Tag: quality

Teaching Tip: Why Quality Inspections Often Fail

We all know that students have trouble staying focused for a long lecture, even with the great job we all try to do. So try to find a short activity that will make a teaching point, break up the class for a few minutes, and get all the students enthused.  Here is something you may want to try in Chapter 6, Managing Quality. It takes about 10 minutes.

In this chapter, we have suggested that building quality into a process and its people is difficult. In the old days, inspection was the main form of quality control. But inspection may not catch all the errors, and it may be expensive. To indicate just how difficult inspections can be, ask your students to turn to the OM in Action box on page 234, called “Inspecting the Boeing 787”.

Ask them to each count the number of E’s (both cap and lower case), including those in the title. This should be a pretty easy inspection job, I think, and I offer a crisp $10 bill to the first student to give me the correct count. That usually gets their attention!

As they each finish, I ask them to shout out their count and I do a tally on the board. There is amazing variation and I only have to shell out the reward in maybe one out of five classes. The answer, by the way, is in the Instructor’s Solutions Manual, as discussion question #18.

If you can share a class exercise of your own, we would be very happy to publish it as a Guest Post.

Guest Post: Quality Management in Services

Prof. Howard Weiss, retired from Temple U., shares his thoughts monthly.

A recent issue of The Philadelphia Inquirer presented two compelling examples of quality management—or, more accurately, lapses in quality management—within the service sector. These cases illustrate the difficulty of applying quality principles to both healthcare and transportation.

Virtua Hospital. Two newborn infants were mistakenly brought to the wrong mothers. Each mother breastfed the wrong child before the error was discovered. The nurse who identified and reported the mistake to her supervisors was subsequently terminated. Hospital administrators justified the dismissal by claiming the nurse had failed to check infant ID bands at the beginning of her shift. The nurse stated she had never been informed of such a policy.

Your Heizer/Render/Munson text notes in Chapter 6 there should be “Employee empowerment: When employees see a problem, they are trained to take care of it.” This nurse did take care of the problem. Reporting it should have led to continuous improvement in the ward rather than her being fired. The result of firing an employee who reports a problem will mean that fewer employees will report problems. This, of course, undermines quality improvement.

Philadelphia International Airport (PHL).  PHL ranked last in customer satisfaction among the 27 Large airports that serve 10-33 million passengers per year–the 5th consecutive year it was at the bottom of the rankings.


Chapter 6 notes that “The personal component of services is more difficult to measure than the quality of the tangible component.” Nevertheless, J.D. Power evaluates airports on a range of specific, measurable factors including facilities, services, and customer experiences.

Management of PHL is fully aware of the airport’s shortcomings and has taken steps to improve by adding new bathrooms, new restaurants and a customer service training program. Plans are also underway to improve the rail platforms, seating, carpeting and roadway signage. However, these improvements will not fix the major problem. The airport is too small and too old and there is no room to expand it. One other factor to consider is that unlike with products, the passengers at PHL may not have other choices for which airport to use.

Classroom discussion questions
1. Does your employer encourage the reporting of problems/ mistakes?
2. Why might passengers at PHL not have other options? (Hint-check out American Airlines).

Guest Post: Merging OM Tradition with Digital Innovation

Dr J. Prince Vijai is Assistant Professor of Operations Management at IBS Hyderabad, in India.

The transition from traditional OM to digital operations is not a replacement but an evolution. Digital tools enhance the classical OM framework by adding intelligence, speed and adaptability.

1. Process Optimization and Automation In classical OM, process optimization involved detailed mapping and iterative improvements. With digital operations, AI can now identify inefficiencies, simulate improvements and automate decision-making without human intervention. Siemens has integrated sensors, cloud platforms and AI to create a digital thread across product design, manufacturing and logistics resulting in a 20% reduction in production time and a 30% reduction in energy consumption.

2. Inventory and Supply Chain Management Traditional inventory models rely on forecasts and safety stock assumptions. Digital operations use real-time data from IoT sensors and machine learning to predict demand, monitor inventory levels and automate replenishment. For instance, Walmart uses AI and IoT to streamline its vast supply chain, reducing stockouts and improving shelf availability.

