Boeing Goes Bust: Managing in the Billions
“In the late 1990s, Boeing lost market share to Airbus and in return decided to instead of reducing cost and the selling price of its current aircraft, to innovate a newly designed aircraft capable of nonstop flights between larger spread cities without layovers, better fuel consumption with a new composite body instead of traditional aluminum, and a better pressurization system to allow for more comfort by passengers. The ideal was that this new aircraft that would generate revenues by creating value for customers.
To lower cost and accelerate the development of the new 787 Dreamliner, Boeing turn heavily to outsourcing, both locally and internationally. With the added outsourcing, it was forecasted that the development of the 787 would be cut from six years down to four and cut cost from $10 billion to $6 billion. Due to lack of coordination and on-site support, among other problems, the project went billions of dollars over budget and three years beyond schedule.