Bumpy Ride for Boeing's 787 Dreamliner | Hacker News Reader

Bumpy Ride for Boeing's 787 Dreamliner

portfolio.com

38 pointspg14 comments

I designed and built a key electrical system to this plane during late-spring of 2007. I don't know whether I can say which one. Anyway, the company I worked for was at the end of the line as far as outsourcing goes. Boeing outsourced the design, development, and manufacturing to one the world's largest corporations (Company A), who outsourced it to another company of similar size (Company B), who then outsourced it to the much much smaller company that I worked for (Company C) some time in mid-Spring 07.

We knew in May 07 that there was a 0% chance that the 787 would actually fly on 7/8/07; a critical component was still in development. For that certain critical component, Company A dictated to Company B which one to use and who to buy it from (Company D). The problem is that the part was still in development by Company D. The electrical component specifications significantly stretched what actually existed on the market at that time. I didn't think Company D would be successful in designing the critical component. It was certainly a big leap forward. We knew that Company D would not have the part done by July 07. The hope was August of that year.

In June 07 my company successfully designed and built a few prototypes of the system we were tasked to build. They passed all specifications dictated by Boeing, Company A, and Company B. We dutifully delivered the prototypes to Company B in June 07. The only problem was critical component from Company D wasn't there, and therefore the 787 could not fly.

I don't know whether Company D ever delivered. But I do know that Company B (the company that outsourced to us) ordered a few more of the product I designed at the end of last year, and the critical component from Company D was not supplied to my company. I don't know whether the part existed. But it doesn't seem likely since Company B would have had us put it in. My guess is that Company D, or a replacement outsourcer, was able to deliver some time at the beginning of this year, maybe Spring. Hence the two year delay.

I no longer work at the company where I designed this system, so I no longer have any first hand knowledge of the goings on. But from what I read in the article, the root cause of the delays has not been fixed. I would put my money on further delays.

How complicated can building a plane be? . . . Seriously, what a tale. Thanks for sharing but I remember seeing commercials for the 787, marketed as the response to the Airbus A380, as if Boeing was expecting me as a passenger to ask if I could fly in one next month.

I honestly have no idea how complicated building a plane can be. What I designed required zero plane building knowledge. But given how long it takes and expensive it is, I think it is more difficult than it looks. There are technical difficulties, and then there are difficulties in dealing with massive, distributed teams. The second one increased problems managing the first, which is why we read that article today.

Two of the main design constraints for planes are weight, and its close close relative, fuel efficiency. Consider those as important as actually being able to fly.

The whole reason my project existed was to reduce weight and increase fuel efficiency. What made the critical component I talked about difficult to make was that it needed to be much more efficient than any of its type ever made before. Its efficiency would allow for less operating current, which would reduce the wire gauge needed throughout the plane, reduce weight by 1000s of pounds, and therefore save many gallons of fuel.

It also allowed for another fuel efficiency gain; It reduced the number of systems operating via air or hydraulics. The air comes from the engine after the compressor stage but before fuel is added. These systems are inefficient because the air from the compressors is very hot and it must be cooled before use. That cooling operation takes electricity, and therefore wastes energy when compared to a system that just used electricity from the start.

I should add that the critical component is not a discrete one like a transistor or resistor. Rather it is a system of its own, like a power supply is a system of its own, but we can buy one and as an engineer consider it a single component.

I don't know Boeing's rationale for TV commercials either. It could be anything from putting the Boeing name in front of Americans for American pride when competing against European Airbus. Or maybe they know that the decision maker at a key potential customer loves NFL football, and Boeing blanketed his hometown team with ads during the games. Maybe the marketing department wanted to use up their yearly budget.

Whatever the reason is, when hundreds of billions of dollars in orders are at stake like this, the ads aren't directed at people who purchase plane tickets. I am guessing the ads are out there to make sure that every plane purchasing decision maker absolutely knows that the 787 exists and that they should buy it, and making sure that every member of Congress (and their constituents) absolutely knows that the 787 exists and Americans should support it, as opposed to Airbus.

The thought entered my mind to short $BA after reading this when you posted it. Today, Boeing made the delay official and the stock dropped 7% right at opening.

http://money.aol.com/rtn/pr/boeing-postpones-787-first-fligh...

I wish I checked the date on the Portfolio article. I didn't realize it was for the May issue.

In Boeing's recent statement they said they need a few weeks to determine the length of the delay. It is not a good sign when it takes weeks to find out how far behind you are.

