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787 Battery Issues Show Weakness Of US Prod Method  
User currently offlinePHX787 From Japan, joined Mar 2012, 6942 posts, RR: 18
Posted (11 months 4 days 5 hours ago) and read 14815 times:

I was having a lengthy discussion with my professor about the recent 787 issues. This professor specializes in Japanese business practices and has extensively studied how the american system of management works. He stated that the 787 battery issue was not necessarily the issue with Yuasa, the battery maker, but rather how Boeing managed the production of the 787 itself.

A good percentage of the dreamliner is built in Japan. These companies were selected by Boeing for having the best possible product for boeings new airplane. But these companies in Japan rarely ever produce the whole product themselves. These products are usually built by many many diverse suppliers, often producing the same thing for the individual product. For example, since part of the wing is built in Nagoya, that Nagoya company probably has 5 or 6 companies which all build the same component of the wing, which is then sent to Nagoya for wing construction and then, dreamlifted to PAE for final construction

Same goes for Yuasa. They have many companies which build components for their batteries. Yuasa is a diverse company which also builds li ion batteries for electric cars too.

Even though they never found out why 829J and 804A had their batteries melt down, it is generally thought that one supplier out of many constructed an unsafe particular cell, which probably will be discovered in subsequent batteries upon further inspection. Other Yuasa suppliers were uneffected, which really points out the isolated nature of this serious incident. But at the same time it does send Boeing one message.

Because of USA antitrust laws, Boeing essentially was only allowed to use one battery supplier, after observing the market. Other battery suppliers competed with Yuasa to use their battery on the Dreamliner but Yuasa was chosen. Boeing is only allowed to cooperate with Yuasa therefore-no other company-which means that their standards and yuasas standards could have been conflicted. Because of the weakness of this type of management compared to the Japanese method, this whole grounding mess may have been prevented if Boeing was allowed to cooperate with many battery suppliers instead of just one.

In Japan, between companies, if there's a conflict of interest, messages are sent between the head company and the supplier explaining the situation. Should the Japanese company choose to discontinue cooperation with the supplier, more cooperation is done between subsequent, equal-tier suppliers. For example, Toyota has probably about 15,000 suppliers under them, independent companies which cooperate with Toyota. Should an issue arise with a particular part- you all hear every so often a recall is issued- Toyota either discontinues partnerships with that supplier or sends them a warning to fix what's going on, focusing on other suppliers instead. The recall is issued because they want to take preventative measures and know who was responsible.

I'm not saying that Boeing, Yuasa, or whoever is at fault. I'm not saying that the antitrust law in the us is bad and we should have monopolies; but these issues should raise eyebrows. America could learn something about efficiency from Japan, in my opinion. Especially if they wanna prevent safety issues from happening.


One of the FB admins for PHX Spotters. "Zach the Expat!"
48 replies: All unread, showing first 25:
 
User currently offlineKD5MDK From United States of America, joined Mar 2013, 240 posts, RR: 0
Reply 1, posted (11 months 4 days 5 hours ago) and read 14758 times:

This doesn't make any sense, unless you're claiming that if Boeing had alternate qualified suppliers for the battery (say Panasonic, since I know they make Li-Ions for Tesla) that they could have just switched to the alternate battery supplier instead of being forced to work with Yuasa. However, in order for that to be plausible the fault would have to be identified as related to the particular assembly done by Yuasa and not an overall design fault. Or are you saying that the fault could have been isolated to "batteries supplied by Subcontractor X" and batteries which didn't involve X's parts would have remained ungrounded? I don't think either scenario is likely, given the circumstances that occurred.

User currently offlineikramerica From United States of America, joined May 2005, 21416 posts, RR: 60
Reply 2, posted (11 months 4 days 4 hours ago) and read 14621 times:

This whole argument helps explain why Japan, at the precipice of global dominance, regressed so dramatically. They are unable to admit fault or failure within their corporate culture. Denial.

As for the reason Boeing suffered the grounding, it has little to do with the "weakness" of us production methods and everything to do with the weakness of Japanese regulation and oversight. The Japanese government failed repeatedly with regard to safety in the auto, aviation, nuclear and other industries, and to save face and show how proactive they are, jumped the gun on grounding the 787. Once they did so, without a proper investigation and at odds with historical aviation groundings when no fatalities occurred, it forced the FAA to follow suit. Had the JAA not acted prematurely, the 787 would never have been grounded, and we would be looking at a hot fix similar to the 77W engine gearbox.



