MAC Case Study for Planning and Execution - myassignmenthelp

Question: Discuss about theMAC Case Study for Planning and Execution. Answer: Introduction Overview Of Mac Project Murasaki Aircraft Corporation (MAC) is new Aircraft manufacturer from Japan that produces Regional jets and supplies Wings for Boeings 787 aircraft. The company is currently looking to produce an aircraft which is lightweight using Boeings 787 Dreamliner lightweight construction technologies through international consortium with Boeing and Airbus. Before a concept for this new aircraft can be developed, the management needs to study the cases of 787 and A380 aircraft development projects to identify problems they faced. The project phases as initiation, planning, execution, monitoring and control will be explored. Lessons learned from the two cases would be used for making recommendations to MAC to avoid similar mistakes. Stakeholders Key Players Their Roles MAC: Owner and decision maker responsible for development, production, and sales of the aircrafts. MHI (60% shares): Major supplier of wings and looks into manufacturing of aerospace components, hydraulic equipments, air conditioners, power generation equipments and more. Toyota Mitsubishi Corporation (10% shares each): The Company develops, produces and provides support for regional jet airline passengers. The company has a small share in the company and would provide the support for sales for the aircraft project. Sumitomo Corporation (Minor shares): Technology developer that also has business in trading and real estate. It has a minor share in the project and thus, was a part of communication that was sent about the project to them. Airbus A380 Case Background Airbus A380 made its debut in October 2007 with an Aircraft that flew from Singapore to Sydney followed by another route between Melbourne and Los Angeles in 2008. Airbus has Air France, Emirates, and Lufthansa as its major customers. The company faced several issues related to production and delivery. The project involved development of the first "triple-decker" freight aircraft for long-haul flight market that could challenge Boeing as it was designed to carry 35% more passengers, consume 12% less fuel per seat, weigh less with the use of GLAss-REinforced fibre metal laminate, and was powered by Rolls-Royce Trent 900 or Alliance GP7200 turbofan engines. The average list price of A380 was decided to be $347m (215m). The aircraft was to carry 555 in separate seat classes and 850 passengers economy class. It was to include various facilities like duty free shops, bars, lounges and beauty salons. Factors That Contributed To Failure Incompetence of the company: Inability to deal with the issues led to a delay of two years. Overambitious timelines: The project started in 2000 and was estimated to be delivered in 2006 which was unrealistic as the time required to deliver a normal aircraft is 5-6 years. There were added functionalities in this case that required additional time. Lack of buy-in from staff and management: 3D models and technology was needed in this case but the engineers preferred sticking to a tool called ComputerVision that could only produce 2D models. These older systems were labour intensive and saved jobs while the new system would result into loss of some jobs. So, despite resistance, company installed Catia and Circe that was two powerful modelling software developed by Dassault Systmes. This led to increase in cost and time. Miscalculations: In 2004, 200 German mechanics were involved in installation of copper and aluminium wires around the floor panels and walls of the airframes but after taking many efforts, they were found to be too short. The cause behind this problem was the mistakes in calculation and the result of replacement of all wires from scratch causing a delay of six months. This delay resulted from the problems of wiring, cabin design complexities, and weight issues. Failed communication Management Conflicts: Airbus was formed by a combination of 16 companies from 4 different countries. The project demanded integration for which reorganization was planned with introduction of new administrative structures where top managers were located from each of the 16 divisions. However, this increased conflicts in management. By the year 2005, management problems escalated with the battle of ownership between Airbus, EADS, DaimlerChrysler, Enders and Forgeard. Different customers demanded different functions in the aircraft(Clarke, 2006). Design complexities: A major reason behind delays was the level of complication in manufacturing design caused by the use of 100,000 different wires running over 330 miles and performing 1,150 functions. In designing the wiring harnesses, Hamburg plant used older version of CATIA while Toulouse used the updated version causing compatibility