A Bit Of History Perhaps Unlearned
Having read the HBR and the reference articles, it is a good presentation. As in any article there are things not covered that are important. One thing is the old adage, "The one thing about history is that you learn you don't learn". And that is what this article confirms in the case of Boeing.
There is a good book titled "The Sporty Game", authored by John Newhouse. It is about the high-risk competitive business of making and selling commercial airliners. The part that pertains to Boeing basically centers around the development of the 747 that Boeing bet the farm on and nearly went bankrupt resulting from unforeseen problems that cropped up along the way. It was an airplane never before imagined relative to its size, weight and demands of the propulsion systems. Malcolm Stamper was in charge of producing the 747 and building a new plant to house the assembly. It was a job at which he worked at "seven days a week, 365 days a year for 4 years," he says. The difference then was the plane was essentially built in-house, albeit more than one Boeing plant and minus the engines that were manufactured by P&W. The point of this history is what the article is in a way about. Translate this to the producing of the 787, adding in the never before done technology and world wide outsourcing.
Also, keep in mind the not so long ago Airbus development and assembly experiences on the A-380, i.e., different versions of the CAD-CAM being used and how things didn't work out so well for awhile.
Even if you have local control over manufacturing and assembly for something you have never done before, you are going to have problems along the way. If however, you chose to out-source to suppliers things you have never done before, look out!
As problems with new methods and modular systems arise, you are in a weak position to respond rapidly, video conferencing doesn't hack it. Then, once you are behind the customer power curve (postponed deliveries, monetary penalties accruing, cancelled orders), all hell breaks loose. In the instance of the 747, the design was good, history has proven that, it took longer to get to that point than what was anticipated. This will be true for the 787 as well.
Out sourcing components has to be done with a supportable reason or reasons in mind. Reduced cost is generally never a good reason as it is only temporary. But there are three good reasons to out-source:
1. The out-source can do it better and has more knowledge than you do, an engine manufacturer or Li-ion battery supplier.
2. The out-source is a share to gain venture to enhance market share, like CFM56 International.
3. The out-source is the only way to enter a particular market with your product, like offset agreements to build a facility to produce some component/components in a country for product entrance to sell your product.
In all instances, the outsourcer has to provide oversight at the out-source facilities no matter where they are located in the world. Often this fact is lost in attempts to reduce costs or downsize employment levels at the outsourcer.