MAC Case Study: Lessons Learned from Airbus A380 and Boeing 787 Dreamliner Failure

This case study analyzes the failure of Airbus A380 and Boeing 787 Dreamliner and provides recommendations for Murasaki Aircraft Corporation (MAC) to avoid similar mistakes in their new project. It covers factors responsible for failure, analysis of key issues, and lessons learned.

[Year]
MAC Case Study
Boeing and airbus failure case study
ahmed choudhary

Contents
Introduction........................................................................................................... 1
Overview of MAC Project - 150..........................................................................1
Airbus A380 Case.................................................................................................. 1
Background........................................................................................................ 1
Factors responisble for airbus failure.................................................................2
Analysis of key issues......................................................................................... 2
how did airbus deal with project FAILURE?.........................................................3
Lesson Learned.................................................................................................. 3
Boeing 787 Dreamliner Case................................................................................. 4
Background........................................................................................................ 4
Factors that contributed to failure......................................................................4
Analysis of key issues......................................................................................... 5
Aftermath & dealing with project failure............................................................5
Lesson Learned.................................................................................................. 6
Recommendations for Murasaki Aircraft Corporation (MAC)..................................6
Conclusions........................................................................................................... 7
References............................................................................................................. 7

INTRODUCTION
OVERVIEW OF MAC PROJECT - 150
Japan Aircraft market has a new entry – MAC i.e. Murasaki Aircraft Corporation. The
company produces regional jets and also into providing Wings for Boeing’s 787. Apart from
this business, MAC is aiming at producing aircraft which should be lightweight by using
Dreamliner lightweight technology of Boeing’s 787. However, before starting with the new
project, MAC’s management needs to figure out the failure reasons of 787 and A380
aircrafts. This will help in studying and locating the issues which can be avoided from raising
in the new MAC project. Both projects shall be assessed as per the standard lifecycle of
project management i.e. initiation, planning, execution, monitoring and control. The
assessment of the two projects shall provide critical lessons which will be used to provide
recommendation to MAC. This will ensure that same mistakes should not be repeated by it.
MAC has various stakeholders possessing different roles and company’s ownership. It
includes Toyota Motor Corporation with 10% stake, Murasaki Heavy Industries (MHI) with
64% stake, Mitsubishi Corporation with 10% stake and Sumitomo Corporation and Mitsui &
Co with considerable smaller stakes.
AIRBUS A380 CASE
BACKGROUND
Airbus A380 is a French aircraft manufacturing company and their most popular offering A380
debuted in the year of 2007. By the year of 2008, Airbus added several more routes for their A380
line of Aircraft. Air France, Lufthansa, Emirates are the major customers of Airbus. Over 12 Aircrafts
was ordered by Emirates and furthermore, they had received orders from Virgin Atlantic, Qatar
Airways and Air France. The company, however faced several issues relating to production and
delivery of the Aircraft.
The project had involved development of the world’s first ‘triple-decker’ aircraft for the said long-
haul flight business and it challenged Boeing as it primarily was architect to carry over 35% extra
passengers while consuming 12% lesser fuel per seat, also weighing less overall and making use of
Glass-reinforced Fiber metal laminate. Also, it was supposed to be powered by Rolls-Royce Trent 900

or even Alliance GP7200 turbofan-based engines. The list price was set at around 347 Million USD.
The Aircraft was supposed to carry over 555 in separate seat classes as well as 850 in economy class.
FACTORS RESPONISBLE FOR AIRBUS FAILURE
Following are critical factors which contributed to the failure of AIRBUS:
 Impractical timelines – The deadline of the proposed project was impractical. MAC aimed at
finishing the project by 2006 when it started in 2000 itself. The project had thousands of
resources working across 16 sites from 4 different countries. Also, it intended to launch the
aircraft with advances technologies – with lightweight composition. A normal aircraft takes
around 5-6 years to get finished. But a new aircraft with such latest features can not be
launched in 6 years’ time.
 Limitations of Airbus – It was unable to deal with minor issues which were causing huge
delays and took 2 years more to complete.
 Resistance from engineers – The company was planning to use state-of-art computer
assisted technology to produce 3D models to launch project on time. But the engineers were
reluctant in using these models and preferred to use Computervision to produce 2D
blueprints. These older systems were very labor intensive. Even after the resistance,
company installed Catia and Circe which were very powerful modelling systems. However,
due to lack of buy-in support from engineers, the modelling tool turned out to causing
delays and cost-consuming.
 Incorrect calculations – This issue started in 2004 when 200 German mechanics found that
the required copper and aluminum wires were falling short. It resulted in miscalculations at
later stage which resulted in replacing all the wires from scratch. This entire process resulted
in causing considerable delays when company had only 6 months to launch.
 Design complexities – The project used 100,000 different wires around 330 miles aiming at
performing 1150 different functions. To check for harnesses of wires, Hamburg plan used
older version of CATIA but Toulouse used newer version of it. This led to compatibility issues
leading to incorrect design specifications resulting in wires failure fitting in the frame.
ANALYSIS OF KEY ISSUES
Airbus project has suffered major delays since its launch plan of 2005. The initial delays were due to
ineffective installation of 330 miles of wires in the British and French warehouses. The first Aircraft

