efficient planes that would carry between 210 and 250 passengers (Allworth 2013). Several characteristics and attributes make Boeing 787 Dreamliner an ideal project of study. It went through several processes, including initiation, planning, executing, controlling and closure. Second, the project was planned with the objective of delivering a fuel-efficient plane within a specified project budget. Execution of the project involved recruiting a team of engineers, subcontractors and suppliers to implement the project. Initiated in 2003, the project closure was to be in 2008. Nevertheless, the project was not successful. Background Organisation The Boeing 787 Dreamliner project was sponsored by Boeing Commercial Airlines, a commercial and defence aircraft manufacturer, based in Everett, Washington. The project was based at Boeing’s facility in Everett in Washington. Majority parts of the plane were to be fabricated in the 134 countries, where the 700 subcontractors operated. The parts were to be assembled at Boeing’s facility in Everett (Allworth 2013). Expected project deliverable Deliverables in project management refer to end-products or services to be given to the client. In the case of Beoing 787 project, the deliverable was a mid-sized and long-range twin-engine airplane. Additionally, the plane was to have the least carbon emission in the airline industry (Holzmann & Shenhar 2010; Lu et al. 2005). Stakeholders associated with the project In project management, managing stakeholders is a critical in ensuring the success of a project as it ensures that the project scope and deliverable can tolerate the needs of each person involved in the project. Stakeholders play a significant role in project success. Additionally, there interest may be affected in one way or the other. In the Boeing 787 project, they included the senior executives, the project team, investors, suppliers and employees (Paul 2005). The employees recruited to join the project team worked in the subassemblies to design and produce plane components. Other stakeholders included subcontractors and industrial partners, who were entrusted with the role of delivering sub-assemblies to Everett for final assembly. The rational for including these stakeholders was to cause leaner and simpler assembly line as well as lower inventory for Boeing Commercial Airlines (Holzmann & Shenhar 2010). The investors at Boeing Commercial Airlines influenced the executive’s decision in approving the project cost and design. Project team size and composition Developing a project team is critical in the project execution and co-ordination. It begins with having a project manager. To attain the exceptional performance of the plane, Boeing created a core team composed of aerospace companies with expertise in the field to design key components. Each team had a project manager in different countries who reported to the senior executive at Everett. The 787 Dreamliner project was made up of a large team size of 700 external companies, which supplied the aircraft parts (Holzmann & Shenhar 2010). The employees recruited in the project ranged between 800 and 1,200. The team was made up of procurement agents, engineers, logistics experts, supply management workers as well as employees from quality management companies. Overall, the team was divided into four key parts, namely supply chain, finances, quality control and outsourcing (York 2011). The relative priorities of the relevant constraints The theory of constraints in project management postulates that constraints limit performance of any system. It suggests that project managers should focus on managing the constraints if the goals of projects have to be improved (IMA 2000). The Boeing 787 project faced various constraints that hindered its success. 787 Dreamliner’s project partners faced the risks of getting into financial default, which could affect the delivery of prototypes of the aircraft. With over 700 partners in the project, the project was constrained by size. In this case, managing the large base of partners needed effective coordination and communication. Indeed, among the constraints in the production model was ensuring that all partners in the project had visibility and access to updated information from Boeing’s headquarters in Everett and that delivery schedules were met (Allworth 2013). Another critical constraint was ensuring supply continuity of plane components, as some subcontractors could cause delays in delivering plan components. Another key constraint included identifying risk or potential problems in the supply chain and addressing them. It had also to evaluate the impact of the problem to the manufacturing process or the partners. For instance, if an essential part was late, it would affect suppliers of related parts (Holzmann & Shenhar 2010). Organisational objectives the project supports DyReyes (2008) points out that projects that are aligned to organisational objectives often benefit from executive management support and commitment. This can be ensured through strategic project management, which helps ensures that an organisation achieves sustainable competitive advantage by aligning strategic corporate objective to project management strategy. It includes communicating the project strategies across all organisations, ensuring the project meets the business objectives and goals (DyReyes 2008). 787 Dreamliner project was mainly aligned to two objectives for the company. One was focused within Boeing while the other was focused on commercial air passenger industry (Holzmann & Shenhar 2010). The project supported Boeing Commercial Airline’s objective of regaining its position as the industry leader in global commercial airplane industry. The company had been the industrial leader since the 1940s until 1970s, when it lost market share to its competitors. The company wanted to regain market leadership in the 2000s. To ensure this, the company led the way in commercial aviation by introducing the 787 Dreamliner, which formed the basis of the project (Allworth 2013). Another organisational objective included responding to customer needs to ensure improved customer base by focusing on lowering cost of air travel and responding to the increased demand for point-to-point flights (York 2011). Another key objective of the project was to deliver customer with innovative aircrafts faster than Boeing's competitor as well as offer than after sale service. Boeing ensured it leveraged a first-rate global team of experts who could provide consummate value and advanced technology to its customers (York 2011). Critical Analysis