issues. Wiring had to be redone because of which costs were escalated by $6 billion(Shore, 2009). Analysis Of Key Issues The Airbus product suffered major delays after its launch in 2005. Initial delays were caused different software was used for installing 330 miles of wiring than those used for British and French producers. The first production was delivered in October 2007 to Singapore Airlines. Originally planned for 2006, the first planes suffered three major delays, with the launch customer, Singapore Airlines, finally getting hold of the first production model in October 2007 followed by Emirates with 20 planes and Quantas with 15 planes delivered by 2008(Drfler Baumann, 2014). In a Quantas A380 plane, one of the engines exploded after takeoff and the flight had to take an emergency landing. In 2011, one of the Quantas flight faced an oil problem. In 2012, investigations were made on 68 aircrafts by European Aviation Safety Agency that revealed problems like cracks in the wing components and lack of grounding. In subsequent months, there were more delays and the delay extended to 2 years. By 2007, the company could deliver only 9 out of 25 aircrafts promised. The delivery delays resulted into reduction in earnings by 2 billion and reduction in the share value by 26%(BBC, 2012). Aftermath Dealing With Project Failure The ambitious project failed as the production completion was delayed by 2 years that resulted into a loss of confidence of stakeholders and customers of airbus. Moreover, the development costs escalated to $13 billion which the company could not recoup anytime before 2017. The market for such a huge aircraft was not sufficient as it demanded more of fuel-efficient jets. By 2005, the company could get only 172 orders as compared to 354 orders received by Boeing for its Dreamliner(Rochfort, 2016). Lesson Learned It is not always the technical problems that is the main cause of failure Organizational culture is very important aspect in any project and affects its success majorly. A positive organizational culture is needed for project success that is characterized by multiple factors including identity, team emphasis, management focus, unit integration, control, risk tolerance, reward criteria, conflict tolerance, means versus ends orientation, and open system focus. Airbus failed to establish member identity, achieve unit integration and tolerance for conflicts. Boeing 787 Dreamliner Case Background Dreamliner 1 was introduced by Boeing in January 2003 with a latest design of the airplane that was to build a fuel efficient jetliner made of composite material. The Dreamliner was a success by Boeing with 20% increase in fuel efficiency, better in-flight experience, reduced maintenance costs and 30,000 to 40,000 pounds lighter in weight. The company bagged orders for 500 aircrafts within 3 years of the launch of 787 Dreamliner. The project involved longest delays suffered, escalated costs, loss of revenues, loss of customers, loss of investor confidence and reshuffling of management which made it a failure for management. An initial 6 months delay itself caused extra costs of $1 billion and revenues reduction of $3.5 billion. As the problems escalated, the delays were increased to 3 years and the cost escalated manifolds(Denning, 2013). Factors That Contributed To Failure Supply chain problems: The count of fasteners dropped in case of this project which led to the lack of enthusiasm by the vendors to make the deliveries on time. They were looking on larger deliveries and it contributed in the complexities in supply chains and associated delays(Shenhar, et al., 2016). Outsourcing Complexities: The role of Boeing was limited to general design and assembling while 90% of manufacturing activities were outsourced. Major suppliers of Boeing such as Spirit AeroSystems and Vought Aircraft Industries from USA, Alenia Aeronautica from Italy, Kawasaki Heavy Industries, Fuji Heavy Industries, and Mitsubishi Heavy Industries from Japan further outsourced the contracts to sub-contractors. As a result, only 16% of the aircraft structure could be completed after receiving the first supply. There were also more problems with sub-suppliers like Brake Control Monitoring System (BCMS) developed by Crane that had serious feedback problems and a designing of code was demanded. This lead to an additional cost of $18.9 million for Boeing as Crane was not willing to take the ownership of risk(MarketLine , 2012). High Cost of Development: The initial cost of development was itself high caused by several desired of Boeing such as reduction in risks, a system integrator role, and availability of suppliers willing to invest in development. To achieve this objective, Boeing decided to use GSP model. Lack of competency: The Company chose to play a role of a system integrator which was not its core