Boeing is the Manufacturing of Commercial Airplane and Military Airplanes - Research Paper Example

Boeing is the Manufacturing of Commercial Airplane and Military Airplanes Introduction The manufacturing of the airplanes has evolved over the years to an industry that is enormously profitable. Boeing is well known for its manufacturing of commercial airplane and military airplanes. Boeing, which is headquartered in Chicago, Illinois, was incorporated in 1916. Boeing has grown tremendously over the years to become among the top global aircraft manufacturer and comes second in aerospace and defense contractor globally based on 2012 revenue. In its growth, Boeing has managed to broaden its portfolio and grow its revenues and profitably, which has translated into improved stakeholder value. Boeing is ranked second after Airbus on being the maker of commercial jets and falls second after Lockheed Martin as a defense contractor. This research paper explores how Boeing leverages leveraged its performance through the use of strategic information architecture systems to meet its strategic enterprise objectives. Background Overtime, Boeing has grown to become one of U.S. biggest commercial jet manufacturers to command a significant global market share. The core objective of Boeing centers of continuing to lead the industry and creating innovative aircrafts and satisfying the entire customer’s growing needs. Boeing aspires to be the strongest, and best integrated aerospace based company globally. Boeing has grown to become the largest global aircraft manufacturer by revenue, deliveries, and orders, as well as one of the largest aerospace and defense contractor globally. Boeing’s Commercial Aviation Services section enables Boeing to provide efficient, timely technical support to help airlines operators to keep their airplanes in optimum operating state. The acquisition of McDonnel Douglas in 1997 played a big role in raising the stature of the company. In 2010, Boeing revenue stood at USD 64.306 billion, which a drop of 6% from 2009 full-year results. The drop in revenue can be linked to multiple factors such as a reduction in airline demand, as well as production interruptions and consequent negative publicity connected to delays for the delivery of 787 Boeing Dreamliner (Boeing, 2011). The Boeing 787 Dreamliner can be regarded to be the most successful product that Boeing has launched in the recent past judged by the numbers of orders that Boeing has received. In the 1st Quarter of 2011, Boeing succeeded in raising its revenue by 2% from the 2010 revenue of $30.79 billion to $31.45 billion. Similarly, Boeing’s net income increased to $3.31 billion in 2010 from a 2009 net income of $1.31 billion. The 250% jump in net income emanate from the streamlining and efficiency procedures that Boeing implemented. During the first half of 2011, Boeing’s net income increased by 17% from $1.31 (2010) to $1.53 billion (2011) (Boeing, 2011). This demonstrates the economic success that Boeing currently enjoys owing to the robustness of its operations and the capability to utilize its resources productively. Boeing’s Organization and Management of Information Systems Boeing has a strong commitment towards the long-term enhancement in its products and processes. Boeing has a strong commitment towards customer satisfaction and improving shareholder value, which necessitates that Boeing continuously work together to enhance the overall efficiency and productivity within its design, administrative, manufacturing, and support organizations. The need for continuously improve products makes technology a central factor in generating the future of the aerospace industry. Boeing’s client base extends in over in over 90 countries, which has necessitated its adoption of partnerships across the globe in technology, service, and manufacturing sectors. Furthermore, Boeing enjoys a robust, in-house, research, design and technology-development departments and has also extended research and develop centers and programs in a number countries. The merging of knowledge management and learning management generate a self learning process based environment of adaptive processes and allowing technology that fosters a highly effective, innovative, and efficient environment (Gitman & McDaniel, 2009). Companies today embrace collaborative processes within the product and service supply chains, which are verified, sufficiently documented, and easily implemented. Research has demonstrated a strong relationship between the degree of implementation and implementation of processes including collaborative planning, forecasting, and replacement with clients with gains derived from integration and implementation of the collaborative processes. Information systems play a vital role in the integration and implementation of collaborative processes since IT plays a central role during the designing, planning, administering, and execution of systems that support global businesses (Ungson & Wong, 2008). Boeing has adopted service outsourcing, both locally and internationally as a model of cost reduction and quickening product life-cycle. The approach sought to minimize production time for Boeing’s 787 from six to four year; consequently, the reduction in production and waiting time has translated to cost reduction from $10 to $6 billion. Businesses processes of any company can be divided into four core