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Philip Condit and the Boeing 777: from Design and Development to Production and Sales

3rd December 2009

Philip Condit and the Boeing 777: from Design and Development to Production and Sales


Isaac Cohen

San Jose State University (taken from: Strategic management: Competitive and Globalization by Hitt, Ireland, Hoskisson) Following his promotion to Boeing CEO in 1988, Frank shrontz looked for ways to stretch and upgrade the Boeing 767 – an eight year old widebody twin jetin order to meet Airbus competition. Airbus had just launched two new 300seat widebody models, the two engines A330 and the fourengine A340. Boeing had no loosest jetliner in service, nor did the company plan to develop such a jet.

To find out whether Boeing’s customers were interested in a doubledecker 767, Philip Condit, Boeing executive Vice President and future CEO (1996) met with United Airlines Vice President Jim Guyette. Guyette rejected the idea outright, claiming that an upgraded 767 was no match to Airbus new model transports. Instead, Guyette urged Boeing to develop a brand new commercial jet, the most advanced airplane of its generation. Shrontz had heard similar suggestions from other airline carriers. He reconsidered Boeing’s options, and decided to abandon the 767 idea in favor of a new aircraft program. In December 1989, accordingly he announced the 777 project and put Philip Condit in charge of its management. Boeing had launched the 777 in 1990: delivered the first jet in 1995, and by February 2001, 325 B777s were flying in the services of the major international and US airlines.1 Condit faced a significant challenge in managing the 777 project. He wanted to create an airplane that was preferred by the airlines at a price that was truly competitive, He sought to attract airline customers as well as cut production costs, and he did so by introducing several innovations –both technological and managerial – in aircraft design, manufacturing, and assembly. He looked for ways to revitalize Boeing’s outmoded engineering production system, and update Boeing’s manufacturing strategies. And to achieve these goals, Condit made continual efforts to spread the 777 programinnovations company wide.

Looking back at the 777 program, this case focuses on Condit’s efforts Was the 777 project successful and was it cost effective? Would the development of the 777 allow Boeing to diffuse the innovations in airplane design and production beyond the 777 program? Would the development of the 777s permit Boeing to revamp and modernize its aircraft manufacturing system? Would the making and selling of the 777 enhance Boeing competitive position relative to Airbus, its only remaining rival?

The Aircraft Industry

Commercial aircraft manufacture was an industry of enormous risks where failure was the norms not the exception. The number of large commercial jet makers had been reduced from four in the early 1980s Boeing, McDonnell Douglass, Airbus and Lockheed to two in late 1990s, turning the industry into a duopoly and pitting the two survivors Boeing and Airbus one against the other. One reason why aircraft manufacturers so often fabled was the huge cost of product development. 1 the case was presented in the October 2000,. Meeting of the North American Case research Association at San Antonio.


Developing a new jetliner required an up front investment of up to $15 billion (2001 dollars), a load time of 5 to 6 years from launch to first delivers and the ability to sustain a negative cash flow throughout the development phase. Typically, to break even on an entirely new Jetliner: aircraft manufacturers needed to sell a minimum of 300 to 400 planes and at least 50 planes per year. Only a few commercial airplane programs had ever made moneys. The price of an aircraft reflected its high development costs. New model prices were based on the average cost of producing 300 to 400 planes, not a single plane Aircraft pricing embodied the principle of learning by doing, the so called “learning curve”, workers steadily improved their skills during the assembly process, and as a result, labor cost fell as the number of planes produced rose.

The high and increasing cost of product development prompted aircraft manufacturers to utilize subcontracting as a risksharing strategy. For the 747, the 767, and the 777, the Boeing Company required subcontractors to share a substantial part of the airplane’s development costs. Airbus did the same with its own latest models. Risk sharing subcontractors performed devalued design work and assembled major subsections of the new plane while airframe integrators (i.e. aircraft manufacturers) designed the aircraft, integrated its systems and equipment, assembled the entire plane, marketed it, and provided customer support for 20 to 30 years Both the airframe integrators and their subcontractors were supplied by thousands of domestic and foreign aircraft components manufacturers

Neither Boeing, nor Airbus, nor any other postwar commercial aircraft manufacturer produced jet engines. A risky and costly venture, engine building had become a highly specialized business. Aircraft manufacturers worked closely with engine makers – General Electric, Pratt and whimsy and Rolls Royce – to set engine performance standards. In most cases new airplanes were offered with a choice of engines. Over time, the technology of engine building had become so complex and demanding that It took longer to develop an engine than an aircraft. During the life of a Jetliner, the price of the engines and their replacement parts was equal to the entire price of the airplane.

A new model aircraft was normally designed around an engine, not the other way around. As engine performance improved, airframes were redesigned to exploit the engine’s new capabilities. The most practical way to do so was to stretch the fuselage and add more seats in the cabin Aircraft manufacturers deliberately designed flexibility into the airplane so that future engine improvements could facilitate later stretching. Hence the importance of the ”family concept” in aircraft design, and hence the reason why aircraft manufacturers introduced families of planes made up of derivative Jetliners built around a basic model, not singled standardized models.

The commercial aircraft Industry, finally gained from technological innovations in two other industries. More than any other manufacturing industry, aircraft construction benefited from advances in material applications and electronics. The development of metallic and nonmetallic composite laterals played a key role in improving airframe and engine performance. On the one hand, composite materials that combined light weight and great strength were utilized by aircraft manufacturers, on the other, heatresisting alloys that could tolerate temperatures of up to 3,000 degrees were used by engine makers similarly advances in electronics revolutionized avionics. The

Increasing use of semiconductors by aircraft manufacturers facilitated the miniaturization of cockpit instruments, and more important, it enhanced the use of computers for aircraft communication, navigation, instrumentation, and testing. The use of computers contributed, in addition, to the design, manufacture and assembly of new model aircraft.

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The Boeing Company

The history of the Boeing Company may be divided into two distinct periods – the piston era and the let age. Throughout the piston glad Boeing was essentially a military concluder producing fighter aircraft In the 1920s and 1930s, and bombers during World War II. During the jet age, beginning in the 1950s, Boeing had become the world’s largest manufacturer of commercial aircraft, deriving most of its revenues from selling Jetliners Boeing’s first jet was the 707. The Introduction of the 707 in 1958 represented a major breakthrough in the history of commercial aviation; lt allowed Boeing to gain a critical technological lead over the Douglas Aircraft company, its closer competitor. To benefit from government assistance in developing the 707, Boeing produced the first jet in two versions: a military tanker for the Air Force (k135) and a commercial aircraft for the airlines (707120). The company however, did not recoup its own investment until 1964, six years after it delivered the first 707, and twelve years after it had launched the program. In the end, the 707 was quite profitable, selling 25 percent above its average cost.

Boeing retained the essential design of the 707 for all its subsequent narrowbody singleaisle models (the 727, 757. and 757), introducing incremental design improvements, one at a time. One reason why Boeing used shared design for future models was the constant pressure experienced by the company to move down the learning curve and reduce overall development costs.

Boeing introduced the 747 in 1970. The development of the 747 represented another breakthrough; the 747 wide body design was one of a kind; It had no real competition anywhere in the industry. Boeing bet the entire company on the success of the 747, spending on the project almost as much as the company’s total net worth in 1965, the year the project started. In the shortrun, the outcome was disastrous. As Boeing began delivering its 747s, the company was struggling to avoid bankruptcy.

Cutbacks in orders as a result of a deep recession coupled with production inefficiencies and escalating costs, created a severe cash shortage that pushed the company to the bank. As sales dropped, the 747’s break even point moved further and further into the future.

