If you used just one industry and product line to illustrate every aspect of OM in your course, it could easily be Boeing’s 737 and Airbus’ A320. From supply chain to outsourcing to quality/reliability to assembly lines, these competitors provide a plethora of OM examples.
Yesterday’s New York Times raises the topics of time -based competition and product enhancements (see Ch. 5). 
Boeing’s enhancements of the 737, introduced in 1967, have made the plane the largest selling commercial aircraft in history. Together with the A320, another narrow-body plane, the pair make up 3/4 of the fleets at the major airlines. There are more than 10,000 in service in the US and abroad.
Now the problem: airlines, facing $80/ barrel oil, want better fuel economy—and this hasn’t happened in the 737 and A320 in well over a decade. Airbus leans towards investing $1.5-$2 billion in new fuel-efficient engines–product enhancement. Boeing has announced it will hold off on new engines and instead create a new plane by 2020–product migration.
While dominating the market for commercial planes over the past 20 years, the 2 companies have loved leapfrogging each other with bold advances. But as demand for new planes bounces back from the recession, Boeing and Airbus are hamstrung by OM problems.
Boeing is 3 years late on its most important plane, the 787, made of lightweight carbon composites to slash fuel use. (And a fire on its test flight last week did nothing to help). Airbus is being hammered with the need to fix its superjumbo A380 after an engine blew up on a Qantas flight (see our blog on 11/10/10). And now new competitors from China, Russia, and Canada are entering the narrow body market. The newcomers will soon find that making quality planes is much harder than it might look.
Discussion questions:
1. What are the advantages and disadvantages of enhancement vs. migration for these 2 firms?
2. Why doesn’t Boeing jump right in the make a new jet to replace the 737?
3. What is China’s goal vis-a-vis the commercial jet industry?