utilities, including manufacturing and production, finance and accounting, sales and manufacturing, and human resources. The integration of information systems into its business processes has enabled Boeing to enhance efficiency of existing processes, and launch totally innovative processes, which are bear the capability of modifying business processes. Some of the systems for diverse levels of management that Boeing uses including executive support systems, transaction processing systems, management information systems and decision-support systems (Gitman & McDaniel, 2009. Information systems have undoubtedly become a critical component of contemporary business world; Boeing capitalizes on its information systems (IS) infrastructure to gain competitive advantage. An information system (IS) represents structuring of people, data, processes, processes, and IT, which interact to process, gather, accumulate, retrieve, and produce output required to support business processes within organizations. Airbus utilizes Plainview enterprise to improve its portfolio management. The system that Airbus uses avails timely management information, as well as supporting the process of consistent improvement. Airbus’ utilization of computer integrated manufacturing and industrial data processing, which is grounded in the discipline of product life-cycle management, has contributed significantly in Airbus growth as evidenced by improvements in quality, reduction in cost, and better attainment of deadlines. The acquisition of the project portfolio management system avails Airbus with a single tool for group projects rather than departmental tool. The tool has been effective for activity planning, as well as the overlapping of control of the company’s projects, especially monitoring of resource and time utilization. Airbus CIMPA allows Airbus to enhance its control of projects, as well as control the delivery times and the utilization of resources. Similarly, Boeing has successfully leveraged its performance through the use of strategic information architecture systems that support and shapes its competitive position, minimize a competitive disadvantage, or meet other strategic enterprise objectives (Ungson & Wong, 2008). Boeing has successfully developed several e-enabled solutions that aid airlines to enhance their performance and operational efficiencies (Hill & Jones, 2012). Ethical and/or social issues in the company’s use of information systems Boeing values leadership, integrity, customer satisfaction, quality, and people working together, and contributing to the enhancement of shareholder value. Boeing has a strong commitment towards fair business practices, impartially, ethically and appropriately while at the same time ensuring that, all the business processes and practices are fully compliant with all relevant laws and regulations. Undertaking business in an ethical manner necessitates that integrity underlies all of Boeing’s liaisons stakeholders such as suppliers, employees, customers, and communities. The ability to appreciate, understand and efficiently provide information security services to protect airline’s technology assets and information has been translated into an operational necessity for all airlines. Boeing has instituted cyber security efforts with the motive of establishing information security solutions. Securing the company’s investments and safeguarding company’s information necessitates that companies adopt a fool-proof security strategy and effective leadership. Boeing follows a well-structured information security strategy, which protects its client’s information, protects the company’s digital assets, and ensures the correctness of information disseminated through the aviation framework (Porter, 2008). Boeing’s holistic approach to IT solutions can be linked to its mature security discipline to safeguard its information. Boeing constantly reviews its privacy policy and considers the issue of privacy as a sensitive to the issue of confidentiality in online dealings, as well as safeguarding individual privacy. In some instances, Boeing requests personally identifiable information so as to satisfy the underpinning transaction or purpose of accessing the site. Certain Boeing sites encrypt personal information to ensure that appropriate personnel are able to decode customers’ information (Porter, 2008). Some of the growth areas that Boeing should exploit in the future include cyber security, global security systems, information management, logistics command and control, infrastructure solutions, satellite and ground operations. Boeing’s e-commerce activities Supplier management plays the role of facilitating the purchase of all non-production and services, which Boeing regularly uses. Supplier management uses a combination of purchasing influence of the entire Boeing Company, especially in the negotiation of contracts to ensure that they deliver value to the venture. Boeing takes advantage of its well-crafted supply chain designed to maintain manufacturing and assembly cost low so as to ensure that Boeing’s 787’s development is shortened from six to four years, and its cost of production lowered from $10 to $6 billion. Boeing has also successfully being able to spread the financial costs to its suppliers, which, in turn, minimizes risks of doing business (Snyder, Snyder, & Sankar, 1998). Boeing’s Dreamliner supply chain derives from a tiered