Small Business safety is essential, to achieve it we need to be aware of the…
Why Boeing Has Been in the News, and What Small Business Can Learn From Its Troubles
Aircraft manufacturer Boeing has been in the news of late, unfortunately for all the wrong reasons.
There are issues with their latest model aeroplane, the Boeing 737 Max. Tragically, 346 people from 35 countries have been killed in two crashes of near-new aircraft.
I’m not going to weigh in on the discussions about aircraft engineering problems. I’m neither an engineer nor a pilot, so those technical issues are way above my pay-grade.
Why things go wrong.
What I can talk about, however, is Supply Chains and how sometimes, things go wrong.
A “Supply Chain” is all the activities that lead up to creating a product or service that a customer ultimately purchases – starting from raw materials and going all the way up the point of sale. Think of all the things that must happen before you can purchase a steak for dinner from the butcher.
As you can imagine, Boeing has a very long and complex supply chain. For example, a 747 has 6,000,000 different parts, 171 miles of wiring and 5 miles of tubing. That’s a lot of parts, people, procedures and processes to combine correctly into a plane that flies.
If your product kills.
The ultimate risk for a company is when people are killed by your product. So a company will go overboard to eliminating any risk of that happening. Consequently, large companies with complex and critical supply chains will go to extreme lengths to prevent this from happening. In my book, Small Company, Big Business, Chapters 3 and 4 are all about supply chains – how they work, and how big organisations will examine the entrails of their suppliers to identify and eliminate risk.
But sometimes all that attention just doesn’t work. The sensor that appears to be at the bottom of the fatal flaw on the 737 Max is not made by Boeing. It’s made by an external supplier.
And this isn’t the first time Boeing has run into quality problems in its Supply Chain.
You may recall back in 2013 when a battery caught fire mid-flight on a 787 Dreamliner. Same issue – quality problems with outsourced components. Boeing had outsourced absolute ownership of several pieces of the plane, from design through to managing their own subcontractors.
Cutting costs isn’t always such a good idea.
Boeing had been tempted by the allure of reducing development costs. But they also gave up any oversight of those suppliers. Changes to specifications weren’t communicated properly, and a culture of mistrust developed. Senior Boeing management didn’t want to hear bad news.
I’m not sure if the same culture has led to the current problem with the 737 Max, but I’d be willing to bet that there are similarities.
What we can learn from Boeing in the news.
As Small Business owners, we can take two lessons from the Boeing story.
- Understand that when you are trying to get a contract with a large company, and they ask you a million questions about your operations, there is a good reason.
- How much transparency do you have into your own supply chain? Are there critical components or services that you really are flying blind on like Boeing was?
Granted, your Small Business may not be supplying to Boeing, or some other company where the consequences of product failure are catastrophic.
But if you are tempted to take quality short cuts on either what you supply, or what you buy, consider the consequences next time you get on a plane
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
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