Of all the things to worry about... the Wookie has no pants.
User currently offlineAntoniemey From United States of America, joined Dec 2005, 1531 posts, RR: 4
Reply 3, posted (11 months 4 days 4 hours ago) and read 14551 times:

Quoting PHX787 (Thread starter):

Because of USA antitrust laws, Boeing essentially was only allowed to use one battery supplier, after observing the market. Other battery suppliers competed with Yuasa to use their battery on the Dreamliner but Yuasa was chosen. Boeing is only allowed to cooperate with Yuasa therefore-no other company-which means that their standards and yuasas standards could have been conflicted. Because of the weakness of this type of management compared to the Japanese method, this whole grounding mess may have been prevented if Boeing was allowed to cooperate with many battery suppliers instead of just one.

Antitrust laws have nothing to do with how many suppliers Boeing uses for one particular part. Patent law might, if they were using a process or design patented by a particular supplier, but antitrust law doesn't care who you contract with, only whether or not your market dominance is a natural result of a superior product or based on "unfair" practices.



Make something Idiot-proof, and the Universe will make a more inept idiot.
User currently offlineHOmSaR From United States of America, joined Jan 2010, 1103 posts, RR: 0
Reply 4, posted (11 months 4 days 4 hours ago) and read 14552 times:

Quoting PHX787 (Thread starter):
Because of USA antitrust laws, Boeing essentially was only allowed to use one battery supplier, after observing the market.

Anyone care to explain what antitrust laws force Boeing to only use one battery supplier?

How are batteries different from, say, engines (for which there are two main suppliers), or any number of other components, for which there are (or have been, on other airplane types) many different potential suppliers?



I was raised by a cup of coffee.
User currently offlinequestions From Australia, joined Sep 2011, 672 posts, RR: 1
Reply 5, posted (11 months 4 days 4 hours ago) and read 14503 times:

Quoting PHX787 (Thread starter):
I was having a lengthy discussion with my professor about the recent 787 issues. This professor specializes in Japanese business practices and has extensively studied how the american system of management works.

You should get another professor... you're wasting your money on this one.


User currently offlineRickNRoll From Afghanistan, joined Jan 2012, 701 posts, RR: 0
Reply 6, posted (11 months 4 days 3 hours ago) and read 14332 times:

Quoting questions (Reply 5):
You should get another professor... you're wasting your money on this one.

  


User currently offlinenighthawk From UK - Scotland, joined Sep 2001, 5093 posts, RR: 35
Reply 7, posted (11 months 4 days 2 hours ago) and read 14161 times:

Quoting Antoniemey (Reply 3):
Antitrust laws have nothing to do with how many suppliers Boeing uses for one particular part. Patent law might, if they were using a process or design patented by a particular supplier, but antitrust law doesn't care who you contract with, only whether or not your market dominance is a natural result of a superior product or based on "unfair" practices.

This is nothing to do with Anti-Trust laws - Boeing are free to use as many suppliers as they wish to produce batteries (or any other component). However, the aviation industry requires that each component must be certified, and then the final design must be certified with those components.

This would require Boeing to certify the 787 multiple times for each battery combination - an expense that simply would not be worthwhile. It is currently done for engine variations, as each airline has their own engine preference due to differing performance characteristics, therefore making it worthwhile doing, but no airline is going to care who manufactured the battery, as there will be no benefit between differing models.


Quoting questions (Reply 5):
You should get another professor... you're wasting your money on this one.

  



That'll teach you
User currently offlineADent From United States of America, joined Dec 2006, 1333 posts, RR: 2
Reply 8, posted (11 months 4 days 2 hours ago) and read 14095 times:

Boeing contracted with Yusa?

Or did Thales contract with Yusa?


User currently offlineatcsundevil From United States of America, joined Mar 2010, 989 posts, RR: 2
Reply 9, posted (11 months 4 days 1 hour ago) and read 14063 times:

I think you're reading way too much into this. The 787 had/has battery issues because the use of li ion batteries in commercial aircraft has not been entirely proven. Even Airbus is staying away from it on the early A350 deliveries, which leads me to believe it's a design issue and not a supplier issue; otherwise they'd just use a different supplier. Utilizing new technologies on a clean sheet, revolutionary aircraft comes with many challenges, not least of which having to deal with teething issues. If it wasn't the battery then it would have been something else. Literally any new product designed from a clean sheet is inherently assumed to have faults.

There's no harm in exploring the reasons behind failures like this, so I think your search to better understand the cause is valid. I would just suggest not losing sight of the big picture -- your explanation draws conclusions based on cultural differences in business practices and perceived flaws in the American way of doing business. If that is the reason behind all of this, then what does it matter? Japanese business practices and US anti-trust laws won't change because of 787 battery problems. I just don't think the situation is nearly that complex.