3. Forecasting and Scheduling Operations managers have long used statistical tools for forecasting. Digital operations use advanced analytics and machine learning to provide more accurate, dynamic forecasts. Real-time analytics enables organizations to quickly adapt to market changes, weather disruptions or supply chain breakdowns.

4. Quality Management Traditional quality management emphasizes inspection and control charts. Digital quality management integrates data from machines, sensors and customer feedback for continuous, real-time quality assurance. Predictive maintenance, enabled by digital twins and IoT, reduces downtime and improves asset reliability. For example, GE developed digital twins to monitor the performance of jet engines in real time, enabling predictive maintenance and reducing unexpected failures.

The shift to digital operations is not without challenges. Employees accustomed to traditional processes may resist adopting new technologies. Data from different departments or legacy systems can be siloed, limiting visibility and coordination. Implementing AI, IoT and automation involves significant expenses. And digital operations increase exposure to cyber risks.  

Future trends include:

  • Hyperautomation that combines  AI and machine learning to automate increasingly complex tasks.
  • Cognitive operations that use AI not just to automate but to learn and adapt continuously.
  • Edge computing that enables data processing closer to the source (e.g., in factories or stores) for faster insights.
  • Green operations that leverage digital tools to track carbon footprints and support sustainable practices.

Embracing the synergy between OM and digital operations is a strategic imperative for long-term success.

OM in the News: Ford Breaks Record—Of Safety Recalls

Ford has recorded more safety recalls in the first six months of 2025 than any car company ever has in an entire calendar year, reports The Wall Street Journal (July 12-13, 2025).

Ford just recalled 850,000 pickup trucks and SUVs because of a potential fuel-pump failure. A bad fuel pump could result in the engine stalling while a driver is operating the vehicle.

Last month, the firm said it would need to fix  200,000 all-electric Mustang Mach-E SUVs after receiving complaints from the government about customers being unable to open their doors as a result of the vehicle’s 12-volt battery dying, including cases where children were trapped inside. “There was no way for me to get inside my car without jumper cables,” a driver in Houston wrote in an April complaint. The person had to call emergency services and break into the car.

Also this year, Ford said it would need to fix nearly half a million 2016-2017 Explorer SUVs to prevent door trim from falling off. The issue was potentially creating a road hazard for other drivers.

In January  of 2025, Ford paid $65 million to the government as part of a settlement over violations of auto-safety laws, specifically over a delayed recall of 600,000 vehicles with defective rearview cameras. As part of the agreement, the automaker said it would spend an additional $45 million to improve internal systems for tracking safety issues.

Ford and its CEO  have staked out improving quality as a priority for the automaker. Improving quality will also help to reduce the billions of dollars Ford spends every year on warranty claims and safety recalls. The company hired a quality czar in 2022, and it has tied 70% of executive annual bonuses to quality. It said it has significantly improved product quality in recent years, with four new models winning accolades from a recent J.D. Power study on quality. The company has more than doubled its team of safety and technical experts and expanded testing on critical systems, such as vehicle powertrains, steering and braking.

Overall, recalls across the auto industry have been rising, with more than 1,000 recorded in 2024, compared with 800 a decade earlier.

Classroom discussion questions:

  1. What quality tools in Chapter 6 of your Heizer/Render/Munson text could Ford employ to decrease defects?
  2. Discuss Figure 17.1 in the context of Ford’s problems.

Guest Post: The Dangerous State of Air Traffic Control in the U.S.

Temple U. Professor Misty Blessley brings up a very timely OM issue-air safety.

Newark Liberty International Airport (EWR) has recently experienced multiple air traffic control outages, during which radar and communication systems used to track aircraft temporarily went offline. These disruptions have lasted up to 90 seconds in several incidents. Flights into and out of EWR have decreased by approximately 35% as a result.

When an outage occurs, air traffic controllers may issue a ground stop, essentially a pause in departures, similar to a real-life game of “red light, green light”—for planes awaiting take off. While Module D of your Heizer/Render/Munson textbook introduces queuing theory, the real-
time queues at EWR are available here. In practice, incoming planes may be directed into holding patterns that resemble stacked racetracks in the sky.