Yet, in the long run, the 747 program was a triumph. The Jumbo jet had become Boeing’s most profitable aircraft and the industry’s most efficient Jetliner. The new plane helped Boeing solidify its position as the industry leader for years to come, leaving McDonnell Douglas far behind, and forcing the Lockheed Corporation to exit the market. The new plane, furthermore, contributed to Boeing’s manufactured strategy in two ways First, as Boeing Increased its reliance on outpouring, six major subcontractors fabricated 70 percent of the value of the 747 airplane, thereby helping Boeing reduce the project’s risks. Second, for the first time, Boeing applied the family concept in aircraft design to a widebody jet, building the 747 with wings large enough to support a stretched fuselage with bigger engines, and offering a variety of other modifications in the 747’s basic design. The 747400 (1989) is a case in point. In 1997, Boeing sold the stretched and upgraded 747400 in three versions, a standard get, a freighter and a ”combi”, (a Jetliner whose main cabin was divided between passenger and cargo compartments).

Boeing developed other successful models. In 1969, Boeing introduced the 737, the company’s narrowbody flagship, and in 1982 Boeing put into service two additional jetliners, the 757 (narrowbody) and the 767 (widebody). By the early 1990s, the 737, 757, and 767 were all selling profitably.

Following the Introduction of the 777 in 1995, Boeing’s families of planes included the 737 for shortrange travel, the 757 and 777 for medium range travel and the 747 and 777 for medium to long range travel (Exhibit 1).

Exhibit 1

In addition to building jetliners, Boeing also expanded its defenses space and Information businesses in 1997, the Boeing Company took a strategic gamble, buying the McDonnell Douglas Company in a $ 14 billion stock deal. As a result of the merger, Boeing had become the world’s largest manufacturer of military air craft, NASA’S largest supplier, and the Pentagon’s second largest contractor (after Lockheed). Nevertheless, despite the growth in its defense and space businesses, Boeing still derived most of its revenues from selling Jetliners. Commercial aircraft revenues accounted for 59 percent of Boeing’s $49 billion sales in 1997 and 63 percent of Boeing’s $56 billion sales in 1998.

Following its merger with McDonnell, Boeing had one remaining rival: Airbus industrie. In 1997, Airbus booked 45 percent of the worldwide orders for commercial Jetliner’s and delivered close to 1/3 of the world wide industry output in 2000, Airbus shipped nearly 2/5 of the worldwide Industry

output (Exhibit 2)

Exhibit 2: Market Share of Shipments of Commercial Aircraft: Boeing, McDonnell Douglas (MD), Airbus, 19922000 Airbus’ success was based on a strategy that combined cost leadership with technological leadership.

First, Airbus distinguished itself from Boeing by incorporating the most advanced technologies into its planes.

Second, Airbus managed to cut costs by utilizing a flexible, lean production manufacturing system that stood In a stark contrast to Boeing’s mass production system As Airbus prospered, the Boeing company was struggling with rising costs, declining productivity, delays in deliveries, and production inefficiencies. Boeing Commercial Aircraft Group lost $1.8 billion in 1997 and barely generated any profits in 1998. All through the 1990s, the Boeing Company looked for ways to revitalize its outdated production manufacturing system, on the one hand, and to introduce leading edge technologies into its jetliners, on the other. The development and production of the 777, first conceived of in 1989, was an early step undertaken by Boeing managers to address both problems.

The 777 Program

The 777 program was Boeing’s single largest project since the completion of the 747. The total development cost of the 777 was estimated at $6.3 billion and the total number of employees assigned to the project peaked at nearly 10,000. The 777’s twinengines were the largest and most powerful ever built (the diameter of the 777′s engine equaled the 737% fuselage), the 777’s construction required 132,000 uniquely engineered parts (compared to 70,000 for the 767), the 777’s seat capacity was identical to that of the first 747 that had gone into service in 1970, and its manufacturer empty weight was 57 percent greater than the 767’s. Building the 777 alongside the 747 and 767 at its Everett plant near Seattle, Washington, Boeing enlarged the plant to cover an area of 76 football fields.

Boeing’s financial position in 1990 was unusually strong. With a 21 percent rate of return on stockholder equity, a long term debt of just 15 percent of capitalization, and a cash surplus of $3.6 billion, Boeing could gamble comfortably. There was no need to bet the company on the new project as had been the case with the 747, or to borrow heavily as had been the case with the 767. Still, the decision lo develop the 777 was definitely risky; a failure of the new jet might have triggered an irreversible define of the Boeing Company and threatened its future survival.

The decision to develop the 777 was based on market assessment – the estimated future needs of the airlines. During the 14year period, 19912005, Boeing market analysts forecasted a +100 percent increase in the number of passenger males traveled worldwide, and a need for about 9,000 new commercial Jets. Of the total value of the jetliners needed In 19912005, Boeing analysts forecasted a $260 billion market for wide body Jets smaller than the 747. An increasing number of these wide body Jets were expected to be larger than the 767.

A Consumer driven product

To manage the risk of developing a new jetliners aircraft manufacturer had first sought to obtain a minimum number of firm orders from interested carriers, and only then commit to the project. Boeing CEO Frank Shrontz had expected to obtain 100 initial orders of the 777 before asking the Boeing board to launch the project, but as a result of Boeing’s financial strength, on the one hand, and the Increasing competitiveness of Airbus, on the other Shrontz decided to seek the board’s approval earlier. He did so after securing only one customer United Airlines On October 12, 1990, united had placed an order for 34 777s and an option for an additional 34 aircraft, and two weeks later, Boeing’s board of directors approved the project

Negotiating the sale, Boeing and United drafted a hand written agreement (signed by Phillip Condit and Richard Albrecht, Boeing’s executive vice presidents and Jim Guyette, United’s Executive vice President) that granted United a larger role in designing the 777 than the role played by any airline before. The two companies pledged to cooperate closely in developing an aircraft with the “best dispatch reliability in the industry” and the “greatest customer appeal In the Industry.” “We will endeavor to do it right the first time with the highest degree of professionalisms” and with “candor, honesty, and respect” [the agreement read]. Asked to comment on the agreement, Philip Condit, said: “We are going to listen to our customers and understand what they want. Everybody on the program has that attitude.” Gordon McKinzie, United’s 777 program director agreed: “In the past we’d get brochures on a new airplane and its options . . . wait four years for delivers and hope we’d get what we ordered, This time Boeing really listened to us.” Condit invited other airline carriers to participate in the design and development phase of the 777.

Altogether, eight carriers from around the world (United, Delta, America, British Airways, Qantas, Japan Airlines, All Nippon Airways, and Japan Air System) sent full time representatives to Seattle;  British Airways alone assigned 75 people at one time. To facilitate integration between its design engineers and representatives of the eight carriers, Boeing introduced an Initiative called “Working together” “If we have a problem,” a British Airways production manager explained, “we go to the source design engineers on the lPT [Integrated Product Team], not service engineer(s). One of the frustrations on the 747 was that we rarely got to talk to the engineers who were doing the work”

Exhibit 3

“We have definitely influenced the design of the air craft” a United 777 manager said, mentioning changes in the design of the wing panels that made it easier for airline mechanics to access the slats (slats, like flaps, increased lift on takeoffs and landings), and new features in the cabin that made the plane more attractive to passengers. Of the 1,500 design features examined by representatives of the airlines, Boeing engineers modified 300 (Exhibit 3). Among changes made by Boeing was a redesigned overhead bin that left more standup headroom for passengers (allowing a sixfootthree tall passenger to walk from aisle to aisle), “flattened” side wails which provided the occupant of the window seat with more room, overhead bin doors which opened down and made It possible for shorter passengers to lift baggage into the overhead compartment, a redesigned reading lamp that enabled flight attendants to replace light bulbs, a task formerly performed by mechanics, and a computerized flight deck management system that adjusted cabin temperature, controlled the volume of the public address system, and monitored food and drink inventories.