If I wanted your opinion, I'd give it to you!
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3475 posts, RR: 3
Reply 10, posted (11 months 4 days 1 hour ago) and read 14009 times:

Whatever is he a professor of ? obviously nothing to do with business or manufacturing.

This has nothing to do with anti trust laws, indeed anti trust laws restrict the ability of businesses to reduce competition, not aid them as your "professor" claims.

The problem in this instance is more likely to be that Boeing increasingly expects suppliers to become risk sharing and designing partners in their projects. Traditionally sub contractors either quoted a price to produce to Boeing drawings, or just quoted a price for a proprietary product. When their order was fulfilled, they then competed again.

Now however suppliers are granted a permanant place on the project, but have to take part of the financial risk. Yuasa will have design authority for the battery system, plus a long term contract, making it very difficult for Boeing to seek an alternative supplier.


User currently offlinePHX787 From Japan, joined Mar 2012, 6942 posts, RR: 18
Reply 11, posted (11 months 4 days ago) and read 13849 times:

I don't think you guys are understanding the main argument here:

Quoting Bongodog1964 (Reply 10):
Whatever is he a professor of ? obviously nothing to do with business or manufacturing.
Quoting questions (Reply 5):
You should get another professor... you're wasting your money on this one.

Actually he's one of Asia's top respected professors. He has been strongly against the policies that brought japan down during the 90s but no one really listened to him much. His ideals are pretty much the ideals that shaped Japan's emergence as a global economy throughout the 60s, 70s, and 80s. He also has advised some top government officials who are now working to bring Japan out of the hole they are in from the last 20 years. This guy's pretty qualified.

Quoting Bongodog1964 (Reply 10):
This has nothing to do with anti trust laws, indeed anti trust laws restrict the ability of businesses to reduce competition, not aid them as your "professor" claims.
Quoting Bongodog1964 (Reply 10):
The problem in this instance is more likely to be that Boeing increasingly expects suppliers to become risk sharing and designing partners in their projects.
Quoting nighthawk (Reply 7):
This is nothing to do with Anti-Trust laws - Boeing are free to use as many suppliers as they wish to produce batteries (or any other component).
Quoting HOmSaR (Reply 4):
Anyone care to explain what antitrust laws force Boeing to only use one battery supplier?

Everyone is missing the point here.
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier. According to the anti-trust law they must only work with one (maybe 2 at the most) in order to comply. This system is done to avoid the horizontal monopolies from being formed. According to those skeptical of that business practice, they are afraid that such collaboration up until final production would result in price controls, unfair wages, and a lesser quality product, which is all incorrect. If such a formation occurs, as per Japan's system (which mind you brought Toyota to be the most profitable company in Asia), anti-trust people believe that the company will merge itself into 1 huge company, which is incorrect. If you follow Toyota's model they only produce about 20-30% of their parts internally and are responsible for the final product.
Boeing attempted to do this with the 787. IIRC about 40% are produced by Boeing themselves (correct me here if I'm wrong) and the rest are outsourced abroad. Thats a start but the quality of the products could be stymied if they weren't allowed to collaborate with many products. If Boeing collaborated, risk-shared, and worked with multiple battery suppliers instead of just Yuasa maybe they would have been able to produce a battery that wouldn't have caught fire like this. The flaw here is that there wasn't enough research done into the product because there wasn't enough mind space (enough companies, institutes, etc) available for Boeing to do the research.

Quoting atcsundevil (Reply 9):
The 787 had/has battery issues because the use of li ion batteries in commercial aircraft has not been entirely proven.

See above. Because they weren't able to do enough research and testing, the issues occurred. Obviously Boeing was on a huge time crunch--they delayed the first flight a number of times, remember--and if they were allowed to collaborate more with companies that knew what they were doing or companies which had potentially safer suppliers maybe we'd have a different result.

Obviously the 787 launch was extremely rocky. I don't think we can say that the 787 suffered "teething issues." I don't recall the A380, the 777, or other large aircraft having such a huge delay along with such immense problems as the Dreamliner. Don't get me wrong, I love this plane. It wouldn't be in my username if I didn't like it. But I really wish Boeing could have been able to do much more research, collaboration, and testing via multiple companies before the aircraft entered service or was certified by the US.

Quoting nighthawk (Reply 7):
This would require Boeing to certify the 787 multiple times for each battery combination - an expense that simply would not be worthwhile.

Not really, because those companies would be producing the exact same product, to the exact specifications of Boeing, and the regulators who approve it. It's not the same as different engines, because GE and Rolls Royce produce the 787 engines in different methods.



