This paper will examine the management planning of the Boeing Company. To better understand Boeing’s management planning, this paper is broken down into sections: First this paper will evaluate the planning function of Boeing’s management. Second, we will try to provide an analysis of the impacts that the legal, ethical and corporate social responsibility of the Boeing’s management planning by providing relevant examples of each. Finally, this paper will delve on three factors that influence Boeing’s strategic, tactical, operational and contingency planning. By analyzing and evaluating these aspects in Boeing’s management planning, the reader will better understand how it brought success into this company.
Management Planning: Boeing
As the world’s renowned aircraft company, Boeing was founded on July 15, 1916 by William E. Boeing. Since then, the Boeing Company earned its place as a major aerospace and defense corporation. By revenue, Boeing is considered as the largest aircraft manufacturer of commercial jetliners and military aircraft (Pragmatics’ ITES-2S Portal Boeing, 2007). Aside from that, Boeing ranked as the second largest in terms of deliveries around the world and it positioned itself as the second largest defense contractor in the world (Wikipedia the Free Encyclopedia, 2007).
It also attends to demand in producing rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. This is why the company had sprawled globally in 145 countries and its sales had put it in one of the top U.S. exporters list (Boeing in Brief, 2007). All of these achievements by Boeing can be attributed to its brilliant management planning. To get a better insight into Boeing’s management planning, it would be best to evaluate their planning function.
To be an effective and efficient global company, Boeing took advantage of planning to create a long tradition of aerospace leadership and innovation. As a mark of its good leadership, the steady managing of its physical assets had been the evidence of how it attained the top position in the aviation market. Boeing, being the largest producer of commercial aircraft in the world, faced a huge task in keeping its production on schedule.
Each airplane requires more than 1 million individual parts and assemblies, and each airplane is custom configured to meet the purchasing airline’s exact specifications. These parts and assemblies must be completed and delivered on schedule or else the production process will stop and cause unnecessary delays. As a large company, Boeing developed a systematic procedure for selecting goals and strategies that should define their standards for the future success of their business. The deliberate pursuit of those standards should be done through their objective-seeking work (Roney, 2004, p. 33).
This is the reason why Boeing invested in a number of new information systems that would enable them to increase production efficiency. This gives the Boeing management the power to plan and control their logistics in every element of its supply chain. Using Electronic Data Interchange (EDI) and internet links, Boeing is working with suppliers so that they can provide exactly the right part or assembly at exactly the right time.
They call it “Enterprise Resource Planning (ERP) system”, which they currently use within Boeing Commercial Airplanes (BCA). This ERP system automatically generates purchasing data, which is formatted by their supplier network (Boeing Suppliers, 2007). This enables Boeing to proactively produce engineering specifications and drawings available to its suppliers through secure Internet connections, even before starting an airplane into production. As work on the airplane progresses, Boeing keeps every member of the supply chain continually informed of completion milestones achieved and necessary schedule changes.
Lind (2006) cited that as Boeing enabled their enterprise-level research and development (R&D), Boeing’s plans responded effectively and efficiently to improve its business needs. In fact, the effectiveness of their planning by the use of their new systems, Boeing had cut in half the time needed to complete individual assembly processes and it has realized similar reductions in part defect costs. The combined effects of these increased efficiencies are helping Boeing do a much better job of meeting its customers’ needs. Instead of waiting 36 months for delivery, customers can now have their new airplanes in 10 to 12 months.
Because the management planning focused on increasing their production, the impact of their management planning affected their legal aspect in terms of downsizing. This happened when Boeing experienced a slowdown in its aircraft production after the 9/11 terrorist attacks and the company was forced to trim down the number of employees in its plants. This is why Boeing faced many legal actions filed against them by previous employees (Kirkpatrick, 2006).