competency. This led to mismanagement issues and conflicts(Elahi, et al., 2014). Analysis Of Key Issues Major causes of delays on the project included: Alternative suppliers should have been selected in advance to deal with the scenarios associated with lack of enthusiasm for orders of fasteners and likewise. Because of multilayered supply chain structure that involved a large number of suppliers caused delays as they acted independently and made deliveries with their own speeds. Outsourcing of core competencies and increased reliance on the suppliers. Causes behind increase in the costs include: Lack of training and competency of workers caused rework that incurred extra costs Initial development cost was already more and with the first six months delay, the company invested more into project for speeding up the work despite the losses faced. Aftermath Dealing With Project Failure Production delays had many consequences on the company and some of these were huge increase in the cost and reduction in the stock prices post first delay announcement. To deal with the project costs, the company decided to use cost cutting to save on the expenses. The company was more ignorant about the problems at the initial stages as they were minor. The company invested more to speed up the work. Lesson Learned Identification of core competency is essential as it can affect the success of the project Using existing core competency is always more beneficial than creating a new competency to deal with a project. Developing new core competencies can result into the reduction in the strength of the existing core competencies of an organization If high value adding functions of a project are transferred to suppliers such as designing and manufacturing can lead to increase in dependency over suppliers Recommendations For Murasaki Aircraft Corporation (MAC) Based on the lessons learned from the two cases, certain recommendations can be made for MAC such as: Identification of core competencies and development of strategies accordingly with selection of tasks to be outsourced. Necessary to gain buy-in from the staff as well as from the top management for which the company must clearly communicate the cultural and procedural changes as well as benefits to each stakeholder and staff member on additional responsibilities and support. Training schedule and requirements must be planned in advance. Phased and iterative development procedure so that the bugs can be detected in a timely manner. Improved vendor selection process based upon the past experience, market trends, customer comments and reviews. Advanced requirement gathering and stakeholder analysis activities shall be carried out. An advanced risk management plan and strategy shall be in place. Conclusions The objective of the report was to ensure that the company did not make similar mistakes on the project as done by the two cases discussed including Boeing and Airbus. Both project saw major delays in deliveries and cost overruns that made the projects unprofitable. Other issues included lack of buy-in from the management, incompetence of the project organization, inaccurate estimation or inefficient designing. Some recommendations made for MAC included use of core competencies for in-house development, outsourcing of activities that are not core to the company, training to employees on equipments, use of iterative methodology for development, in-depth requirement gathering, and use of strong assessment procedure for project vendors and contractors. References BBC, 2012. Factfile: Airbus A380.. [Online] Available at: www.bbc.com/news/business-41773715 [Accessed 30 October 2017]. Clarke, N., 2006. The Airbus saga: Crossed wires and a multibillion-euro delay - Business - International Herald Tribune. [Online] Available at: https://www.nytimes.com/2006/12/11/business/worldbusiness/11iht-airbus.3860198.html [Accessed 30 October 2017]. Denning, S., 2013. What went wrong at Boeing. Strategy Leadership, pp. 36-41. Drfler, I. Baumann, O., 2014. Learning from a Drastic Failure: The Case of the Airbus A380 Program.. Industry and Innovation, pp. 197-214.. Elahi, E., Sheikhzadeh, M. Lamba, N., 2014. An Integrated Outsourcing Framework: Analyzing Boeing's Outsourcing Program for Dreamliner (B787).. Knowledge and Process Management. , p. 1328. MarketLine , 2012. Boeing Case Study. The 787 Dreamliner.. [Online] [Accessed 30 October 2017]. Rochfort, S., 2016. Delay issues cloud A380 visit.. The Sydney Morning Herald, 28 November, pp. 1-2. Shenhar, A. J., Holzmann, V., Melamed, B. Zhao, Y., 2016. The Challenge of Innovation in Highly Complex Projects: What Can We Learn from Boeing's Dreamliner Experience?. Project Management Journa, p. 6278. Shore, B., 2009. Airbus 380. [Online] Available at: https://globalprojectstrategy.com/lessons/case.php?id=23 [Accessed 10 October 2017].