However, when radar and communication systems go dark, there’s no safe way to guide aircraft into these stacks or maintain proper separation. Once communication is restored, controllers must work through the resulting queues to safely sequence and clear aircraft for landing. Outages lead to flight delays and cancellations while also raising serious safety concerns. How can the skies be stabilized?

Modernize Technology – Many Federal Aviation Administration (FAA) systems still rely on outdated technology, including some that operate on decades-old hardware such as floppy disks. The federal government is actively working to modernize these systems by investing in updated
software, hardware, and communication networks.

Support and Expand the Workforce – During the recent incidents at EWR, some air traffic controllers have taken trauma leave, underscoring the high-stress nature of the profession. The U.S. has been facing a persistent shortage of qualified air traffic controllers, due in part to limited training capacity—currently, only one FAA facility is responsible for training controllers. With low acceptance rates and rigorous requirements, meeting demand has been challenging. However, efforts are underway, including the involvement of new schools, to expand training opportunities and help grow the workforce.

Classroom discussion questions:
1. In Ch. 17, Maintenance and Reliability is discussed and Ch. 6 covers Managing Quality. What lessons can be applied to make the skies safer?
2. What domino effects are likely to ensue once the plane has safely landed? What do you think can be done to attract more air traffic controllers?

OM in the News: What are Boeing’s “Shadow Factories”?

Boeing is promising this year to get its jet production to precrisis levels and chip away at a growing backlog of orders. First, the manufacturer needs to clear out the dozens of planes in its shadow factories, reports The Wall Street Journal (Feb. 15-16, 2025). A shadow factory is what Boeing executives call a production line where engineers and mechanics work on fixing, maintaining or updating aircraft instead of building new ones. They exist for the company’s two-bestselling models, the 737 MAX and 787 Dreamliner.

As Boeing is struggling to hire and train enough machinists, the shadow factories can occupy some of the company’s most experienced workers. In some cases, Boeing spends more hours inspecting and reworking planes than it did to produce them in the first place. “It seems like 30% of everybody’s job is fixing something that’s bad quality or late product or something that shouldn’t have happened,” said the CEO.

It isn’t the first time Boeing has pledged to solve its shadow-factory problem. The company had initially vowed to be rid of it by the end of 2024, but clearing out the planes has proven vexing. The biggest chunk are MAXs parked at a facility in Moses Lake, Wash. They are mainly remnants of a global grounding of MAX jets following a pair of fatal crashes in 2018 and 2019. Boeing continued making the planes even though airlines weren’t taking them, and is still working to deliver them. Another couple of dozen are 787s sitting in Everett, Wash., awaiting checks to ensure parts of the planes are properly pieced together following quality questions raised years ago around the jet’s production process.

A year ago, Boeing estimated it had about 225 jets in the shadow factories.  Not only do the planes take up space and tie up billions in much-needed revenue, they require sophisticated care and reworking, which means some of the company’s most skilled machinists are charged with fixing defective jets.

Any time a model requires an update or repair—a common occurrence in machinery as complicated as a jetliner—crews must do the relevant work on every unfinished plane. In 2023, for instance, the company had to repair around 160 737s in the shadow factory after misdrilled holes were found in the fuselage of a completed jet.

Classroom discussion questions:

  1. Why is a shadow factory an unwise operations tool?
  2. What has happened at Boeing in recent years to cause such quality problems?

MyOMLab: Simulation Updates for Fall 2024

We want to let you know that our five simulations, which students really enjoy, have gotten these valuable enhancements. If you are not using them, checkout the features. The five are: supply chain management, quality management, forecasting, inventory management, and project management.

OM in the News: Boeing Has Trouble Finding a Big Parking Lot

“Boeing has a parking problem,” writes The Wall Street Journal (July 22, 2024).  Parts shortages and other issues have left the jet maker with about 200 fully or mostly finished airplanes sitting in airfields, outside plants and in an employee parking lot.  Some of the planes are awaiting interiors; others need engines. Dozens more are awaiting delivery to China.