was delivered to Singaporean Airlines in 2007. The original plan was for 2006, however the initial
project suffered significant delays and it was not until 2007 that the first 20 planes were delivered to
Emirates which was followed by 15 plans to Quantas (Dörfler & Baumann, 2014).
Even after the planes were being operational, it suffered some major hiccups in the beginning. For
instance, the Quantas A380 aircraft’s engine exploded after takeoff and it had to do an emergency
landing. In the year of 2011, another Quantas Aircraft took a major hit as it suffere oil problem. In
the subsequent year, the European Aviation Safety Agency carried out investigations that revealed
issues such as cracks in wing components as well as lack of grounding. The months following these
events were no exception as well.
In 2007, the company was only able to deliver less than half of what was promised out of the total
25 Aircrafts and this delivery delays, resulted in the reduction of share value by 26%. It also reduced
their earnings by 2 Billion Pounds (BBC, 2012).
HOW DID AIRBUS DEAL WITH PROJECT FAILURE?
Even after witnessing several issues in the dream project’s deliveries and deadlines, AirBus did not
stop. It rather announced a new plan. The key reasons behind the failure was the 2 years delayed
caused by the completion issues in production. It ended up in losing stakeholders and customer base
of Airbus. Along with this, the development cost of the project rose to $13 billion which cannot be
regained by the company any time before 2017. Company didn’t realize that demand of market lies
in the fuel-efficient jets rather than such huge aircraft. By the end of 2005, company could obtain
170 orders. On the other side, Boeing got 354 orders for its Dreamliner. Due to lack of sufficient
orders, the financial pressure started increasing which pushed Airbus to start cost-cutting program.
This in turn raise conflicts in negotiations with labors and suppliers.
LESSON LEARNED
Following are key lessons learnt from failure of Airbus case:
 Culture of the company plays an important role in success of a project.
 Technical issue can never be the main cause of project failure.
 The environment and culture of the project should be positive for success of the
project. It is governed by various factors – focus, risks management, conflict
management, open system focus and identity. Airbus was not able to manage
member identity and resolve conflicts.

BOEING 787 DREAMLINER CASE
BACKGROUND
The Dreamliner 1 was an ambitious project by Boeing and it began in the year of 2003. Its main goal
was to develop a fuel-efficient Jet which was developed out of composite material. After the
commercial launch of Dreamliner, it was considered as a success as it was rated as the highest in
efficiency with a 20% reduction in fuel savings, better in-flight experience, reduced maintenance
costs while also being over 15,000 to 20,000 kilos lighter. The company bagged over 500 Aircrafts
order within 3 years of it’s launch.
The product was successful, but the project was far from that. This was because, from the
management point of view, this project suffered massive delays, with increased loss of revenues,
loss of investor confidence, loss in market share, escalated costs among others. The initial 6 months
of delay costed the company greatly it was estimated at around 1 Billion USD while the revenues
suffered over 3.5 Billion USD. The cost and problems increased manifolds over the 3 years period
(Denning, 2013).
FACTORS THAT CONTRIBUTED TO FAILURE
The Dreamliner project was seen as a failure because of several reasons. First and foremost, the
company poured in more money in a hope to resolve the issue which weren’t resolved as it had
went beyond the management’s observation. Another 6 more delays were encountered and these
delays coupled with burgeoning cost resulted in the project failure. Apart from these, an additional
set of issues could be categorized under the following four heads:
Supply chain problems: The overall count of fasteners needed in the Dreamliner project were 80%
less and this meant lesser orders and revenue at the end of suppliers and this made them unhappy.
Thus, these deliveries were given low-priority by the suppliers. Apart from these, the design changes
bought into the newer Aircraft caused problems as the workers were untrained with respect to
these fasteners’ installation (Shenhar, et al., 2016).
Outsourcing Complexities: In order to cut cost and bring in manufacturing efficiency, the company
outsourced a large part of their manufacturing to third party companies reducing the Boeings’ role
to design and assembly. The company where these projects were outsourced were based in several
different regions and countries who further outsourced to other sub-contractors. As a result, the
quality of materials took a major hit as well as the project became presumably complex. Some of the