More important were changes in the interior configuration (layout plan) of the aircraft To be able to reconfigure the plane quickly for different markets of varying travel ranges and passengers loads, Boeing’s customers sought a flexible plan of the interior. On a standard commercial Jet, kitchen galleys, closed, lavatories, and bars were all removable in the past but were limited to fixed positions where the major floor structure was reinforced to accommodate the “wet” load. On the 777, by contrast, such components as galleys and lavatories could be positioned anywhere within several “flexible zones” designed into the cabin by the joint efforts of Boeing engineer and representatives of the eight airlines. Similarly, the flexible design of tie 777’s seat tracks made it possible for carriers to increase the number of seat combinations as well as reconfigure the seating arrangement quickly. Flexible configurations resulted, in turn, in significant cost savings; airlines no longer needed to take the aircraft out of service for an extended period of time in order to reconfigure the interior The airline carriers also influenced the way in which Boeing designed the 777 cockpit. During the program definition phase, representatives of United Airlines, British Airways and Quantas – three of Boeing’s clients whose fleets included a large number of 747400s – asked Boeing engineers to model the 777 cockpit on the 747400’s. In response to these requests, Boeing introduced a shared 747/777 cockpit design that enabled its airline customers to use a single pool of pilots for both aircraft types at a significant cost savings.

Additionally the airline carriers urged Boeing to increase its use of avionics for inflight entertainment. The 777, as a consequence, was equipped with a fully computerized cabin. Facing each seat on the 777, and placed on the back of the seat in front, was a combined computer and video monitor that featured movies, video programs, and interactive computer games. Passengers were also provided with a digital sound system comparable to the most advanced home stereo available, and a telephone. About 40 percent of the 777’s total Computer capacity was reserved for passengers in the cabin.

The 777 was Boeing’s first fly by wire (FBW) aircraft, an aircraft controlled by a pilot transmitting commands to the moveable surfaces (rudder, flaps, etc.) electrically; not mechanically. Boeing installed a state of the art FBW system on the 777 partly to satisfy its airline customers, and partly to challenge Airbus’ leadership in flight control technology, a position Airbus had held since it introduced the world’s first FBW aircraft, the A320, in 1988.

Exhibit 4 Global Suppliers

Lastly Boeing customers were invited to contribute to the design of the 777’s engine. Both United Airlines and All Nippon Airlines assigned service engineers to work with representatives of Pratt and Whitney (P&W) on problems associated with engine maintenance. P&W held three specially scheduled “airline conferences”. At each conference, some 40 airline representatives clustered around a full scale mockup of the 777 engine and showed Pratt and Whitney engineers gap in the design, hardtoreach points, visible but inaccessible parts, and accessible but invisible components.

At the initial conference, Pratt and Whitney picked up 150 airline suggestions, at the second, 50, and at the third, 10 more suggestions.

A Globally Manufactured Product

Twelve international companies located in 10 countries, and 18 more US companies located in 12 states, were contracted by Boeing to help manufacture the 777. Together, they supplied structural components as well as systems and equipment. Among the foreign suppliers were companies based in Japan, Britain, Australia, Italy, Korea, Brazil, Singapore, and Ireland; among the major US subcontractors were the Grumman corporations Rockwell (later merged with Boeing), Honeywell, United Technologies, Bendix and the Sunstrand corporation (Exhibits 4 and 5). Of all foreign participant the Japanese played the largest role. A consortium made up of Fuji head Industries,

Kawasaki Heavy industries, and Mitsubishi Heavy Industries had worked with Boeing on its widebody models since the early days of the 747. Together, the three Japanese subcontractors produced 20 percent of the value of the 777’s airframe (up from 15 percent of the 767’s). A group of 250 Japanese engineers had spent a year in Seattle working on the 777 alongside Boeing engineers before most of its members went back home to begin production. The fuselage was built in sections in Japan and then shipped to Boeing’s huge plant at Everett, Washington for assembly.

Boeing used global subcontracted as a marketing tool as well. Sharing design work and production with overseas firms, Boeing required overseas carriers to buy the new aircraft. Again, Japan is a case in point. In return for the contact signed with the Mitsubishi, Fuji, and Kawasaki consortium which was heavily subsidized by the Japanese government Boeing sold 46 777 jetliners to three Japanese air carriers: All Nippon Airways, Japan Airlines, and Japan Air System.

Exhibit 5 Global Components

A Family of Planes

From the outset, the design of the 777 was flexible enough to accommodate derivative Jetliners. Because all derivatives of a given model shared maintenance, framing, and operating procedures, as well as replacement parts and components, and because such derivatives enabled carriers to serve different markets at lower costs, Boeing’s clients were seeking a family of planes built around a basic model, not a single 777. Condit and his management team, accordingly, urged Boeing’s engineers to incorporate the maximum flexibility into the design of the 777

The 777’s design flexibility helped Boeing manage the project’s risks. Offering a family of planes based on a single design to accommodate future changes in customers’ preferences, Boeing spread the 777 project’s risks among a number of models all belonging to the same family The key to the 777’s design efficiency was the wing. The 777 wings, exceptionally long and thin, were strong enough to support vastly enlarged models. The first model to go into service, the 777200, had a 209 foot long fuselages was designed to carry 305 passengers in three class configurations, and had a travel range of 5,900 miles in its original version (1995), and up to 8,900 miles in its extended version (1997). The second model to be introduced (1998), the 777300, had a stretched fuselage of 242 ft (10 foot longer than the 747) was configured for 379 passengers (3class), and flew to destination’s of up to 6,800 miles away. In the alltourist class configuration, the stretched 777300 could carry as many as 550 passengers.

Digital Design

The 777 was the first Boeing Jetliner designed entirely by computers. Historically, Boeing had designed new planes in two ways: paper drawings and fullsize models called mockups. Paper drawings were two dimensional and therefore Insufficient to account for the complex construction of the three dimensional airplane. Full scale mockups served as a backup to drawings

Boeing engineers used three classes of mockups. Made up of plywood or foam, class 1 mockups were used to construct the plane’s large components an three dimensions, refine the design of these components by carving into the wood or foam, and feed the results back into the drawings. Made partly of metals class 2 mockups addressed more complex problems such as the wiring and tubing of the airframe, and the design of the machine tools necessary to cut and shape the large components.

Class 3 mockups gave the engineers one final opportunity to refine the model and thereby reduce the need to keep on changing the design during the actual assembly process or after delivery.

Despite the engineers’ efforts, many parts and components did not fit together on the final assembly line but rather “interfered” with each others, that is, overlapped in space. The problem was both pervasive and costly; Boeing engineers needed to rework and realign all overlapping parts in order to Join them together A partial solution to the problem was provided by the computer. In the last quarter of the 20th Centum computer aided design was used successfully in car manufacture, building construction, machine production and several other industries; its application to commercial aircraft manufactured came later both in the United States and in Europe. Speaking of the 777, deck Johnson, Boeing chief engineer for digital design, noted the “tremendous advantage” of computer application:

With mock‐ups, the . . . engineer had three opportunities at three levels of detail to check his parts and nothing in between. With Catia (Computer aided three dimensional, interactive application) he can do it day in and day out over the whole development of the airplane.

Catia was a sophisticated computer program that Boeing bought from Dassault Aviation, a French fighter planes builder. IBM enhanced the program to improve image manipulation, supplied Boeing within eight of its largest mainframe computers, and connected the mainframes to 2,200 computer terminals that Boeing distributed among its 777 deign teams The software program showed on a screen exactly how parts and components fit together before the actual manufacturing process took place.

A digital design system, Catia had five distinctive advantages. First, it provided the engineers with 100 percent visualization, allowing them to rotated zoom, and “interrogate” parts geometrically in order to spotlight interferences. Second, Catia assigned a numerical value to each drawing on the screen and thereby helped engineers locate related drawings of parts and components, merge them together, and check for incompatibilities. Third, to help Boeing’s customers service the 777, the digital design system created a computer simulated human – a Catia figure playing the role of the service mechanic – who climbed into the three dimensional images and showed the engineers whether parts were serviceable and entry accessible. Fourth, the use of Catia by all 777 design teams in the US,Japan, Europe, and elsewhere facilitated instantaneous communication between Boeing and its subcontractors and ensured the frequent updating of the design. And fifth, Catia provided the 777 assembly line workers with graphics that enhanced the narrative work Instructions they received showing explicitly on a screen how a given task should be performed.