Unable to fly, the planes aren’t delivering much-needed cash as Boeing burns through more than $1 billion a month.

Unable to fly, the planes present a host of logistical challenges. Planes sitting around too long may need software or other updates. Moving unfinished jets is tricky, especially if the part they are missing is the engine, as is the case with a handful of 777 freighters.

The predicament comes as the jet maker grapples with production slowdowns and regulatory scrutiny in the wake of January’s near catastrophe on an Alaska Airlines flight. Boeing has delivered 175 planes through June of this year, compared with 266 through the first half of 2023.

This isn’t the most dire parking predicament Boeing has faced in recent years. Following the grounding of Boeing’s bestselling 737 MAX due to crashes in 2018 and 2019, the company had about 450 of those planes stashed in its facilities. At another point, it had more than 100 787s parked, which presents a space conundrum given the planes’ size. Currently, there are 10-15 787s awaiting inspections to ensure the planes are built to specification. The company added that step several years ago after employees raised concerns about potential production issues.

“This creates constraints,” one industry expert said. “There is a cost and an operational penalty. It’s something you really want to avoid as much as possible.”  Today, more than half of the parked planes are single-aisle 737 MAX’s still awaiting delivery, some of which are now several years old.

The company says it hasn’t become so tight on space that it has to stop or slow production—what is referred to in the aerospace industry as being “jiglocked.” Supplier shortages, lingering from the supply-chain crisis born amid the pandemic, have saddled the company with planes short of parts.  Shipments of the 787 model have slowed as Boeing grapples with a shortage of cabin seating. Seat suppliers industrywide haven’t been able to keep up with demand for cabin premium offerings, amid material shortages and certification delays.

Classroom discussion questions:

  1. What are the main OM issues facing Boeing today?
  2. Boeing has faced quality issues with its fuselages. What has it recently done to solve this problem?

OM Podcast #20: Manufacturing and Operations at Nautique Boats

In our latest podcast Barry speaks with VP of Operations at Nautique, Kris Hanigosky, about operations for this luxury ski boat manufacturer (known for its iconic Ski Nautique). They discuss maintaining the highest levels of quality, the importance of accuracy in forecasting and inventory management, and innovative approaches to employee retention through upskilling.

 

 

Did you know our podcast is now available on Apple podcasts? Just go to your Apple podcasts app, search “Heizer Render OM Podcast,” and subscribe to get all our podcasts on your mobile device as soon as they come out!

Transcript

A Word document of this podcast will download by clicking the word Transcript above.

Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM. See our earlier blog post with a recording of author and user Chuck Munson to learn how to find these, or contact your Pearson rep to learn more! https://www.pearson.com/en-us/help-and-support/contact-us/find-a-rep.html

OM in the News: Southwest and Boeing’s Problems Collide

Southwest Airlines is pulling out of some airports and cutting costs as it grapples with delays of new Boeing planes dim its prospects for the year, reports The Wall Street Journal (April 26, 2024). Southwest said it now expects to receive just 20 new Boeing planes this year— well below the 79 total 737 MAX deliveries it had expected.

Southwest, which flies only Boeing planes, is exposed to the manufacturer’s struggles.

The delays will thwart Southwest’s growth ambitions this year, damping revenue and leaving it overstaffed and on the hook for higher costs. The firm had already said it would stop bringing on more pilots and flight attendants as it adjusts to the jet delivery setbacks. Hiring is virtually frozen.

Under pressure to get a handle on quality problems, Boeing is building fewer of its 737 MAX jets—something that has complicated plans for several carriers. The slow down comes as it faces increased scrutiny from the FAA and Justice Department. Boeing shipped just 17 MAX jets in February, eight fewer than in January and half as many as it delivered in November and December.

Southwest, which flies only Boeing planes, is one of the hardest-hit airlines. It is closing its operations at four airports: Cozumel in Mexico; Bellingham in Wash.: Syracuse, N.Y.; and Houston’s Bush.  Southwest rarely exits airports and hasn’t done so since 2019, when it dropped its struggling operation in Newark, N.J., from its route map during a previous grounding of the MAX. It also plans to “significantly restructure” other markets, including slashing flight numbers at Atlanta and Chicago’s O’Hare Airport.