One of the FB admins for PHX Spotters. "Zach the Expat!"
User currently offlineAeroWesty From United States of America, joined Oct 2004, 20322 posts, RR: 63
Reply 12, posted (11 months 4 days ago) and read 13811 times:

Quoting PHX787 (Reply 11):
Everyone is missing the point here.
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier. According to the anti-trust law they must only work with one (maybe 2 at the most) in order to comply.

Antitrust laws are in place to avoid restraint of trade, prevent to establishment of cartels, and promote healthy competition in the marketplace. What you're describing IS restraint of trade, cartel-seeking behavior, and dampens competition.

Either you've misunderstood what the professor was explaining, or you need a new professor.



International Homo of Mystery
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3475 posts, RR: 3
Reply 13, posted (11 months 4 days ago) and read 13702 times:

You are 100% wrong, as we all keep trying to explain to you, anti trust laws encourage/insist on multiple sourcing in order to prevent monopolies forming. The problem here lies with either you or your professor. He's not an economist by any chance ?

User currently offlinenighthawk From UK - Scotland, joined Sep 2001, 5093 posts, RR: 35
Reply 14, posted (11 months 3 days 23 hours ago) and read 13653 times:

Quoting PHX787 (Reply 11):
Everyone is missing the point here.
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier. According to the anti-trust law they must only work with one (maybe 2 at the most) in order to comply.

It is you that is missing the point. There is nothing in anti-trust laws stating that you can only work with one supplier!

have a read of http://www.investopedia.com/ask/answers/09/antitrust-law.asp and tell us which of the three categories such an arrangement would fall foul of.

Quoting PHX787 (Reply 11):
Not really, because those companies would be producing the exact same product, to the exact specifications of Boeing, and the regulators who approve it. It's not the same as different engines, because GE and Rolls Royce produce the 787 engines in different methods.

If the part comes from a different supplier, then it will have a different part number, and will need to be certified for use. If they are indeed identical products, then they may get by without having to re-certify the aircraft.

However this situation is very unlikely due to patent laws, more than anything. If Company A develops a new battery design, then you can bet your ass they will patent it, and the chances of them then allowing Company B to build them is slim to none existent. You might get a situation where Company A and Company B both produce similar batteries, but they will never be identical - each company will have a different idea of how to do things. (Take the PC market as a good example - you have Intel and AMD, both producing compatible processors, but they are not identical, and both need different motherboards due to different ways of achieving the same aim).

The only way this could occur is if Boeing themselves developed the battery design, then subcontracted the manufacturing of the item to two or more companies. This would be perfectly legal, and wouldn't fall foul of anti-trust laws, but is again this is unlikely to occur as Boeing does not have the expertise in developing batteries.



That'll teach you
User currently offlineAeroSafari From Turks and Caicos Islands, joined Nov 2010, 64 posts, RR: 0
Reply 15, posted (11 months 3 days 23 hours ago) and read 13282 times:

Quoting ikramerica (Reply 2):
This whole argument helps explain why Japan, at the precipice of global dominance, regressed so dramatically. They are unable to admit fault or failure within their corporate culture. Denial.

As for the reason Boeing suffered the grounding, it has little to do with the "weakness" of us production methods and everything to do with the weakness of Japanese regulation and oversight. The Japanese government failed repeatedly with regard to safety in the auto, aviation, nuclear and other industries, and to save face and show how proactive they are, jumped the gun on grounding the 787. Once they did so, without a proper investigation and at odds with historical aviation groundings when no fatalities occurred, it forced the FAA to follow suit. Had the JAA not acted prematurely, the 787 would never have been grounded, and we would be looking at a hot fix similar to the 77W engine gearbox.

   Nailed it ikramerica. Theres more to this then meets the eye, but the Japanese side of this story (especially the main company involved with the battery) is in place to defend itself and stay aloft so to speak.



Just remember, the sweet is never as sweet without the sour
User currently offlinePITingres From United States of America, joined Dec 2007, 1084 posts, RR: 13
Reply 16, posted (11 months 3 days 22 hours ago) and read 12321 times:

Quoting PHX787 (Reply 11):
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier.

That's certainly not US anti-trust law from what I know of it. What anti-trust law prohibits is collaboration between multiple companies already making competing products, so as to price-fix or form a monopoly. That's not the same thing. I know of absolutely no provision in US anti-trust law that limits a manufacturer in their choice of suppliers, and in fact (as has been mentioned already), any applicable anti-trust clauses would go in the direction of requiring multiple suppliers to make their wares available to Boeing -- the exact opposite of the claim.

I would guess that single-source usually happens for low rate parts that require specialized manufacturing skills or expensive tooling. Yuasa might own the design and/or patents on the design, but I would be astonished if their contract with Boeing didn't require Yuasa to license the design and production processes to another company if Boeing demanded it.