This also affected the ethical stance of Boeing because they could not justify the 30 percent widespread layoff nationwide. Some employees decried discrimination against the method of their employee reduction program that violated the Discrimination in Employment Act of 1967, which articulated that it is “unlawful for a covered employer to discriminate against employees over the age of 40 by reason of their age”. Boeing should not forget its ethical standards by ignoring the rights of some individuals just to promote efficiency and productivity (Sims, 1994, p. 6)
Despite this, Boeing gained in the aspect of corporate responsibility to the environment as they prided that their planning allowed them to switch to technologies and cooperative partnerships that help ensure a safe and habitable global environment for the future (Health & Safety, Boeing Website, 2007). In fact, they introduced the Boeing 787 Dreamliner, which is aimed to provide airlines with unmatched fuel efficiency, resulting in exceptional environmental performance. The airplane will use 20 percent less fuel for comparable missions than today’s similarly sized airplane. It will also travel at speeds similar to today’s fastest wide bodies, Mach 0.85. The features provide the economic and social benefits of modern air transportation, with the environmental benefits of quiet, fuel-efficient operation.
In this regard, it is deemed that the three factors that influence Boeing’s strategic, tactical, operational and contingency planning are efficiency, productivity and creating cooperative partnerships. Lind (2006) explained that Boeing meets the diverse needs of its markets by making it a focused research organization inclined to promote efficiency, productivity and creating partnerships with its clients. It referred to its management planning as a “catalyst of innovation” for their enterprise. Lind (2006) explained that “Phantom Works” is Boeing’s central research organization and contains a number of R;D programs, or “thrusts,” which address areas of common technology needed for their diverse product lines.
As Boeing is focused on to increase productivity, they broadly use this system across Boeing’s current and future product lines. However, their contingency planning did not fare well when Boeing resorted into layoffs after their production was affected by the 9/11 attacks. Many employees that were laid-off questioned the process of their dismissal (Kirkpatrick, 2006). If Boeing wants to establish itself as an ethical organization, it should inform their employees about the processes of evaluation, what type(s) of monitoring it conducts and how company came into that decision that was implemented by the organization. It is but ethical that Boeing should adhere to truthful disclosure. Truthful disclosure is a necessary condition for maintaining individual employee rights in a company (Ambrose, 1998, p. 77).
In the overall, Boeing’s management planning is sound and understandable because it is a business that should adhere in its efficiency, productivity and cooperative partnerships. As it is operating in an extremely competitive industry, it should manage its assets well and maintain a high regard for technologies to be able to surpass other aviation companies. More than aspiring for financial gains, the Boeing Company should be able to create a veritable contingency plan when production is affected by unexpected factors.
Aside from managing the quality their asset and technology, it should not forget to manage their own people as well. It should maintain legal and ethical processes when Boeing decides to cut off its large labor force. Boeing should remember that it is their employees that have to make any strategy work in its creation. Bad planning, with regards to its ethical stance to employees can be bad for their reputation. Thus, it is recommended that Boeing should develop a contingency plan of appearing to be transparent when it comes to evaluating the performance of its employees.
Ambrose, M. L. (1998). Chapter Four Electronic Performance Monitoring: a Consideration of Rights. In Managerial Ethics: Moral Management of People and Processes, Schminke, M. (Ed.) (pp. 61-77). Mahwah, NJ: Lawrence Erlbaum Associates.
Boeing in Brief. (2007). About Us. Retrieved July 16, 2007
Environment ; Safety. (2007). About Us. Retrieved July 16, 2007, from Boeing Website: http://www.boeing.com/aboutus/environment/prod_tech.html.
Kilpatrick, J.J. (2006, January 2). On Getting Bounced at Boeing. Retrieved July 16, 2007, from Townhall.com: http://www.townhall.com/columnists/JamesJKilpatrick/2006/01/02/on_getting_bounced_at_boeing.
Lind, J. (2006, September-October). Boeing’s Global Enterprise Technology Process: Personality-Driven Research is Avoided by Applying Systems Engineering to R;D Management in the Company’s Central Research Organization. Research-Technology Management 49(5): 36-43.
Pragmatics’ ITES-2S Portal Boeing Pragmatics, Inc. Retrieved July 16, 2007, from Pragmatics: https://ites-2s.pragmatics.com/metadot/index.pl?op=show;iid=2232.
Roney, C. W. (2004). Strategic Management Methodology: Generally Accepted Principles for Practitioners. Westport, CT: Praeger.
Suppliers. (2007). Boeing ERP Application. Retrieved July 16, 2007, from Boeing Website: http://www.boeing.com/companyoffices/doingbiz/edi/erp_guide.html.
Wikipedia the Free Encyclopedia. The Boeing Company. Retrieved July 16, 2007, from Wikipedia: http://en.wikipedia.org/wiki/Boeing..