“I won’t downplay the challenges from the Boeing issues—they’re a big deal,” said Southwest’s CEO. “Redoing schedules and staffing forecasts is a costly effort that pulls people away from their work and creates a significant financial drag.”

United Airlines also lost money in the first part of the year because of the grounding of the 737 MAX after the January Alaska door-plug incident.  UAL is pausing pilot hiring for two months and hunting for new planes from Boeing rival Airbus to fill the gap. And Alaska Air said its plans for the year are also in flux as a result of uncertainty on Boeing deliveries.

Classroom discussion questions:

  1. What options do airline operations managers have when delivery of new planes are delayed?
  2. Why doesn’t Southwest spread its supply chain risks by splitting new plane orders? (Refer to Figure 2.8 in your Heizer/Render/Munson text).

OM in the News: Dealing with Manufacturing Quality Issues

“Imagine a world in which every product that leaves a factory is flawless, every time,” writes The Wall Street Journal (March 18, 2024).  What sounds like a plant manager’s dream is the end goal of zero-defect manufacturing, a term coined by Philip Crosby (and noted in Table 6.1 on page 217). Surging recalls have cast a harsh light on the quality of American manufacturing. But some companies say a combination of technology, training and focus can eliminate errors.

At Schneider Electric, employees are encouraged to speak up about product quality, anonymously if desired.

Ford’s CEO has said the automaker must reach “a zero defect destination,” and that the company has used assembly-line AI and extensive test drives to catch problems in its trucks. Stellantis, which is similarly targeting zero defects, said more than 100 new quality standards have led to a double-digit percentage drop in auto warranty claims. Companies in industries as varied as pharmaceuticals and snack foods have also announced zero-defect goals.

More manufacturers say they are aiming for perfection as quality-control problems have mounted. In 2022, auto makers spent record amounts on warranty claims. Recalls hit a six-year high in 2023, and jumped last year among pharmaceutical and food manufacturers. Undertrained workers, the increasing complexity of products and more sprawling supply chains were contributing to quality problems.

The zero-defects philosophy took shape in the early 1960s when defense contractor Martin-Marietta sought to eliminate errors from Pershing missiles. It had relied on inspections to find problems as small as a loose valve but refocused on prevention, exhorting workers with posters and rallies to do their jobs right the first time—followed by extensive audits. Errors at Martin plunged as hundreds of employees racked up long streaks of perfection. One worker made 500,000 solder connections without a mistake, while another put together 50,000 defect-free assemblies.

While quality programs helped U.S. companies improve their products considerably in the 1980s and 1990s, the effort stalled when businesses began outsourcing much of their work to low-cost regions.

This cost of poor quality can equate to at least 10% of sales once all factors, including the time spent dealing with problems, are taken into account. Human error is a perennial cause of defects, but it can be taken out of manufacturing systems. A machine can be built so it is impossible to load a tool backward, or an adhesive dispenser designed so it shuts off when it runs dry.

Classroom discussion questions:

  1. Why do we write in Chapter 6 that “quality cannot be inspected” into a product?
  2. How do “zero defects” and “six-sigma ” compare?

OM in the News: Behind Boeing’s Alaska Blowout

Just last week, we posted the story of Boeing’s intended takeover of its troubled fuselage provider, Spirit AeroSystems. Today’s post is a story of quality control at Boeing. You will recall that a door blew off an Alaska Airlines flight in January because a few bolts were not properly installed. Months before the 737 piece blew out midflight, the plane spent nearly three weeks shuffling down an assembly line with faulty rivets.

Traveled work—when work is completed out of the production line’s ordinary sequence—is a problem of Boeing’s safety culture.

In turns out that workers had spotted the bad parts almost immediately after the plane’s fuselage arrived at the factory from Spirit, reports The Wall Street Journal (March 12, 2024) . But they didn’t make the fix right away and the 737 continued on to the next workstation. (See the Chapter 9 photo on page 383 illustrating the assembly line process). When crews completed the repair 19 days later, they failed to replace four critical bolts on a plug door they had opened to do the job, leading to the accident.