structure, which enables Boeing to cultivate partnerships with more than 50 tier-1 strategic partners, who play the role of integrators and assemblers of different parts and subsystems generated by tier-2 suppliers. Boeing’s outsourcing of close to 70% its development and production has contributed to the shortening of the development time occasioned by the leveraging of suppliers’ ability to establish diverse parts, simultaneously (Snyder, Snyder, & Sankar, 1998). Although, the 787 supply chain promises significant potential in minimizing development time and cost, there are underlying supply chain risks such as process risks, demand and supply chains, labor risks, and IT system risks. In its development of Dreamliner, Boeing has encountered several problems such as engine interchangeability issues, issues on the safety of the fuselage, and computer network security issues. Boeing makes use of an Integrated Supplier Information System (ISIS). This is a considerable improvement to Boeing suppliers on several areas of operation dwelling on the management, access, processing, and dissemination of supplier quality data. The new system, ISIS, amalgamates the utility of several unrelated parts and smaller supplier information systems into one, integrated access point. ISIS features components such as Corrective Action, Supplier Approval, and Supplier Surveillance, accompanied by shared modules, which avails user support and access to supplier profiles, as well as schedule notification into a unified suite (Needles, Powers, & Crosson, 2010). ISIS is pertinent to Boeing suppliers’ relationships given that it consolidates information admission for efficient and highly open real-time communication between Boeing and its supply base. The nature of the application fosters collaboration and also structures supplier assignments by utilizing user interface, which structures information in an easy-to-read format for each module (Needles, Powers, & Crosson, 2010). The ISIS Corrective Action module merges both product and system corrective action requests and allows the analysis of the system and product corrective action requests within the same metric. The supplier Surveillance module avails access and coordination of all assessments planning activities, which replaces some of the activities presently done through email. Supplier Approvals module awards suppliers with one place to review all of Boeing approvals status. The module also avails a framework for formal communication with Boeing as a means to complete and submit supplier questionnaires. Common modules feature tools to access and manage information in ISIS and enables suppliers to view their Supplier Quality related events and appointments. The suppliers can access distribution listings for responding and receiving notifications. The Information Panel feature displays core metrics such as surveillance graphical information, BEST quality, BEST delivery, CA product, and CA system. Data and Metrics features represent a comprehensive collection of information displayed within numerous formats availing insight into all aspects of a supplier’s quality performance data. Conclusion Research has demonstrated that customers globally are increasingly becoming demanding, with high expectations on product quality and performance, and value for money. This necessitates that manufacturing companies such as Boeing adopt engineering principles designed to minimize the design cycle time; reduce costs, and time-to-market. Concurrent engineering represents the simultaneous development of product and processes grounded in three elements: collaboration, IT, and processes. Boeing utilizes global information technologies in its design and building of its airplanes. IT allows a paper-less design of the aircrafts, minimize parts and rework, and guarantee a reduction within the development cycle. This helps in the improvement of customer relations, tying the suppliers closer to the production process, aligning the IS with corporate goals, and making use of design-build teams throughout Boeing. Boeing's implementation of integrative information technologies has yielded in improvements, in the production lead-times and quality. Boeing has provided lessons that management information systems ought to closely align with design-build teams in aspects such as knowledge sharing, communicating with end-users, responding to customer needs, establishment of IT architecture, and development of content for end users. References Boeing (2011). Annual Report. Chicago, IL: Boeing. < http://www.boeing.com/assets/pdf/companyoffices/financial/finreports/annual/2012/annual_report.pdf>< http://www.boeing.com/boeing/> Gitman, L. J., & McDaniel, C. D. (2009). The future of business: The essentials. Mason, OH: South-Western Cenage Learning. Hill, C. W. & Jones, G. R. (2012). Strategic management case: An integrity approach, 10th ed. Stamford, CT: Cengage Learning. Needles, B. E., Powers, M., & Crosson, S. V. (2010). Financial and managerial accounting. Mason, OH: South-Western Cengage Learning. Porter, M. E. (2008). On competition. Boston, MA: Harvard Business School Pub. Snyder, C. R., Snyder, C. A., & Sankar, C. S. (1998). Use of information technologies in the process of building the Boeing 777. Journal of Information Technology Management, 9 (3): 31-42. Ungson, G. & Wong, Y. (2008). Global strategic management. New York, NY: M.E. Sharpe. Read More