Fly, you fools! Fly!
User currently offlinekgaiflyer From United States of America, joined Jul 2008, 4142 posts, RR: 1
Reply 17, posted (11 months 3 days 22 hours ago) and read 12228 times:
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Quoting questions (Reply 5):
You should get another professor... you're wasting your money on this one.

I'm an academic myself and couldn't agree more.   


User currently offlineAA94 From United States of America, joined Aug 2011, 531 posts, RR: 0
Reply 18, posted (11 months 3 days 21 hours ago) and read 12040 times:

Quoting PHX787 (Reply 11):
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier.

Again, you are incorrect. The point of anti-trust laws are to ensure that the scenario you have described above does not happen. Anti-trust laws exist in order to encourage and further competition for the benefit of consumers, not restrict trade and other market practices.

It simply isn't, by definition, an anti-trust situation.



Choose a challenge over competence / Eleanor Roosevelt
User currently offlinelightsaber From United States of America, joined Jan 2005, 12418 posts, RR: 100
Reply 19, posted (11 months 3 days 21 hours ago) and read 11805 times:
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Quoting PHX787 (Reply 11):
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier.

  

That is very untrue. No anti-trust law comes into play here. For example, Boeing often has multiple tire vendors on an aircraft. In the case of the 787, they have *two* risk-sharing engine vendors and a third that wanted to offer an engine. If there had been a business case for two battery vendors, Boeing (or Thales?) would have gone with two vendors. This is a contracts issue (well, actually a return on investment issue and probably an intellectual property issue), not an anti-trust issue.

Quoting HOmSaR (Reply 4):
Quoting PHX787 (Thread starter):
Because of USA antitrust laws, Boeing essentially was only allowed to use one battery supplier, after observing the market.

Anyone care to explain what antitrust laws force Boeing to only use one battery supplier?

Quote the law by article. This is 100% counter to my experience in aerospace. Mutli-sourcing is typical when economical.

Boeing routinely has multiple vendors for 'non-proprietary' components. Take brakes. That is developmentally the most similar product to the battery from a risk perspective. Most Boeing aircraft start off with one brake vendor but usually end up with several. However, for batteries, there wasn't enough of a business case for multiple vendors. For example, both Honeywell and Goodrich offer brakes for the 77W/77L. I forget who had the initial contract...
The new equipment is now standard on 777 airplanes delivered with Goodrich equipment, and will be available in the aftermarket starting in January 2011.
http://www.goodrich.com/portal/site/...0000b3f67eaaRCRD&vgnextfmt=default

And the Honeywell offering:
http://www.honeywell.com/sites/servl...CA119B-CCDB-A21B-7C2D-EBE76D988667

Quoting ADent (Reply 8):

Boeing contracted with Yusa?

Or did Thales contract with Yusa?

Good question. Who contracted Yusa?

Quoting AeroSafari (Reply 15):
Quoting ikramerica (Reply 2):
This whole argument helps explain why Japan, at the precipice of global dominance, regressed so dramatically. They are unable to admit fault or failure within their corporate culture. Denial.

As for the reason Boeing suffered the grounding, it has little to do with the "weakness" of us production methods and everything to do with the weakness of Japanese regulation and oversight. The Japanese government failed repeatedly with regard to safety in the auto, aviation, nuclear and other industries, and to save face and show how proactive they are, jumped the gun on grounding the 787. Once they did so, without a proper investigation and at odds with historical aviation groundings when no fatalities occurred, it forced the FAA to follow suit. Had the JAA not acted prematurely, the 787 would never have been grounded, and we would be looking at a hot fix similar to the 77W engine gearbox.

   Nailed it ikramerica. Theres more to this then meets the eye, but the Japanese side of this story (especially the main company involved with the battery) is in place to defend itself and stay aloft so to speak.

IMHO, I agree. Yes, I believed the 787 statistically was a judgement call for grounding, so I will not blame the Japanese authorities for the grounding. But I do believe the HUGE lapses in regulatory oversight by the Japanese government forced them to 'find a target' and pushed the judgement call further/faster than typical.



Quoting nighthawk (Reply 7):
This would require Boeing to certify the 787 multiple times for each battery combination - an expense that simply would not be worthwhile.

Boeing routinely certifies new brakes and tires for their aircraft. Those cost multiples more in certification costs than a battery. Boeing also certifies minor components (circuit breakers, wire, valves, floor panels, seats, coffee makers, microwaves, ovens, lavoratories, avionics, IFE, wifi) that at first glance seem as not 'worth it,' but in reality are.

Quoting PITingres (Reply 16):
I would guess that single-source usually happens for low rate parts that require specialized manufacturing skills or expensive tooling. Yuasa might own the design and/or patents on the design, but I would be astonished if their contract with Boeing didn't require Yuasa to license the design and production processes to another company if Boeing demanded it.