At Boeing, there is a term for situations when work is completed out of the production line’s ordinary sequence: traveled work. This practice of completing work out of sequence is a liability when it comes to airplane quality. “The folks on the line, they know what it is,” Boeing CEO said. “It creates opportunities for failure.”  Yet, four years ago, Boeing laid out 5 values central to improving safety. Number 3 on the list: eliminate traveled work.

Doing work out of order complicates the intricate, taxing process of putting together an airplane. In the 737 factory, each plane moves its way through a series of stations, where crews are tasked with completing certain tasks. Those stations are equipped with tooling, platforms and crews trained to do the jobs designated for the site. Planes advance to the next station every 24 hours. Keeping production lines moving even when certain parts aren’t available for a given job helps avoid costly slowdowns.

When a missing part prevents workers from finishing, the plane still moves ahead and the part gets added or repair is completed somewhere down the line. Sometimes, the work isn’t done until the plane leaves the factory.  But the proper tooling may not be on hand there, leaving workers moving back and forth to get the necessary equipment.

Classroom discussion questions:

  1. As the new OM head of the 737 line, what is your recommendation?
  2. Can an assembly line like this be stopped?

OM in the News: AI in Manufacturing

Manufacturers are increasingly evaluating and adopting AI solutions to leverage their data, writes Industry Week (Feb. 13, 2024). Here are some key areas that stood out in how manufacturers are adopting the technology:

Quality control enhancement: AI can improve manufacturing quality control through vision systems trained on images and videos, accurately detecting complex product defects. Real-time monitoring identifies issues promptly to prevent future defects, and AI’s continuous learning enhances defect detection.  (See Ch. 6)

Supply chain visibility: Manufacturers deal with enormous amounts of data in their operations, and the integration of AI technology allows real-time observation, quicker trend identification and more accurate forecasting to meet demand effectively. AI algorithms analyze historical sales data, market trends and external factors, enabling more precise demand forecasts and aligning production and inventory levels. In logistics, AI optimizes routes by analyzing transportation costs, delivery times and traffic patterns, enhancing efficiency and cost-effectiveness. The strategic use of AI in the supply chain offers benefits like improved visibility, increased agility and better planning, enhancing overall resiliency and responsiveness. (See Ch. 11)

Energy efficiency and resource utilization: Companies are using AI to optimize energy consumption and resource utilization in manufacturing processes. These capabilities analyze real-time data from sensors, production equipment and other sources to identify patterns and trends in energy usage. This can inform predictive recommendations to optimize energy consumption, reduce waste and enhance overall resource efficiency. (See Supp. 5)

Predictive maintenance improvement: The use of AI in predictive maintenance enables a shift from reactive to proactive strategies, leveraging data-driven approaches. AI algorithms analyze real-time data to predict maintenance needs and failures. AI identifies patterns on the factory floor, detecting anomalies and potential malfunctions. This proactive approach minimizes unplanned downtime, extends equipment lifespan and allows manufacturers to optimize resource allocation through scheduled service activities during planned downtime, enhancing overall productivity and reducing costs. (See Ch. 17)

The use of AI in manufacturing operations in coming years is expected to accelerate. Investment in AI technologies is forecast to rise among 96% of companies by 2030.

Classroom discussion questions:

  1. How will AI become a common tool for operations managers?
  2. Using a search engine, describe a real company example for these applications.

 

OM in the News: Is Allegiant Really One of America’s Best Airlines?

Perhaps surprising to students and professors who fly a lot, Allegiant Air took 3rd in The Wall Street Journal’s (Feb. 8. 2024) annual airline scorecard, which ranks nine major carriers on their operational performance.

It’s the highest finish for the Las Vegas-based no-frills airline. The smallest carrier in the rankings scored well in the categories of (1) fewest mishandled bags, (2) fewest cancellations and (3) fewest passengers involuntarily denied boarding.