Design‐Build Teams (DBT)

Teaming was another feature of the 777 program. About 30 integratedlevel teams at the top and more than 230 designbuild teams at the bottom worked together on the 777. All team members were connected by Catia. The integratedlevel teams were organized around large sections of the aircrafts; the DBTs around small parts and components. In both cases, teams were crossfunctional, as Philip Condit observed:

If you go back to earlier planes that Boeing build, the factory was on the bottom floor; and Engineering was on the upper floor. Both Manufacturing and Engineering went back and forth. When there was a problem in the factory, the engineer went down and looked at it . . .

With ten thousand people (working on the 777), that turn out to be really hard. So you start devising other tools to allow you to achieve that – the design‐build tam. You break the airplane down and bring manufacturing, tooling, planning, Engineering, finance, and materials all together [in small teams].

Under the designbuild approach, many of the design decisions were driven by manufactured concerns. As manufacturing specialists worked alongside engineers, engineers were less likely to design parts that were difficult to produce and needed to be redesigned. Similarly, under the designbuild approach, customers’ expectations as well as safety and weight considerations were all incorporated into the design of the aircraft; engineers no longer needed to “chain saw” structural components and systems in order to replace parts that did not meet customers expectations, were unsafe, or were too heavy.

The design of the 777’s wing provides an example. The wing was divided into two integrationlevel teams, the “leading edge” (the foreword part of the wing) and the “trailing edge” (the back of the wing) team. Next, the trailing edge team was further divided into ten designbuild teams, each named after a piece of the wing’s trailing edge (Exhibit 6).

Exhibit 6 The Ten DBTs (“little companies”) Responsible for the Wing’s Trailing Edge Membership in these DBTS extended to two groups of outsiders representatives of the customer airlines and engineers employed by the foreign subcontractors. Made up of up to 20 members, eachDBT decided its own mix of insiders and outsiders and each was led by a team leader. Each DBTIncluded representatives from six functional disciplines: engineering, manufacturing, materiel,customer support, finance, and quality assurance. The DBTs met twice a week for two hours to hear reports from team members, discuss immediate goals and plans, divide responsibilities, set time lines, and take specific notes of all decisions taken. Described by a Boeing official as “little companies,” the DBTS enjoyed a high degree of autonomy from management supervision; team members designed their own tools, developed their own manufacturing plans, and wrote their own contracts with the program management, spending deliverables, resources, and schedules. John Monroe, a Boeing 777 senior project manager remarked:

The team is totally responsible. We give them a lump of money to go and do their job. They decided whether to hire a lot of inexpensive people or to trade numbers for resources. It’s unprecedented. We have some $100 million plus capsules led my non‐managers.

Employees Empowerment and culture

An additional aspect of the 777 program was the empowering of assembly line workers. Boeing managers encouraged factory workers at all levels to speak up, offer suggestions, and participate in decision making. Boeing managers also paid attention to a variety of “human relations” problems faced by workers, problems ranging from child care and parking to occupational hazards and safety concerns.

All employees entering the 777 program managers, engineers, assembly line workers and others ‐ were expected to attend a special orientation session devoted to the themes of team work and quality control. Once a quarter, the entire “777 team” of up to 10,000 employees met off site to hear briefings in the aircraft status. Dressed casually the employees were urged to raise questions, voice complaints, and propose improvements. Under the 777 program, managers met frequently to discuss ways to promote communication with workers Managers, for example, “fire fought” problems by bringing workers together and empowering them to offer solutions. In a typical “firefight” session, Boeing 777 project managers learned from assembly line workers how to improve the process of wiring and tubing the airframe’s Interior: “staffing” fuselage sections with wires, ducts, tubs, and Insulation materials before joining the sections together was easier than Installing the Interior parts all at once In a preassembled fuselage.

Under the 777 program, in addition, Boeing assembly line workers also were empowered to appeal management decisions. In a case involving middle managers, a group of Boeing machinists sought to replace a non retractable Jig (a large device used to hold parts) with a retractable one in order to ease and simplifies their goes. Otherwise they had to carry heavy equipment loads up and down stairs. Again and again, their supervisors refused to implement the change. When the machinists eventually approached a factory manager, he inspected the Jig personally, and immediately ordered the change.

Under the 777 program, work on the shop floor was ruled by the “Bar Chart.” A large display panel placed at different work areas, the Bar Chart listed the name of each worker, his or her daily Job description, and the time available to complete specific tasks. Boeing had utilized the Bar Chart system as a “management visibility system”. In the past, but only under the 777 program was the system fully computerized. The chart showed whether assembly line workers were meeting or missing their production goals. Boeing Industrial engineers estimated the time it took to complete a given task and fed the Information back to the system’s computer. Workers ran a scanner across their ID badges and supplied the computer with the data necessary to log their Job progress. Each employee “sold” his/her completed Job to an inspector, and no job was declared acceptable unless “bought” by an Inspector.

Leadership and Management Style

The team in charge of the 777 program was led by a group of five vice presidents, headed by Philip Condit, a gifted engineer who was described by one Wall Street analyst as “a cross between a grizzly bear and a teddy bear. Good people skills, but furious, in the market place.” Each of the five vice presidents rose through the ranks, and each had a 2530 years experience with Boeing. All were men During the 777 design phase, the five VPs met regularly every Tuesday morning in a small conference room at Boeing’s headquarters in Seattle in what was called the “muffin Meeting.” There were no agendas drafted, no minutes drawn, no overhead protectors used, and no votes taken. The homemade muffins, served during the meetings symbolized the informal tone of the forum. Few people outside the circle of five had ever attended these weekly sessions. Acting as an informal chair Condit led a free wheeling discussion of the 777 project, asking each VP to say anything he had on his mind. The weekly session reflected Boeing’s sweeping new approach to management. Traditionally Boeing had been a highly structured company governed by engineers. Its culture was secretive, formal, and stiff. Managers seldom interacted, sharing was rare, divisions kept to themselves, and engineers competed with each other. Under the 777 program, Boeing made serious efforts to abandon its secretive management style. Condit firmly believed that open communication among top executives, middle managers, and assembly line workers was indispensable for improving morale and raising productivity. He urged employees to talk to each other and share information and he used a variety of management tools to do so: Information sheets, orientation sessions, question and answer sessions, leadership meetings, regular managers’ meetings, and “all team” meetings. To empower shop floor workers as well as middle managers, Condit introduced a threeway performance review procedure whereby managers were evaluated by their supervisors, their peers, and their subordinates. Most important, Condit made team work the hallmark of the 777 project. In an address entitled “Working Together: The 777 Story” and delivered in December 1992 to members of the Royal Aeronautics Society in London, Condit summed up his team approach:

[T]eam building is . . . very difficult to do well but when it works the results are dramatic. Teaming fosters the excitement of a shard endeavor and creates an atmosphere that stimulates creativity and problems solving.

But building team[s] . . . is hard work. It doesn’t come naturally. Most of us are taught from an early age to compete and excel as individuals. Performance in school and performance on the job are usually measured by individual achievement. Sharing your ideas with others, or helping others to enhance their performance, is often viewed as contrary to one’s self interest.

This individualistic mentality has its place, but . . . it is up longer the most useful attitude for a workplace to possess in today’s world. To create a high performance organization, you need employees who can work together in a way that promotes continual learning and the free flow of ideas and information.

The Results if the 777 Project

The 777 entered revenue service in June 1995. Since many of the features incorporated into the 777’s design reflected suggestions made by the airline carriers, pilots mechanic and flight attendants were quite enthusiastic about the new jet. Three achievements of the program, in airplane interior, aircraft design, and aircraft manufacturing, stood out.

