{"id":515,"date":"2011-03-03T10:08:11","date_gmt":"2011-03-03T18:08:11","guid":{"rendered":"https:\/\/www.phoenixtechpubs.com\/blog\/?p=515"},"modified":"2015-04-27T13:12:52","modified_gmt":"2015-04-27T20:12:52","slug":"boeing-787-dreamliner-illustrates-the-dangers-of-offshoring","status":"publish","type":"post","link":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/2011\/03\/boeing-787-dreamliner-illustrates-the-dangers-of-offshoring\/","title":{"rendered":"Boeing 787 Dreamliner Illustrates the Dangers of Offshoring"},"content":{"rendered":"

\"\"<\/a>Outsourcing to offshore vendors appears very attractive as a cost saving measure. However, there are inherent dangers that a company must address before committing to an offshore business model, or possibly face costly consequences later.<\/p>\n

Boeing<\/a> provides a clear example with the 787 Dreamliner<\/a>. Development of the midsize energy-efficient airliner began in 2002. Instead of building the complete aircraft in its Everett WA facility, Boeing chose to outsource most of the subcomponents to its vendors, including many offshore vendors. Boeing believed this approach would minimize the use of expensive US labor, inventory, and factory space, dramatically lowering costs.<\/p>\n

However, the 787 Dreamliner is billions of dollars over budget and three years late. According to the LA Times<\/a>, \u201cMost of the blame belongs to the company\u2019s farming out work to suppliers around the nation and in foreign countries.\u201d\u00a0 (\u201c787 Dreamliner teaches Boeing costly lesson on outsourcing.\u201d Los Angeles<\/span> Times<\/span> Feb. 24, 2011<\/a>)<\/p>\n

While Boeing selected overseas vendors with technical expertise, the LA Times noted that Boeing executives \u201cdidn\u2019t recognize that sending so much work abroad would demand more intensive management from the home plant, not less.\u201d The result? Pieces that didn\u2019t fit together, components that didn\u2019t meet specifications, and production delays when critical parts weren\u2019t available in the necessary sequence.<\/p>\n

Jim Albaugh<\/a>, the company\u2019s commercial aviation chief, is quoted in the Los Angeles Times article, \u201cIn hindsight, we spent a lot more money trying to recover than we ever would have spent if we tried to keep many of the key technologies closer to Boeing.\u201d<\/p>\n

Economist Paul Krugman<\/a> observes, \u201cWhen the tasks that need to be done are complex, so that you can\u2019t fully specify what people should do in advance \u2026 it can be better to do these things in-house, so that you can simply tell people to do something a particular way or to change their behavior.\u201d (Krugman, Paul. \u201cThank You Boeing,\u201d posted Feb. 19, 2011, retrieved from http:\/\/krugman.blogs.nytimes.com Feb. 25, 2011<\/a>)<\/p>\n

Offshoring is most risky in those situations where critical technological information resides in a specific geographical location far from the offshore vendor, or where the task to be completed is highly complex or not fully specified prior to beginning the project. In these cases, management must commit significant budgets to oversee the long distance project, or potentially pay much more to correct problems later.<\/p>\n

Andrea is a Senior Staff Writer at Phoenix Technical Publications. Phoenix Tech Pubs has provided complete technical writing and documentation services in the San Francisco Bay Area for over 25 years.<\/address>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Outsourcing to offshore vendors appears very attractive as a cost saving measure. However, there are inherent dangers that a company must address before committing to an offshore business model, or possibly face costly consequences later.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,96],"tags":[102,103,98,99,100,112],"class_list":["post-515","post","type-post","status-publish","format-standard","hentry","category-andreas-blogs","category-tech-writing-industry-news","tag-boeing","tag-dreamliner","tag-offshoring","tag-outsourcing","tag-paul-krugman","tag-san-francisco-bay-area"],"_links":{"self":[{"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=515"}],"version-history":[{"count":20,"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/515\/revisions"}],"predecessor-version":[{"id":2164,"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/515\/revisions\/2164"}],"wp:attachment":[{"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.phoenixtechpubs.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}