Flying Allegiant does mean accepting limitations. Some routes are only available twice a week. If there is a cancellation, travelers could be stuck for days. It charges a host of fees for add-ons—picking a seat assignment, bringing a carry-on bag or even ordering a premium beverage. But Allegiant only flies nonstop, meaning fliers can avoid annoying layovers that increase the chances of a trip gone wrong.

Allegiant has grown more reliable. In 2022, it canceled 4.25% of its flights, the most of any airline in the WSJ rankings, and fewer than 2/3 of its flights arrived on time. It finished 5th overall in that 2022 rankings. In 2023, the airline canceled less than 1% of its flights and improved its on-time arrival percentage to 72.8%—10 points up from the year before. (Allegiant still finished 6th of 9 carriers for on-time arrivals.)

So what are its operation management advantages? First, Allegiant flew its planes for about 7.5 hours per day in 2023, hours less than Spirit and Frontier, which are its low-budget competitors. That relative infrequency gives Allegiant more time to recover if things do go wrong. Second, Allegiant flies less than Frontier and Spirit. It had 115,500 flights scheduled in 2023—60% of Frontier’s total and 38% of Spirit’s. Third, unlike Spirit and Frontier, Allegiant doesn’t oversell its flights, so it didn’t bump a single passenger last year. It also placed first in baggage.

Allegiant placed 5th in complaints in the rankings. It says it plans to add more self-service tools so customers can make changes on their own, as well as add more precise callback features. Allegiant had a higher rate of delayed flights than the larger airlines because of the infrequency of its routes and the fact that it frequents smaller airports. The airline says it would rather delay flights than cancel them.

Classroom discussion questions:

  1. From an OM perspective, what is Allegiant doing well? Why?
  2. How can it improve its perceived quality?

OM in the News: An Inside Look at Boeing’s Outsourcing Mess

The site of this month’s midair door-plug blowout on this Boeing 737 is behind the wing, outlined in red

Long before the harrowing Alaska Airlines blowout this month, there were concerns within Boeing about the way it was building its planes. Like so many other manufacturers, Boeing was outsourcing more and more of the components.

Much modern manufacturing, of course, includes outsourcing, our topic in Chapter 2. From hot tubs to iPhones, machines are built in small pieces by different companies, then delivered to another factory for final assembly. The system has sliced costs from the process by letting production lines maximize output and eliminate waste. But the strategy also stretches oversight and adds risks, since the final product is only as good as the least-good supplier, writes The Wall Street Journal  (Jan. 13-14, 2024).

A Boeing engineer distributed a controversial report in 2001 warning of the risks of its subcontracting strategy, especially if Boeing didn’t provide sufficient on-site quality and technical support to its suppliers.  “The performance of the prime manufacturer can never exceed the capabilities of the least proficient of the suppliers. These costs do not vanish merely because the work itself is out-of-sight,” he wrote.

But Boeing doubled down on outsourcing in the 2000s with its 787, which was the first jet that was heavily designed by suppliers. To lower costs and risks of a new design, Boeing authorized dozens of suppliers to design and build major sections of the 787 (see text page 30), including mostly completed fuselage sections.

Now, Boeing is reckoning with the fallout from this strategy. Dozens of factories build key pieces of 737 and 787 models to be assembled by Boeing. One of the major subcontractors is Spirit Aerosystems, the sole supplier of the fuselages used in 737s and 787s. Spirit is heavily dependent on Boeing for revenue, and the two companies have often battled over costs and quality issues. The earlier 737 MAX grounding and pandemic sapped Spirit’s finances, and the company slashed thousands of jobs, leaving it short-handed and with inexperienced workers when demand recently bounced back.

Spirit employees said production problems are common and internal complaints about quality are ignored. In a given month, at a production rate of 2 fuselages a day, there are 10 million holes that need to be filled with some combination of bolts, fasteners and rivets. The result: a factory under pressure where workers rush to meet unrealistic quotas and where pointing out problems is discouraged if not punished. Increasingly, Spirit workers say, planes have been leaving the factory with “undetected defects.”

Classroom discussion questions:

  1. What are the advantages and disadvantages of outsourcing?
  2. What are Boeing’s options vis a vis Spirit?