Configuration Flexibility

The 777 offered carriers enhanced configuration flexibility. A typical configuration change took only 72 hours on the 777 compared to three weeks in competing aircraft. In 1992, the Industrial Design Society of America granted Boeing its Excellence Award for building the 777 passenger cabin, honoring an airplane interior for the first times

Digital Design

The original goal of the program was to reduce “change, errors and rework” by 50 percent, but engineers building the first three 777’s managed to reduce such modification by 60 percent to 90 percent. Catia helped engineers identify more than 10,000 interferences that would have otherwise remained undetected until assembly, or until after delivery. The first 777 was only 0.023 inch short of perfect alignment, compared to as much as 0.5 and on previous programs. Assembly line workers confirmed the beneficial effects of the digital design system. “The parts snap together like Lego blocks,” said one mechanic. Reducing the need for reengineering, replanning, retooling and retrofitting, Boeing’s innovative efforts were recognized yet again. In 1993, the Smithsonian Institution honored the Boeing 777 division with its Annual Computerworld Award for the manufacturing category.


Boeing 777 assembly line workers expressed a high level of job satisfaction under the new program. “It’s a whole new world,” a 14 year Boeing veteran mechanic said, “I even like going to work. It’s bubbly. It’s clean. Everyone has confidence.” “we never used to speak up,” said another employee, “didn’t dare. Now factory workers are treated better and are encouraged to offer ideas.” Although the Bar Chart system required Boeing 777 mechanics to work harder and faster as they moved down the learning curve, their principal union organization, the International Association of Machinists, was pleased with Boeing’s new approach to labormanagement relations. A union spokesman reported that under the 777 program, managers were more likely to treat problems as opportunities from which to learn rather than mistakes for which to blame. Under the 777 program, the union representative added, managers were more respectful of workers’ rights under the collective bargaining agreement.

Unresolved Problems and Lessons Learned

Notwithstanding Boeing’s success with the 777 project, the cost of the program was very high. Boeing did not publish figures pertaining to the total cost of Catia. But a company official reported that under the 777 program, the 3D digital design process required 60 percent more engineers resources than the older, 2D drawingbased design process. One reasons for the high cost of using digital design was slow computing tools: Catia’s response time often lasted minutes. Another was the need to update the design software repeatedly. Boeing revised cat’s design software four times between 1990 and 1996, making the system easier to learn and use. Still, Catia continued to experience frequent software problems. Moreover, several of Boeing’s outside suppliers were unable to utilize Catia’s digital data in their manufacturing process Boeing faced training problems as well. One challenging problem, according to Ron Ostrowski, Director of 777 engineering was “to convert people’s thinking from 2D to 3D. It took more time than we thought it would. I came from a paper world and now I am managing a digital program”.

Converting people’s thinking required what another manager called an “unending communication” coupled with training and retraining. Under the 777 program, Ostrowski recalled, “engineers had lo learn to Interact. Some couldn’t, and they left. The young ones caught on” and stayed. Learning to work together was a challenge to managers too. Some managers were reluctant to embrace Condit’s open management style, fearing a decline in their authority. Others were reluctant to share their mistakes with their superiors, fearing reprisals. Some other managers, realizing that the new approach would end many managerial Jobs, resisted change when they could, and did not pursue It whole heartedly when they could not. Even top executives were sometimes uncomfortable within Boeing’s open management style, believing that sharing Information with employees was likely to help Boeing’s competitors obtain confidential 777 data.

Team work was another problem area. Working under pressure, some team members did not function well within teams and had to be moved. Others took advantage of their newborn freedom to offer suggestions, but were disillusioned and frustrated when management either ignored these suggestions, or did not act upon them. Mangers experienced different teamrelated problems. In several cases managers kept on meeting with their team members repeatedly until they arrived at a solution desired by their bosses. They were unwilling to challenge senior executives, nor did they trust

Boeing’s new approach to teaming. In other cases, managers distrusted the new digital technology. One engineering manager instructed his team members to draft paper drawings alongside Catia’s digital designs. When Catia experienced a problem, he followed the drawing, ignoring the computerized design, and causing unnecessary and costly delays in his team’s part of the project.

Extending the 777 revolution

Boeing’s learning pain played a key role in the company’s decision not to Implement the 777 program companywide. Boeing officials recognized the Importance of team work and Catia In reducing change, error, and rework, but they also realized that teaming required frequent training, continuous reinforcement and ongoing monitoring, and that the use of Catia was still too expensive, though its cost was going down (in 1997, Catia’s “penalty” was down to 10 percent). Three of Boeing’s derivative programs, the 737 Next Generation, the 757 300, and the 767400, had the option of Implementing the 777’s program Innovations, and only one, the 737, did so, adopting a modified version of the 777’s cross emotional teams.

Yet the 777 s culture was spreading In other ways. Senior executives took broader roles as the 777 entered service, and their impact was felt through the company Larry Olson, director of Information systems for the 747/767/777 division, was a former 777 manager who believed that Boeing 777 employees “won’t tolerate going back to the old ways.” He expected to fill new positions on Boeing’s next programthe 747X – with former 777 employees in their 40s. Philip Condit, Boeing CEO, implemented several of his own 777’s Innovations; intensifying the use of meeting among Boeing’s managers and promoting the free flow of Ideas throughout the company. Under Condit’s leadership, all mid level managers assigned to Boeing Commercial Airplane Group, about sixty people, met once a week in to discuss costs, revenues, and production schedules, product by product. By the end of the meeting which sometimes ran into the evening each manager had to draft a detailed plan of action dealing with problems in his/her department. Under Condit’s leaderships more importantly Boeing developed a new “vision” that grew out of the 777 project. Articulating the company’s vision for the next two decades (19962016), Condit singled out “Customer satisfaction,” “Team leadership,” and “A participatory workplace,” as Boeing’s core corporate values.

Conclusion: Boeing, Airbus and the 777

Looking back at the 777 program 11 years after the launch and six years after first delivers as it is now (2001) clear that Boeing produced the most successful commercial Jetliner of its land. Airbus launched the A330 and A340 in 1987, and McDonnell Douglas launched a new ironseat wide body Jet in the mid 1980s, the threeengine MD11s. Coming late to market, the Boeing 777 soon outsold both models. The 777 had entered service in 1995, and within a year Boeing delivered more than twice as many 777s as the number of MD11s delivered by McDonnell Douglas. In 1997, 1998, and 1999 Boeing delivered a larger number of 777s than the combined number of A330s and A340s delivered by Airbus, and in 2000 the 777 outsold each of its two Airbus competitors (Exhibit 7). A survey of nearly 6,000 European airline passengers who had flown both the 777 and the A330/A340 found that the 777 was preferred by more than three out of four passengers. In the end, a key element In the 777’s triumph was its popularity with the traveling public.

Exhibit 7 Total Number of MD11, A330, A340, and 777 Airplanes Delivered During 1996 – 2000

Appendix A

Selected Features of the 777 Aerodynamic efficiency

Aircraft operating efficiency depended, in part, on aerodynamics: the smoother the surface of the plane and the more aerodynamic the shape of the plane, the less power was needed to overcome drag during flight. To reduce aerodynamic drag, Boeing engineers sought to discover the optimalshape of the plane’s major components, namely, the wings, fuselage, nose, tails, and nacelles (engine protective containers). Speaking of the 777’s “airfoil,” the shape of the wing, Alan Mulally, the 777’s director of engineering (he later succeeded Condit as the project manager), explained:

The 777 airfoil is a significant advance in airfoil design over . . . past airplanes . . . We arrived at this shape by extensive analysis in wind tunnel . . . [W]e learned new things by testing the airfoil at . . . near flight conditions as jar as temperature . . . pressures, and air distribution are concerned. And . . . we’ve ended up with an airfoil that is a new standard at maximizing lift versus drag.

The 777’s advanced wing enhanced its ability to climb quickly and cruise at high altitudes. It also enabled the airplane to carry full passenger payloads out of many high elevation airfields served by Boeing customers. Boeing engineers estimated that the design of the 777 lowered its aerodynamic drag by 510 percent compared to other advanced Jetliners.

