Boeing Vs Airbus Competition

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Lean Synchronization at Boeing

The author of this report has been asked to focus on a particular realm and part of operations management as it relates to a particular firm. The operations management facet that shall be the focus of this report is lean synchronization and the company that shall be the focus is aircraft manufacturer Boeing. Boeing has done very well for itself in the grand scheme of things but they face competition from a good number of companies with the largest competitor being Airbus. Boeing has never rested when it comes to the adjustments and pivots it makes. Indeed, they have been in the news and/or raised the attention of government regulatory agencies like the National Labor Relations Board. While Boeing is facing heavy competition and operational management challenges including from the government and overall political climate, they are making the right overall moves in terms of lean synchronization and overall operation management principles.

Analysis

Boeing is headquartered in Chicago, Illinois. They were founded in 1916 and they currently employ about 165,500 employee. As noted in the introduction, their main competitor is private company Airbus. Other companies that Boeing must deal with as competitors would include Lockheed Martin, Northrop Grumman, Raytheon, NASA (the government agency) and General Dynamics Corporation. At this time, Boeing is the unquestioned giant of the group with Airbus being the closest. Revenue for the most recent year came to about $94.94 billion USD for Boeing and about $73.80 billion USD. Lockheed Martin comes in a distant third at $45.40 billion USD. On the whole, the industry focuses on three major industries. Those industries are the civilian passenger transportation community, the transportation of cargo (e.g. UPS, FedEx, etc.) and the military sector. As for the latter, many military planes are actually repurposed or revamped versions of the civilian planes that are used for different applications (Yahoo Finance, 2015). As a related example, the AR-15 is a semi-automatic/civilian version of the M-16, an automatic version of the rifle that is used by the United States military (Chang, 2013).

As the name would suggest, lean synchronization is the melding of two major tactics and practices when it comes to operations management. The first part is the "lean" realm of operations management. Indeed, it is desired and sought after by many companies to operate on a basis that equips the business with the resources and labor that is needed but in a way that keeps things as minimalist and dialed down as possible. For example, if the current work orders need about twenty people, then there will be roughly twenty people on hand rather than extras. There may be a few extra to prepare for blips in demand and workload. Indeed, this is proper risk management and should be done. However, having a workforce that is too bloated and wasteful is the antithesis of a lean approach. If there are peaks and valleys in the workforce that is needed, there are ways to prepare for this but this would always be done in ways that avoid extra costs that can be avoided with a little forethought (Tsai, Yang & Lin, 2007).

The other part of the "lean synchronization" equation is the synchronization part. Just like most companies, Boeing has disparate locations all over the United States. A lot of the time, disparate locations around a country or even the world can lead to situations where different locations are doing quite different things. Sometimes this is unavoidable and is part of doing business in the region and/or with a wide array of products. However, companies like Boeing go out of their way to keep these variations to a minimum because doing so keeps costs down. A good related example would be the automobile industry. Indeed, the Cadillac Escalade looks quite different on the outside from other General Motors products like the Tahoe and the Suburban. However, if one were to look a little deeper, one would find that the underlying mechanicals of the three models are all quite similar and this is by design. Much the same thing can be seen with international lines. Indeed, the platforms that General Motors uses in areas or countries like India, Australia and so forth often look different and there are usually different model names. However, the base platforms are usually similar if not identical to those used in the United States and the rest of North America. Boeing is no different. Obviously, they have to align and synchronize with the compliance and preference directives of the nation of the buyer and the buyer themselves (respectively) but the base platforms used are usually very similar and this is to keep things as simple and cost-efficient as possible.

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This is the hallmark and foundation for lean synchronization. It is keeping things lean and mean while at the same thing keeping things the same as much as is reasonably possible while still delivering a complete and effective product to the end users, whether those users be the United States military, an airline or a logistics company that needs Boeing's planes to move cargo and other materials (Tsai, Yang & Lin, 2007).

Boeing actually must engage in lean synchronization because the marketplace truly demands it. It is much like retailers who import a lot of goods from China. Even if such companies catch a lot of flak from some corners for doing so, doing otherwise would put a retail at a distinct disadvantage. Further, that disadvantage could be to the point that it puts the company out of business or at least leads to a lot of market share loss. The reason for this is that the net cost of products would go up and that cost would either have to be eaten (unlikely) or passed on to the buyer. If Boeing were to use inferior or otherwise more costly practices with their customers, they would tend to eschew that and instead buy from Airbus or another competitor instead. Indeed, a lot of planes in the United States commercial airline fleets are Airbus planes and the author of this report does not doubt for a second that Airbus would love to increase their market share in the United States and in other parts of the world (Team, 2015).

Analysis

Even with the possibility of Boeing lying dormant on lean synchronization, they have certainly not done so. Indeed, they are being very careful about his operational practice. One example would be where they choose to have their operations. Indeed, one example of this is the fact that Wichita, Kansas had a Boeing location for a long time. Even better, Wichita is very much like the greater Seattle area in that the airline industry has a very strong presence in that area, even if Wichita is much smaller at roughly half a million people metro-wide. Other aerospace companies like Lockheed and Raytheon have a strong presence there. However, Boeing made a calculated decision to end operations in Wichita. They did so because they decided to roll operations in Wichita into other locations and thus reduce the amount of locations they had overall without reducing the work that was being done. Boeing spent nearly a century in Wichita, dating back eighty-five years. The work done in Wichita has been moved to Oklahoma City, San Antonio and Seattle. The first of those three cities is a scant three hour drive-time away from Wichita (McMillin, 2014).

Another way that Boeing has kept costs down is being very careful about where they build new plants. However, they have encountered some blowback for some of the decisions they have made and why they ostensibly made the ones they did. One sterling example was the recent controversy in Boeing allocating work to South Carolina instead of several other sites that were up for review. Many assailed Boeing for making this choice as they as it as a bald-faced attempt at avoiding union shops and thus paying higher wages to the people in those shops as a result. Even the National Labor Relations Board (NLRB) got into the fray when they asserted that Boeing. The NLRB tried to assert that the decision to move more operations to South Carolina was at the expense of machinists in the Puget Sound area and that it was "illegally punishing" the machinists in doing so. The complaint was eventually dropped and Boeing moved on but this gives one an idea of just how dicey it can be to make even basic decisions about where to operate and why (Song, 2012).

One thing that Boeing should be very wary of is that Airbus is starting to move in on their turf. Indeed, the phenomenon that has been seen with the automotive industry with firms like Kia, Hyundai and Toyota building a great many of their cars either in the United States or in other parts of North America (e.g. Mexico and Canada), Airbus seems to be taking the fight to Boeing on their home soil. Even more brazen are two….....

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