You are probably correct in all but one detail. Yuasa cannot be made to license their design *unless* they fail to either meet or commit to the contractually delivery/ramp up rates. Single source usually happens as the vendor pays for a significant (for them) fraction of the non-recurring engineering. At any time Boeing can buy out Yuasa from their contract, but that is usually paying off all of the vendors 'sunk costs' (including overhead) plus a 15% (or so) profit margin. Even then, Boeing wouldn't be able to make Yuasa offer any information or drawings. That would just allow Boeing to find another vendor to restart development.

Note: those ramp up rates are what are stalling production increases. Give the vendor their required lead time (this can be as much as 24 months for engine casings) and *guaranteed* production duration (3 years is typical) and the parts arrive. Right now Boeing and airbus desire the ramp up without committing to the other side of the bell curve... and that vendors have an issue with.

US culture has many faults. But our ability to admit fault (outside of a legal environment) helps us recover quickly and learn the lessons.

Lightsaber



I've posted how many times?!?
User currently offlineglideslope From United States of America, joined May 2004, 1593 posts, RR: 0
Reply 20, posted (11 months 3 days 21 hours ago) and read 11709 times:

Quoting PHX787 (Thread starter):
America could learn something about efficiency from Japan, in my opinion. Especially if they wanna prevent safety issues from happening.

While I agree with this to some degree, this issue is far to complicated to say it's simply the fault of one Partner/Country.

Companies need to push the limits. The regulatory agencies need to get into the 21st century, and understand what they are looking for.

There is no progress without risk. Much of todays issues are an incomplete understanding of the possible Risk Outcomes.

There is no question IMO, that Boeing assumed too much risk at launch (in unknown partnerships abroad.) However, make no mistake. They have Petabytes of information for the 789 and 777X.

Your Professor could turn the Nationalism down a tad as well. Just MO.   



To know your Enemy, you must become your Enemy.” Sun Tzu
User currently offlinebikerthai From United States of America, joined Apr 2010, 2007 posts, RR: 4
Reply 21, posted (11 months 3 days 21 hours ago) and read 11526 times:

Quoting PHX787 (Reply 11):
According to the anti-trust law they must only work with one (maybe 2 at the most) in order to comply.

Well, as with all laws, things may be more complex than it seems. I do not know whether your professor is right or wrong, However, in this and other case at Boeing, anti-trust do not necessarily drive the decision making.

Most of the internal checks that governs Boeing when dealing with more than one suppliers/contractors for the same product are the laws governing intellectual rights and proprietary information.

Boeing do have multiple suppliers (all over the world) for many products. Boeing do collaborate with many companies on competing designs. In these cases there are often separate teams working with the different companies. These teams are separated by firewalls that keep information proprietary to companies from reaching another.

Quoting PHX787 (Reply 11):
. Because they weren't able to do enough research and testing, the issues occurred.

Are you talking about Boeing not able to do enough research?

This is absolutely true. Boeing does not have enough money to do research on technology that they put on their airplane. They stick with their core competency and rely on industries for the rest.

There is one reason that Boeing have, in the past and into the present, chosen to go single sources for large subsystems. Cost.

Oops, I mean two. The other reason is proprietary/patent rights.

As with the 737 - GE/Smecna example (and perhaps the new 777X) choosing a single engine manufacturer allow Boeing to negotiate a single profit driven price with their engine partner, thus keeping the price down. In this case both company has an interest in keeping the price down to sell as many unit as possible. This only works in keeping the price down if there is an external competition as in the A320.

Asside:

Boeing being also a government contractor, is by law subject to anti-trust/anti competitiveness in another way.

All government contracts are subject to audits. If a single source supplier is selected, there must be written justification for making the item single source. Often it's a paperwork nuisance for minor parts and components, but it must be done. So at least for that part of their business, anti-trust laws forces them to look at more than one supplier.

bt



Intelligent seeks knowledge. Enlightened seeks wisdom.
User currently offlineaaron747 From Japan, joined Aug 2003, 7951 posts, RR: 26
Reply 22, posted (11 months 3 days 20 hours ago) and read 11224 times:

Quoting PHX787 (Thread starter):
This professor specializes in Japanese business practices and has extensively studied how the american system of management works.

That gives him about zero respect in my book. Most of the "top" professors I've known here are fine to have a beer with, but really have their heads up their a**es.

The problem with Japanese academics is they spend 95% of their time observing/analyzing and about 5% of their time doing. This is completely the opposite of what people who actually WORK in companies do.