A Service Ready Aircraft

A twoengine plane needed special permission from the Federal Aviation Administration (FAA) to fly long over water routes. Ordinarily the FAA first certified a twinjet for one hour of flight away from an airport, then two hours and only after two years in service, three hours across water anywhere in the world. For the 767, Boeing attained the three hours certification, known as ETOPS (extended range twinengine operations) approval, after two years in service. For the 777 Boeing customers sought to obtain an ETOPS approval right away, from day one of revenue operations. Boeing 777 costumers also expected the new Jet to deliver a high level of schedule reliability from the start (Boeing 767 customers experienced frequent mechanical and computer problems as the 767 entered service in 1982).

To receive an early ETOPS approval, as well as minimize service disruptions, Boeing engineers made special efforts to produce a “service ready” plane Using advanced computer technology. Boeing tested the 777 twice as much as the 767, Improved and streamlined the testing procedure, and checked all systems under simulated flight conditions in a new $370 million hightech lab called Integrated Aircraft System Laboratory. The Boeing Company, in addition, conducted flight tests for an extended period of time, using United pilots as test pilots. Following a long validation process that Included taking off; flying and landing on one engine, the FAA certified the 777 ln May 1995. The 777 proved highly reliable. During the first three months of its revenue service, United Airlines experienced a schedule reliability of 98 percent, a level the 767 took 18 months to reach. British Airways’ first 777 was in service five days after delivery, a company record for a new aircraft. The next three 777s to join British Airways fleet went into service a day after they arrived at Heathrow

The Use of Composite Materials
Advanced composite materials accounted for 9 percent of the 777’s total weight, the comparable figure for Boeing’s other jetliners was 3 percent. Improved Alcoa aluminum alloys that saved weight and reduced corrosion and fatigue were used for the construction of the 777’s upper wing skin; other nonmetallic composites were used for the 777s rudder, fines and the tails. To help reduce corrosion around the lavatories and galleys, Boeing pioneered the use of composite materials for the construction of the floor beam structure. Boeing made a larger use of titanium alloys on the 777 than on any previous aircraft. Substituting steel with titanium cut weight by half, and space by one quarter; titanium was also 40 percent less dense the steel, yet of equal strength. The use of heat resisting titanium in the 777’s engine nacelle saved Boeing 180 pounds per engine, or 360 pounds per plane; the use of titanium rather then steel for building the 777’s landing gear saved Boeing 600 pounds per plane. Although titanium was more expensive than steel or aluminum, the choice of its application was driven by economic: for each pound of empty weight Boeing engineers squeezed put of the 777, Boeing airline customers saved hundreds of dollars worth of fuel during the life time of the plane.

Appendix B

The 777’s Choice of Engines

Pratt and Whitney (P&W), General Electric (GE), and Rolls Royce (RR) had all developed the 777 jet engine, each offering its own make. Boeing required an engine that was more powerful, more efficient, and quieter than any jet engine in existence; the 777 engine was designed to generate close to 80,000 pounds of thrust (the forward force produced by the gases escaping backward from the engine) or 40 percent more power than the 767’s All three engine makers had been selected by Boeing airline customers (Exhibit 8). United Airlines chose the Pratt & Whitney engine. Partly because P&W supplied engines to United 747 and 767 fleets, and also because the design of the 777 engine was an extension of the 747’s and 767’s design, United management sought to resin P&W as its primary engine supplier. British Airways, on the other hand, selected the GE engine. A major consideration in British Airways’ choice was aircraft efficiency: fuel consumption of the GE engine was 5 percent lower than that of the two competing engines.

Other carriers selected the RR engine for their reasons pertaining to their own needs and interests. Exhibit 8 The Choice of Engines: Boeing 777’s Largest Customers Exhibit 9 Selected Financial Data (Dollars in Millions Except per Share Data)


1. Latar Belakang Perusahaan Pesawat Terbang Boeing.

Pembuatan pesawat komersial merupakan industri beresiko yang sangat besar dimana kegagalan tidak termasuk dalam pengecualian. Jumlah pembuat pesawat jet komersial yang semula ada 4 pada awal tahun 1980 (Boeing, McDonnell Douglass, Airbus dan Lockheed) berkurang menjadi 2 yaitu Boeing dan Airbus yang memainkan duopoli dalam pembuat pesawat jet komersial.

Sejarah perusahaan Boeing dapat dibagi menjadi dua periode berbeda yaitu era piston dan the let age. Pada era piston, Boeing memproduksi pesawat-pesawat militer/tempur yang digunakan pada tahun 1920-an dan 1930-an dan pesawat pembom selama perang dunia II. Selama jet age yang dimulai sejak tahun 1950-an Boeing telah menjelma menjadi produsen pesawat komersial terbesar di dunia.

Visi Boeing untuk tahun 2016 adalah “People working together as one global company for Aerospace leadership” yang dapat diartikan sebagai tempat orang-orang untuk bekerja sama dalam sebuah perusahaan global untuk memimpin dunia penerbangan. Untuk mencapai visi tersebut, Boeing memiliki strategi-strategi yaitu menjalankan bisnis inti yang sehat, kekuatan leverage (kemampuan melakukan lebih banyak hal dengan sumber daya yang lebih sedikit) terhadap produk dan jasa baru serta membuka wilayah/pasar yang baru serta potensial.

Jet pertama yang diproduksi Boeing adalah 707 dibuat pada tahun 1958 yang merupakan terobosan besar dalam sejarah penerbangan komersial. Dengan bantuan dari pemerintah dalam pengembangan Boeing 707 diproduksi menjadi 2 jenis pesawat jet yaitu untuk kepentingan militer dan penerbangan komersial. Produksi 707 menguntungkan bagi Boeing dan hal tersebut dijadikan landasan dalam memeprtahankan model jet berlorong tunggal sempit berikutnya yaitu 727 dan 757.

Boeing 747 diperkenalkan pada tahun 1970. Perkembangan 747 dipertaruhkan oleh Boeing dengan menginvestasikan hampir seluruh total kekayaan Boeing dalam proyek 747 tersebut. Hal ini menjadikan Boeing berada di ambang kebangkrutan. Boeing melakukan penghematan dalam rangka menanggulangi resesi yang dibarengi dengan inefisiensi produk dan meningkatnya jumlah biaya.

Dalam jangka panjang, investasi besar-besaran Boeing terhadap 747-nya ternyata menuai keuntungan yang luar biasa dan memaksa pesaingnya yaitu Lockheed dan McDonnel Douglass tertinggal jauh dibelakang dan mulai keluar dari pasar.

Boeing mengembangkan model-model yang sukses di pasar kembali yaitu Boeing 737 pada tahun 1969, Boeing 757 pada tahun 1982, dan Boeing 767 pada tahun 1990-an. Kesemuanya itu menghasilkan keuntungan yang luar biasa bagi Boeing. Dan pada tahun 1995 Boeing mulai mengenalkan Boeing 777.

Pada tahun 1997, Boeing membeli McDonnell Douglas seharga USD 14 milyar sehingga menjadikan Boeing sebagai produsen pesawat terbang terbesar di dunia. Menyusul mergernya dengan McDonnell Douglass, Boeing masih memiliki saingan yang tersisa yaitu Airbus yang menguasai 45% pasar penjualan pesawat terbang komersial.

Kasus dimulai ketika Boeing mengerjakan proyek 777 yang merupakan proyek terbesar setelah proyek 747 dengan biaya pengembangan USD 6,3 milyar serta jumlah karyawan yang ditugaskan hampir 10.000 orang yang bekerja di pabrik Boeing di Everett dekat Seattle, Washington.

Posisi keuangan Boeing pada tahun 1990 sangatlah kuat, tetapi dalam pengembangan proyek 777 sangat beresiko. Resiko kegagalan dapat memicu irreversible define dan mengancam perusahaan Boeing dimasa depan.

