Boeing has been building commercial airliners since 1927 with the first Boeing
commercial jet airliner, the 7O7, introduced in l955. As discussed in the
article on page 172 of the text. This success is even more remarkable when one
realizes that the Boeing "Design/ Build" process had not changed very
much during the past three decades. The system was antiquated, cumbersome, and
inefficient creating production delays, increased costs, and spawning a huge
bureaucracy simply to handle the paperwork. Boeing must clearly be motivated to
bring this World War II era process into the 21st Century. Airbus Industries'
increasingly larger share of the commercial airliner market was a major force
instigating these changes. Airbus had the advantages of government subsidies to
help defray the costs of implementing best design practices, as well as
latecomer advantages. It learned from Boeing's, as well as Lockheed's and

McDonnell Douglas', mistakes and it did not have 40 years of bureaucratic
momentum to overcome. Other motivating factors include the need for Boeing to
increase the income from the commercial aircraft division to offset the loss of
revenue due to cutbacks in government defense and aerospace contracts. In this
paper I will attempt to highlight those topics I think should be covered,
suggestions, and background for those reasons. In this I will hope to show why
the Boeing Company was in need of the much-needed overhaul of the design/build
process at Boeing, the changes themselves as well as the methodology used in
accomplishing those changes. The Commercial Aircraft Industry The last decade
has seen the commercial aircraft industry dominated by two manufacturers: the

Boeing Commercial Aircraft Company and Airbus Industries, with McDonnell

Douglas, a distant third. Airbus Industries is a relative newcomer, but it has
very quickly provided much competition to Boeing, surpassing McDonnell Douglas
and Lockheed. Airbus Industries is a consortium backed by the British, French,

German and Spanish governments. The great, and many say unfair, advantage that

Airbus has over the competition is government subsidies allowing Airbus to
operate in the red. Thus, Airbus can afford to develop new technologies without
having to worry about passing on the costs to the customers and can price their
aircraft very competitively to lure away airlines from Boeing. Cost cutting The
effects of the changing airline industry resulting from deregulation in 1978 are
still being felt in the commercial aircraft industry. The competition among
airlines for passengers has resulted in a greater emphasis on cost cutting
leading to mergers and bankruptcies. In addition, airlines modified their
routing systems since they were not limited to certain routes, as was the case
before deregulation, changing their buying patterns for aircraft accordingly.

Airlines were now less concerned with having a technologically superior airplane
and more concerned about the cost and efficiency of that airplane. Why Change.?

The first question that comes to mind is "why would the undisputed leader
in the commercial airliner industry make such a risky, change?". In other
words, doesn't the old motto "If it ain't broke, Don't fix it" apply
in this case? Well according to many observers both inside and outside of

Boeing, the system was 'broke'. To give an example of the inefficiency of the
process that coordinates engineering and manufacturing, it used to take 800
different computer systems to manage it. This process has been around since

Boeing was building the B-17 Bomber in World War II. The process of tracking
parts in an airplane was called "effectinitly" and was done manually!

A drafter required two years of training to fully understand the system, and
still one-third of the paper work contained errors. This "effectivity"
just doesn't make sense, and this process adds absolutely no value to their
product and results in tremendous costs. Regardless of all the evidence pointing
to flaws in the system, changing a successful company is not easy, especially if
we consider the cost and the additional time involved. For the 777, the
additional time is estimated to be six months over the normal 48 months to
develop a new airplane. Getting a tremendously large bureaucratic system to move
forward is a daunting task, especially while continuing to produce airplanes.

The Changes; The changes to the Boeing Commercial Aircraft Company must
encompass all fields. From the philosophy of the company to the technical
details, every aspect of the design/build process will need to be modified.

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