One of the key elements of the Toyota Production System is the concept of "genchi genbutsu" (現地現物) - which basically means learn by DOING and seeing for yourself. Don't listen to this guy, seriously.

Quoting PHX787 (Thread starter):
For example, since part of the wing is built in Nagoya, that Nagoya company probably has 5 or 6 companies which all build the same component of the wing, which is then sent to Nagoya for wing construction and then

Not really. MHI is responsible for the main component manufacturing and assembly of the 787 wings. There are subassembly contractors for really particular things like actuators and flight controls, but every last structural component and assembly is done by MHI itself. I have personally walked the floor of their facility near here, but cannot share further details here.

Quoting PHX787 (Reply 11):
If such a formation occurs, as per Japan's system (which mind you brought Toyota to be the most profitable company in Asia

Toyota became the most profitable company in Asia by sheer bludgeoning of their supply chain. They pit competing suppliers against one another and cleverly use the rumor mill to get the sales marks where they want them. Talk to small component makers around Nagoya about how humiliating it can be to work with Toyota's purchasing department and you'll get the real scoop on how they keep those margins so high.

Quoting lightsaber (Reply 19):
But I do believe the HUGE lapses in regulatory oversight by the Japanese government forced them to 'find a target' and pushed the judgement call further/faster than typical.

Absolutely agree. If there's anything Japanese regulators are good at, it's making decisions at a glacial pace. That's what was most surprising about the whole affair.



If you need someone to blame / throw a rock in the air / you'll hit someone guilty
User currently offlineJAAlbert From United States of America, joined Jan 2006, 1491 posts, RR: 1
Reply 23, posted (11 months 3 days 20 hours ago) and read 11078 times:

The entire US manufacturing sector is deemed weak because Boeing and its suppliers designed and built a faulty battery? And it's all due to anti-trust laws? Please.

The disaster that has been the 787 production and roll out will be studied for years no doubt, but the problem lies with Boeing, not the rest of the country. And the part about Japanese firms having so much better practices - again, stop.

I recall Japan being very defensive when Toyotas were having the braking issue - many Japanese were expressing the opinion that the problem lay with American manufacturing rather than Japanese design and some wondered if Americans didn't intentionally sabotage the Toyotas to gain market share.

I take such comments as this professor with a grain of salt.


User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12061 posts, RR: 52
Reply 24, posted (11 months 3 days 20 hours ago) and read 10554 times:

Quoting PHX787 (Reply 11):
Obviously the 787 launch was extremely rocky. I don't think we can say that the 787 suffered "teething issues." I don't recall the A380, the 777, or other large aircraft having such a huge delay along with such immense problems as the Dreamliner. Don't get me wrong, I love this plane. It wouldn't be in my username if I didn't like it. But I really wish Boeing could have been able to do much more research, collaboration, and testing via multiple companies before the aircraft entered service or was certified by the US.

Your saying two opposites here. First your saying the B-787 launch and (3 year) delays were Boeing's fault (which most delays were). Then you are saying Boeing should have done more research before EIS. Many of the B-787 delays were because some parts needed redesign or further testing, so I think Boeing was doing research.

BTW, the A-380 launch to EIS was not so smooth, either. The A-380 delays amounted to almost two years, and a four month delay between the delivery of the first airplane and the second one delivered.

All three, the B-777, A-380, and B-787, first several airplanes delivered were over weight. But the B-777 had, by far, the smoothest launch to EIS period of the 3.

Quoting PHX787 (Reply 11):
He has been strongly against the policies that brought japan down during the 90s but no one really listened to him much. His ideals are pretty much the ideals that shaped Japan's emergence as a global economy throughout the 60s, 70s, and 80s. He also has advised some top government officials who are now working to bring Japan out of the hole they are in from the last 20 years. This guy's pretty qualified.

No sir, I grew up in the 1950s and 1960s, and watched what Japan did to the markets. They flooded the American market with cheap goods, some were good products, like their very small cars from Toyota and (then called) Datsun (now Nissan), and competed very well against the continuing falling quality of GM, Chrysler, Ford, and American Motors (which went out of business in the mid 1970s). But most of the Japanese products imported into the US was nothing but junk. Today, China is following the 1960s Japanese business model, except for cars. Japan's economy failure of the 1990s was a result of to many Japanese export companies not improving there product lines, the exception again was Toyota and Nissan. The Japanese economy could not sustain a high living standard for about half the country, which in the early 1990s was making boat loads of money, and cheap apartments in Tokyo selling (in the 1990s) for upwards of $1M USD.

Is this what your professor is advocating to returning to?

Japan tried to deceive the American public into buying products in the 1960s and 1970s by marketing some products as "MADE IN USA", because those products were made in a town called Usa, Ōita Prefecture, Japan.