Untuk mengelola resiko pabrik dalam mengembangkan pesawat baru yang baru pertama kali mendapat jumlah pesanan yang paling minimum dari operator penerbangan komersial di seluruh dunia, CEO Boeing Frank Schrontz diharapkan telah memperoleh setidaknya 100 insial order pemesanan Boeing 777 sebelum proyek pengembangan Boeing 777 dimulai sebagai akibat dari lemahnya kondisi keuangan Boeing dan semakin meningkatnya daya saing Airbus di pasaran pesawat jet komersial. Kasus ini berfokus pada upaya Condit (CEO Boeing setelah Schrontz) dalam keberhasilan pengembangan proyek Boeing 777, dampak pembuatannya serta terhadap peningkatan posisi kompetetif relatif terhadap saingan tunggalnya yaitu Airbus.

Dari awal, desain Boeing 777 cukup fleksibel untuk mengakomodasi turunan jetliners. Karena semua turunan dari model tertentu bersama pemeliharaan, framing, serta prosedur operasi, suku cadang dan komponen dikarenakan derivatif semacam itu memungkinkan operator jasa penerbangan melayani pelanggan dengan pasar yang berbeda dengan biaya yang lebih rendah.

Kunci efisiensi dari model 777 adalah sayapnya. Sayap 777 sangat panjang dan kurus sehingga cukup kuat untuk mendukung model pesawat yang jauh diperbesar. Boeing 777 adalah pesawat pertama yang dirancang sepenuhnya oleh komputer.

Catia adalah program komputer canggih Boeing yang dibeli dari Dasault Aviation Perancis yang merupakan produsen pesawat tempur. Sistem desain digal Catia memiliki 5 buah keuntungan yaitu menyediakan kepada para insinyur 100% visualisasi yang memungkinkan untuk diputar zoom dan untuk mengenali bagian geometris dalam rangka untuk menyoroti interferensi. Kedua, Catia diberi nilai numerik untuk setiap gambar pada layar, dengan demikian membantu insinyur dalam menemukan gambar-gambar yang berhubungan bagian-bagian dan komponen, menggabungkan mereka bersama-sama, dan memeriksa yang tidak kompatibel. Ketiga, untuk membantu pelanggan Boeing melayani 777, sistem desain simulasi komputer menciptakan sebuah figur manusia, Catia memainkan peran layanan yang masuk ke dalam gambar tiga dimensi dan menunjukkan para insinyur apakah bagian yang berguna dapat masuk dan diakses. Keempat, penggunaan 777 Catia oleh semua tim desain di AS, Jepang, Eropa, dan tempat lainnya sesaat memfasilitasi komunikasi antara Boeing dan subkontraktor dan memastikan sering pembaruan desain. Dan kelima, Catia menyediakan 777 perakitan pekerja dengan grafis yang ditingkatkan lewat narasi kerja yang mana instruksi mereka terima menunjukkan secara eksplisit di layar tentang apa yang harus mereka kerjakan.

Aspek tambahan dari program 777 ini adalah pemberdayaan pekerja di jalur perakitan. Manager pabrik mendorong para pekerja untuk bicara, memberikan saran dan berpartisipasi dalam pengambilan keputusan. Selain itu pekerja juga diberdayakan untuk membanding putusan yang dikeluarkan oleh manajemen.

Tim yang bertanggung jawab atas proyek 777 oleh sekelompok 5 wakil presiden yang dipimpin oleh Condit. Selama fase desain 777, lima orang wakil presiden bertemu secara teratur setiap selasa pagi dalam sebuah rapat kecil di markas perusahaan di Seattle, WA. Dari hasil itulah banyak pendapatan yang masuk dari layanan Boeing 777 karena banyaknya fitur yang dimasukkan dalam desain 777 sehingga memperoleh 3 pencapaian program yaitu interior pesawat, desain pesawat dan manufaktur pesawat.

Melihat kebelakang pada proyek 777 menjadikan Boeing sebagai produsen pesawat jet komersial yang paling berhasil. Ketika pertama kali diluncurkan pada 1995, penjualan Boeing 777 lebih banyak 2 kali lipat daripada penjulana MD11s yang disampaikan oleh McDonnell Douglas serta lebih besar dibandingkan penjualan gabungan antara Airbus A330s dan A340s. Sebuah survei pada maskapai penerbangan di Eropa terhadap 6000 penumpang menunjukkan bahwa 3 dari 4 penumpang menyukai bepergian dengan menggunakan Boeing 777 daripada menggunakan Airbus A330s atau A340s.

2. Keadaan dan Peran Perusahaan Di Ekonomi Global.

Perusahaan Boeing memegang peranan yang sangat penting bagi industri pesawat terbang di ekonomi global. Bersama perusahaan pesaingnya, Airbus, Boeing memainkan duopoli dalam industri pembuatan pesawat jet komersial.

Peran besar boeing dalam pengembangan industri persawat komersial di dunia dapat dilihat dengan diciptakannya produk yang bersifat global dan digunakan hampir di seluruh dunia. Dalam memproduksi 777, Boeing bekerja sama dengan 12 perusahaan internasional yang berlokasi di 12 negara, dan 18 perusahaan AS yang berada di 12 negara bagian. Di antara perusahaan pemasok asing ada yang berada di Jepang, Britania, Australia, Italia, Korea, Brasil, Singapura, dan Irlandia; di antaranya subkontraktor utama dari AS yaitu perusahaan Grumman Rockwell (kemudian bergabung dengan Boeing), Honeywell, United Technologies, Bendix dan korporasi Sunstrand. Dari semua yang berpartisipasi, Jepang memegang peranan terbesar. Boeing menggunakan subkontraktor global sebagai salah satu alat pemasaran juga.

Program 777 dari Boeing merupakan sebuah proyek besar setelah selesainya proyek 747. Total biaya pengembangan 777 diperkirakan sekitar $ 6,3 miliar dan jumlah karyawan yang ditugaskan untuk proyek ini mencapai hampir 10.000 orang. Keputusan untuk mengembangkan proyek 777 didasarkan pada perkiraan kebutuhan pasar akan penerbangan di masa depan. 777 merupakan pesawat jet Boeing pertama yang sepenuhnya diciptakan dengan komputer. Secara historis, Boeing sebagai sebuah pesawat baru dirancang dengan dua cara: gambaran di kertas dan pemodelan dengan ukuran sebenarnya yang disebut mock-up. Penggambaran di kertas bersifat dua dimensi dan karena itu tidak cukup untuk menjelaskan pembangunan kompleks tiga dimensi pesawat.
Boeing 777 dibangun dengan Catia (Computer aided three dimensional, interactive application), sebuah program komputer canggih yang dibeli dari Dassault Aviation, perusahaan perancang pesawat tempur asal Perancis. IBM meningkatkan program untuk dapat memanipulasi gambar dengan baik, menyediakan Boeing delapan komputer mainframe terbesar, dan menghubungkan komputer mainframe ke 2.200 terminal yang mendistribusikan bagian dari Boeing 777 di antara tim. Program menunjukkan layar bagaimana bagian dan komponen bekerja bersama sebelum proses manufaktur sebenarnya ditempatkan pada posisinya.

Beberapa hal terbaik dari Boeing 777 yang menginspirasi akan rancangan pesawat komersial yang ada di pasaran adalah :

a. Konfigurasi yang fleksibel

Boeing 777 menawarkan fleksibilitas konfigurasi yang telah disempurnakan. Pada tahun 1992, Pada tahun 1992, the Industrial Design Society of America memberikan Boeing sebuah penghargaan untuk pembangunan kabin penumpangg 777, menghargai interior pesawat untuk pertama kalinya.

b. Design Digital

Catia membantu insinyur mengidentifikasi lebih dari 10.000 gangguan yang tidak terdeteksi hingga perakitan, atau sampai sesudah dikirimkan. Mengurangi kebutuhan untuk merekayasa ulang, merencanakan ulang, memperbaruhi dan mempermudah proses penyesuaian, upaya inovatif Boeing diakui lagi. Pada tahun 1993, Lembaga Smithsonian menganugerahkan Boeing 777 dengan penghargaan tahunan Computerworld untuk kategori manufaktur.

c. Pemberdayaan

Para pekerja perakitan Boeing 777 mengungkapkan tingkat tinggi kepuasan kerja di bawah program baru. Sekarang pekerja pabrik diperlakukan lebih baik dan dimotivasi untuk mengungkapkan gagasan. Seorang juru bicara serikat pekerja melaporkan bahwa di bawah program 777, manajer cenderung untuk menanggapi masalah sebagai kesempatan untuk belajar dari kesalahan daripada harus saling menyalahkan. Perwakilan serikat pekerja menambahkan, di bawah program 777, manajer lebih menghargai hak-hak pekerja melalui kesepakatan tawar-menawar.