sub-components such as Brake Control Monitoring systems or BCMS suffered inherent issues.
(MarketLine , 2012).
High Cost of Development:
The initial development cost was considerably high because of inappropriate decision making at the
end of Boeing. The reasons being the role of Boeing as an integrator, reduction of risks by
outsourcing the project, availability of suppliers and willingness to invest in overall development.
Boeing also decided to use GSP based model.
Lack of competency: The company’s decision of playing a role of system integrator was not its
strongest suits. The Company chose to play a role of a system integrator which was not its core
competency. The current development project was not similar to those handled by Boeing in past as
the new project was more complex, had multilayered supply chain structure, and designing as well
as integration was majorly done by suppliers (Elahi, et al., 2014).
ANALYSIS OF KEY ISSUES
Major causes of Airbus project delays were due to:
• Multilayered supply chain structure involving several suppliers and all delivering at their own
speed.
• Complexities inherent to the project as the project involving several 3rd party companies
working in tandem to solve the issues.
• Software issues as some of the factories were using outdated software.
• Issues related to the management as they failed to keep their priorities in order wherein
their self-priorities took precedence.
Causes behind increase in the costs include:
• Lack of competency and training of workers resulting into an increased cost.
• Initial development costs have increased over the delay caused to the project.
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
The lessons that could be learned from the Boeing case include:
• Core competency should be identified as it allows to focus what is to be done and how it has
to be done.
• Using the existing core competency is always better than creating a new one altogether for a
new project.
• Development of new core competency may result in the reduction of existing core
competencies.
• If highly valued functions of any given project are outsourced or 3rd party dependent, then it
creates a kind of vendor lock-in.
RECOMMENDATIONS FOR MURASAKI AIRCRAFT
CORPORATION (MAC)
• MAC needs to identify their core competencies and only choose to outsource those activities
that are not core to the company.
• It is extremely crucial to gain buy-in from stakeholders and top-level management as it will
allow them to understand their responsibilities, give directions to the project and extend
their in-depth support to the project.
• The employees need to have sufficient training beforehand, if they don’t already before
beginning a new project.
• The system development should be an iterative based methodology as it needs to be
developed in several phases and then tested as well to rule out any bugs and inconsistencies
in the system.
• The selection of vendors and contractors has to be done systematically with a thorough
background and profile check. Their abilities and performance should be gauged and
measured before giving them such mission critical responsibilities.
• The company needs to have an extremely sound and in-depth requirement gathering
process at hand so that the project’s requirements can be gathered effectively. Based on
how effectively the requirement has been gathered, only then it can be fulfilled ultimately
meeting the needs and requirements of the stakeholders.

• If any minor issues occur during the project, the problem should be explored further and the
root level cause should be identified. It needs to be solved before advancing the project as it
could escalate into a large issue having a rollover effect and eventually sabotaging the
project’s deadline or eating up the budget allocated.
CONCLUSIONS
This report explored two different and major cases of Aircraft project failures and the cumulative
lessons from both. The lessons learned from these two cases would be used to improve upon the
existing frameworks and managerial process to be followed by MAC which is another Aircraft
manufacturer based in Japan. The core objective of the project is to not make the same mistakes as
they were done by the other Aircraft manufacturers. The issues faced by both of the Aircraft
manufacturers were detailed in the report, the problems and causes surrounding those problems
were explored in-depth and an analysis was performed in order to understand the reasons behind
those failures. Furthermore, this project provided some light on the overall lessons learned from
these two failures also shedding light on several recommendations for MAC. These include having a
core-competency, being careful with outsourcing activities, a system process of evaluating vendors
and contractors. It also included recommended in terms of making use of iterative methodology and
also having an in-depth requirement gathering process.
REFERENCES
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Available at: www.bbc.com/news/business-41773715
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Clarke, N., 2006. The Airbus saga: Crossed wires and a multibillion-euro delay - Business -
International Herald Tribune. [Online]
Available at: http://www.nytimes.com/2006/12/11/business/worldbusiness/11iht-
airbus.3860198.html
[Accessed 19 October 2018].
Denning, S., 2013. What went wrong at Boeing. Strategy & Leadership, pp. 36-41.
Dörfler, 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. 13–
28.

MarketLine , 2012. Boeing Case Study. The 787 Dreamliner.. [Online]
[Accessed 19 October 2018].
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, pp. 62–78.
Shore, B., 2009. Airbus 380. [Online]
Available at: http://globalprojectstrategy.com/lessons/case.php?id=23
[Accessed 19 October 2018].