But, in the last several years, Toyota has fallen way off of their previous quality, as proven by many very large and world wide and embarrassing recalls of their cars for anything from runaway accelerations, to brake problems. Yes, many of their cars are now built in the US, but the parts to assemble those cars still come from Japan.

So, how is Toyota trying to regain its reputation in the US and around the world? The CEO made a very public apology at a US Congressional Hearing about those recalls, and then launched very a slick advertising campaign to sell their cars and trucks, again.

In the meantime Nissan is trying to stay above water by recently lowering the price of their cars and trucks in the US. They are able to do this because of lower labor costs to make their parts in Japan. Only one model in their vehicle line-up is selling well, the Altima. But even South Korea's Kia and Hyundai vehicles quality match or exceed the quality of Toyota or Nissan.


Quoting PHX787 (Reply 11):
Boeing would not be allowed, according to Anti-trust laws, to risk-share, collaborate, or cooperate with any other battery supplier. According to the anti-trust law they must only work with one (maybe 2 at the most) in order to comply. This system is done to avoid the horizontal monopolies from being formed.

No sir. Just because the B-787 grounding was more publicly known than many of the Toyota recalls were does not mean Boeing cannot as its suppliers to share risks. Toyota has done it with its suppliers that provided parts that ended up in costly recalls, and has charged those suppliers for some of the costs of repairs. Boeing will, most likely do the same with Yuasa and Thales.


25 Stitch : Boeing follows lean production methodologies originally developed by Toyota, so perhaps the 787 shows the weakness of the Japanese production method?
26 NAV20 : Not 'proven' yet, but it's a pretty fair assumption that the battery problem arose from the use of only 10(?) big cells instead of many more small one
27 higherflyer : I hope you are not paying for this "education".
28 RDUDDJI : The title of this thread is extremely misleading. As others have said, you are completely wrong in your understanding of Anti-trust law. If you learne
29 Post contains images KELPkid : If anything, Boeing's single supplier philosophy as of late should be under the microsocope here...there was no law compelling Boeing to only use one
30 mt99 : Correct me if i am wrong - but the concept of "single supplier" is more of a Japanese concept isn't it? and it bases on the fact that companies "own"
31 KBJCpilot : I work for a Fortune 100 company that is based in Japan. Every one of our executives is Japanese and after 20+ years working for my company I have ne
32 Aesma : Anti-trust laws lead to what you describe as normal practice in your intro. It can also be normal practice in the US, for example IBM in the 80's had
33 Post contains images Stitch : I expect Boeing did not choose GS Yuasa on a lark, but instead selected them after performing due diligence of whomever are major suppliers of indust
34 NeutronStar73 : This has got to be one of the most ridiculous posts in the history of posting. Your argument , and that of your professor, fails on so many levels. 1
35 Post contains images BMI727 : So interventionism and continual stimulus then? That's the opposite of anti-trust laws. The professor sounds like a Japanese guy looking to blame shi
36 KC135TopBoom : PHX787, please don't think everyone here is jumping on you. I can only speak for myself and I feel you have gotten some bad information. If your profe
37 Roseflyer : I am trying to give your professor some credit, but either he doesn’t know that much about what he is talking about or there is a communication pro
38 twiga : How much time did your professor actually spend in the US in carrying out his extensive study of the american system of management? Or was the study
39 Cubsrule : The comparison to Toyota is also inapt because of volume. For a component that is needed once for each airplane, we are talking about ~100 units per
40 brucek : I used to work in manufacturing here in the SFO Bay Area (televsion engineering products), and the first thing we made sure was that we were not "sole
41 Kaiarahi : You keep on repeating this untruth, despite being corrected on at least 4 other threads. JL and NH grounded their own fleets, not the JAA. The JAA di
42 Stitch : Where anti-trust laws affect Boeing is that they are forbidden under said laws from owning an aerospace engine manufacturer nor are they allowed to ow
43 aaron747 : Not to get too hair-splitty, but the regulatory authority in these parts is the JCAB.
44 aklrno : One point that has been skipped so far in this thread (I think) is that when Boeing agrees to a risk-sharing contract where the vendor makes a signifi
45 mesaflyguy : Let's not bring personal opinions into this that may insult others.
46 brilondon : Yes, you should not listen to this professor of yours. I know what you are getting at but it is not anti-trust laws that are the problem. When I did
47 ikramerica : NH and JL grounding their fleets at the behest of the JCAB rather than the JCAB doing so directly is a cultural technicality. Not just that, but its J
48 Farzan : Knowing about your fascination for Japan through your many posts in several other threads, I noticed that you often use your "Japanese sources" and "
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