3. Fitur Yang Digunakan Dalam Hal Dukungan Teknologi dan Implementasi Knowledge Management.

Boeing menerapkan teknologi dan manajerial yang mana desain, manufaktur, perakitan, perevitalisasian sistem produksi rekayasa peawat terbang sudah ketinggalan zaman, dan memperbarui manufaktur Boeing sehingga tahan panas dan bisa mentolerir suhu hingga 3,000 derajat yang digunakan oleh para pembuat mesin dalam rangka revolusi pembuatan mesin avionik. Meningkatkan penggunaan semikonduktor oleh produsen pesawat, memfasilitasi miniaturisasi dari kokpit, instrumen, dan lebih penting, meningkatkan penggunaan komputer untuk komunikasi pesawat.

Penggunaan komputer berkontribusi sebagai tambahan untuk desain, pembuatan dan perakitan pesawat model baru. Dengan sayap yang cukup besar untuk mendukung pesawat membentang dengan lebih besar, design mesin menawarkan berbagai modifikasi lain dalam desain dasar 747. Sistem manajemen dek penerbangan yang disesuaikan suhu kabin, menguasai sistem alamat publik, dan dipantau dalam hal persediaan makanan dan minuman, konfigurasi interior (rencana tata letak) dari pesawat. Untuk dapat mengkonfigurasi ulang pesawat dengan cepat untuk pasar yang berbeda dari berbagai rentang perjalanan dan penumpang.

Pada pesawat jet komersial yang standar, toilet dan bar semua dilepas di masa lalu, tetapi terbatas pada posisi tetap dimana struktur lantai utama diperkuat untuk mengakomodasi beban yang berat. Sebaliknya perbaharuan desain pada komponen seperti kapal dan toilet dapat diposisikan di mana saja dalam beberapa rancangan ke dalam kabin oleh upaya bersama Boeing dan insinyur. Demikian pula, rancangan fleksibel 777 memungkinkan operator untuk meningkatkan jumlah kursi kombinasi serta mengkonfigurasi ulang pengaturan tempat duduk dengan cepat. Menghasilkan konfigurasi yang fleksibel, pada gilirannya penghematan yang cukup besar; maskapai tidak lagi diperlukan untuk mengambil interior pesawat dari layanan untuk jangka waktu tertentu dalam rangka untuk melakukan konfigurasi ulang interior Boeing memperkenalkan bersama desain kokpit pesawat 747/777 yang memungkinkan para pelanggan untuk menggunakan satu pilot untuk kedua jenis pesawat sebagai penghematan biaya yang signifikan. Selain mendesak maskapai penerbangan Boeing untuk meningkatkan penggunaan avionik untuk hiburan dalam penerbangan sebagai akibatnya kabin dilengkapi fasilitas hiburan yang terkomputerisasi keseluruhannya. Penggunaan gabungan komputer dan monitor video yang fitur film, program video, dan permainan komputer interaktif. Penumpang juga disediakan sistem suara digital sebanding dengan home stereo paling maju yang tersedia, Dan Sekitar 40 persen dari total 777 kapasitas komputer dicadangkan untuk penumpang di cabin.

Boeing 777 adalah yang pertama terbang dengan kabel pesawat FBW. Pesawat dikendalikan oleh perintah pilot pemancar ke permukaan dan dapat dipindah-pindahkan (kemudi, flaps, dll) secara elektrik, bukan secara mekanis. Artistik dalam Boeing 777 sebagian untuk memuaskan para pelanggan maskapai penerbangan, dan sebagian dalam menunjukkan kepemimpinan dalam teknologi penerbangan.

Kunci efisiensi 777 desain adalah sayap. Yang pertama 777 adalah pesawat jet Boeing yang dirancang sepenuhnya oleh komputer, pesawat baru yang dirancang dalam dua cara: kertas gambar dan ukuran penuh model yang disebut mock-up. Kertas gambar dua dimensi dan karena itu tidak cukup untuk menjelaskan pembangunan kompleks. Tiga dimensi pesawat penuh mock-up menjadi solusi sebagai cadangan untuk gambar. Desain. Komputer digunakan dengan sukses dalam pembuatan mobil, konstruksi bangunan, mesin produksi dan beberapa industri lain. Penerapannya pada pembuatan pesawat komersial di Amerika Serikat dan di Eropa, insinyur desain digital mencatat “keuntungan besar” dari aplikasi komputer tersebut.

Dengan mock-up, memiliki tiga keunggulan pada tiga tingkat detail untuk memeriksa bagian dan tidak ada di antara keduanya. Dengan Catia (Computer aided tiga dimensi, interaktif ) berguna dalam pengembangan pesawat.

French Catia adalah sebuah program komputer yang canggih Boeing dibeli dari Dassault Aviation, Perancis meningkatkan program untuk meningkatkan manipulasi gambar, disediakan Boeing yaitu computer dalam delapan dari komputer mainframe terbesar, dan menghubungkan komputer mainframe ke 2.200 terminal yang didistribusikan.program perangkat lunak pada layar persis bagaimana dan komponen bagian cocok bersama sebelum proses manufaktur sebenarnya mengambil tempat Catia diberi nilai numerik untuk setiap gambar pada layar dengan demikian membantu insinyur menemukan gambar-gambar yang berhubungan bagian-bagian dan komponen, menggabungkan mereka bersama-sama, dan memeriksa yang tidak kompatibel.

Dari kesimpulan dalam penggunaan fitur yang digunakan oleh boeing yaitu tidak hanya tertuju pada perbaikan desain pesawat tetapi juga pada perbaikan dan pengembangan teknologi pada pesawat yang dirancang dan menunjukkan perkembangan teknologi yang signifikan pada perusahaan Boeing.

Fitur yang digunakan dalam hal dukungan teknologi dan implementasi Knowledge Management antara lain sebagai berikut:

a. Tim Perancangan Desain atau Design-Build Team (DBT) melalui Catia.

Dalam project Boeing Program 777, sekitar 30 tim tingkatan atas dan lebih dari 230 tim perancangan desain dari level di bawahnya bekerja secara bersama-sama. Semua anggota tim saling terhubung melalui Catia (Computer Aided Three dimensional Interactive Application).

b. Budaya dan Pemberdayaan Karyawaan.

Salah satu aspek implementasi dalam hal Knowledge Management pada Boeing adalah Pemberdayaan Karyawan dengan budaya kerja Open Management atau Manajemen Terbuka. Para manajer Boeing selalu memotivasi para pekerjanya dari semua tingkatan agar berani berbicara, menyampaikan pendapat atau saran, serta ikut berperan dalam pengambilan keputusan.

c. Gaya Kepemimpinan dan Manajemen.

Selama tahap perancangan 777, Para pimpinan Boeing mengadakan pertemuan setiap minggunya yang disebut ”Muffin Meeting”. Dalam pertemuan ini tidak ada susunan agenda, pembatasan waktu, ataupun pemungutan suara. Pertemuan ini diadakan untuk mendiskusikan masalah project 777 dengan dipimpin oleh Condit sendiri secara informal, dan mempersilakan setiap pimpinan untuk mengungkapkan ide masing-masing. Dengan gaya santai dan saling terbuka antar pimpinan seperti ini, Condit percaya bahwa semangat kerja dapat meningkat sehingga dapat meningkatkan pula produktifitas kerja.

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