Prediction Number 2: For every week it takes Boeing to release an updated schedule, the delay will be 1-2 months. I think it will take Boeing 2-3 weeks to release a statement, so that means somewhere between 2-6 months delay. I'll take 6 months.

Boeing lost about $3B in value yesterday and today. Boeing margin on planes is a maximum of about 6%. To me, this means Wall Street thinks about 250 planes (or more) are now delayed. I figured that out by solving $3B / 6%, which is total revenue expected by Boeing when profits are $3B. I took that number and divided by $200MM, which is the approximate sales price per plane. That comes out to be 250 planes (which would result in $3B profit).

Boeing says they would be able to produce about 10 planes per month, eventually ramping up to 16. That means it takes about 2 years for Boeing to make 250 planes.

Checking my numbers, I said a 6 month delay, then there will be 1 year of testing, and then Boeing can start manufacturing. So I predicted somewhere over 18 months, assuming no further problems (yeah right), while Wall Street predicts around 2 years, pending further statements.

Prediction #3: First non-test version 787 delivered to a customer Fall 2011.

I may regret that prediction later in life. :)

Thank you for your insight. "Much work needs to be done before we announce to the world that much work needs to be done"

It seems that the reason that this type of strategy is so rampant and insidious is because it makes it easy to substantiate cost cutting goals using unrealistic bids from inexperienced subcontractors. The costs that often go neglected in the whole process is the added managerial costs that go along with any outsourced work. For most projects, especially complex ones (as is aircraft design and manufacture), the overhead costs can easily outweigh initial cost saving estimates from outsourcing.

More importantly, it is a very short sighted strategy that favors short term cost savings against the long term institutional knowledge that will help sustain it in the long term. With the incredibly long development and production cycles, Boeing might not have the appropriate capabilities in the long term. While Boeing did do the initial design on the 787, they have outsourced much of the detailed manufacturing design to their vendors, leaving an important knowledge gap.

Here is an interesting presentation titled "Is Outsourcing Profitable?"

http://www.strassmann.com/pubs/gmu/OutsourcingV6.pdf

It presents some case studies and findings that do not substantiate the cost savings claims of outsourcing.

This is the core problem with outsourcing that we will also face in the software industry - when groups work isolated from one another - the things they produce get difficult to integrate and arrive with very different quality.

Outsourcing is really not going to take over manufacturing. It will have its place, but it has to be carefully controlled and selected - not everything can be outsourced.

So compared to the 777, the 787 is claimed to reduce fuel consumption by 20 percent, but it only carries 250 passengers instead of 300 - about 17 percent fewer. It seems to me that surprisingly little energy per passenger is going to be saved by replacing aluminum with plastics as the base material here. Does anybody here have an idea about the energy requirements of aluminum vs plastics in plane production? Are there significant savings zu be expected?

"So compared to the 777, the 787 is claimed to reduce fuel consumption by 20 percent…"

It was perhaps worded poorly but that's not what the article said: "Dreamliner will use 20 percent less fuel than jets of similar size…" I would wager a lot that if a 777 was redesigned with composites it would likely have similar fuel savings (~20%) over an aluminum 777.

If you take a look at the table in the link at the bottom you will see the 777 is primarily for long-range, high-capacity flights. The 787 was originally intended as a replacement for the 767 and as a competitor to the A330-200. The majority of flights are shorter and carry fewer passengers than the target of the 777. So fuel efficiency is just fuel efficiency and fewer passengers is just a different market segment. The 787 is simply aimed at a different and higher volume market than the 777.

http://en.wikipedia.org/wiki/Competition_between_Airbus_and_...

I believe the biggest difference is it can fly further than any other passenger jet. A london-Sydney could be done in a single hop rather than having to stop and refuel in Bangkok or Hong Kong.

The difference between the 380 and 787 were the markets that were trying to buy them. The 380 made good sense for UAE carriers because Dubai is trying to be a hub between the east and west. The airlines in the west and east don't want their roles to be diminished so they see the 787 as a point to point airplane. No hub or refueling stops necessary.

After having to deal with Atlanta, Chicago, Charlotte, and Heathrow I'd much rather get to my destination than have to deal with another hub.

I would assume it meant per passenger. There's also the savings by having fewer empty seats, a slightly smaller plane gives the airline more flexibility in scheduling.

Plasma TVs? Really? I can't even fathom why they chose those over LCDs, given lifespan and burn-in issues.

I don't think the article is accurate - usually airplane seats are purchased by the airline (from another company) and not by the manufacturer - and in this size of planes, the TV is usually in the seats.

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