of Project failures The project failed due to lack of vertical communication, pressure from deadlines, lack or risk management, irrational dragging and lack of focus on project objectives. Project integration management Project integration management ensures that the entire project team is coordinated properly. Kwak & Ibbs (2002) suggests that the success of a project depends on incorporating effective project management strategies through proper utilisation of project management techniques at various levels. The rationale for this is because the success of a project depends on individuals’ efforts (Kwak & Ibbs 2002). The Boeing 787 project team lacked teamwork. For instance, the executive management offered minimal support to the project. Boeing’s board and executive managers at Everett also failed to sufficiently consider the implication of outsourcing the plane’s entire life cycle costs (Moodley 2013). Project Scope Management Project Scope Management checks that all factors and variables that define and control the projects are included. In the case of Boeing 787 project, this included cost control, trade off analysis, having project charter preparation and validation of project scope and initiation (Kwak & Ibbs 2002). The project managers who led the engineering teams in the 134 countries were not assigned on ad-hoc basis. Additionally, there was no methodology to initiate the micro-projects in the 134 countries. Project Time Management Project time management makes sure that a project is completed with a specific time frame. However, Boeing 787 faced challenges in duration estimation, sequencing and controlling schedule. Indeed, due to successive failures, the team could not deliver the project as planned (Holzmann & Shenhar 2010). The project team failed to deliver the project as planned in 2008. Despite being delivered 3 years later, the plane still faced problems associated to design, as it was not crash-resistant. Project Cost Management Project cost management should ensure that a project is finished within an approved budget. Kwak and Ibbs (2002) points out that cost management is important given the cost prevalence of cost overruns, which results in serious cost problems during project execution. The Boeing project faced problems in cost overruns due to poor cost budgeting, estimation and control. Despite of the fact that the primary objective of the project was to reduce production costs, this was not achieved as additional costs associated with coordinating suppliers and transporting the components were incurred (Peterson 2007). Project quality management Project quality management checks whether the project exceeds or meets all activities. The process includes quality control processes, quality assurance and quality audits. There was no clear statement of requirements on standards of quality in the Boeing 787 project. The project was also not supported by sufficient and pertinent documentation for the quality of the plane parts. This is since most plane parts were not tried and tested before. Project HR management Human resource management is applied in project management to ensure optimal use of the workforce involved in the project by motivating, managing and organising them effectively. Despite the fact that Boeing 787 project entailed assigning project responsibilities and roles as well as motivating the engineers with high pay, it lacked conflict resolution strategies and team development. There was poor teamwork and work coordination. The project consisted of some 700 external companies, which however lacked a coordinated plan of action as a team. Project communication management Communication management involves ensuring timely collection, storage and dissemination of project information. The project experienced major delays due to communication problems between Boeing headquarters and hundreds of suppliers. The subcontractors were therefore unable to take the right orders or meet their delivery targets (Pritchard & MacPherson 2005). Project Risk Management Project risk management ensures that risks are identified, analysed and mitigated or addressed. Boeing failed to employ early and ongoing risk analysis. There were no clear risk management strategies. Among the risks taken included the use of parts and components that had never been tried, such as carbon-fibre-reinforced-plastic (CFRP) and which failed to meet safety and quality tests (Holzmann & Shenhar 2010). Project procurement management Procurement management ensures that goods and services are acquired from outside the organisation efficiently. It included administering contracts, negotiating contracts and supply management. There was a problem with coordination of the subcontractors. Having pursued the global concept of outsourcing most plane components, the model failed as most subcontractors had not tried and tested the components before. Conclusions and Recommendations The Boeing 787 Dreamliner project basically involved converting military planes into commercial planes. Despite the fact that it was aligned to the corporate objectives by ensuring that Boeing Commercial Airlines regained its position as the industry leader in global commercial airplane industry, the project did not go as planned. Recommendations Boeing should come up with risk management strategies to assess favourable and unfavourable risks. Unfavourable risks should be mitigated while favourable ones leveraged to the company’s benefit. In the planning process, a risk log and action plan should be created to identify the underlying risks facing the project. All the stakeholders must be informed of the risk log and in case a risk happens, project managers should use the risk log as well as additional management plans to resolve the issue (Kutzavitch 2010). Involvement of the executive at every stage in project should be ensured to show their commitment to the project (Futron 2006). Boeing executive should show commitment through constant communication to the project teams in all the 134 countries. This can ensure maximum team involvement in the project (Ciric & Rakovic 2010). There is also a need to have a clear statement of requirement outlining standards and quality of the plane parts (Attarzadeh, I 2008). Coordinated communication should also be ensured across the projects 700 subcontractors. Indeed, open and flowing communication within the project teams can ensure that changes in project are communicated effectively (Attarzadeh 2008). In this way, the entire team will be kept updated and in-sync (Sendall 2003). 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