Question

1. Describe the operational risks/challenges/costs Boeing is facing as a result of their “extreme outsourcing” strategy?
2. What steps did Boeing take to mitigate some of its sourcing problems and why?  Are there downsides to this decision?

Answer 1

The risks of Outsourcing or as it’s here ‘extreme outsourcing’ is a big challenge for the business of Boeing. The product uses 40% of its components of the brand is outsources. The supply chain of such nature which is huge and so diverse may be a big problem for the business. The business recruited to outsource some Indian software engineers for its plane operations which was later been stolen by the company which made it. The outsourcing is been done to reduce costs and also make efficiency for the business in a competitive market to be cost-efficient.

However, to reduce the risk and challenges the business needs to do the following:

· Integrate the outsourcing from one or two sources is a solution for cost-saving.

· The program used for the flights are to be made and supervised by the business itself with a good deal of security from within so that it’s not stolen,

· The intellectual property rights of the day have to be maintained so that the business doesn’t lose the edge,

· The integration of the properties is to be kept at the location that is cost-effective for the business.

b.

The outsourcing’s damages can be mitigated with the best of decisions that have made the cost to be maintained but the operations are to be cost-friendly.

· The business has to take the operational aspects to be divided into a solution that is kept at a secure location.

· The intellectual property rights can be best kept with a good deal of security in the business with the best use of technology and protection of data.

· More automation to save cost and assembly line structures.

The downsides would be a temporary jump in the cost of production. The best of cost can’t be gained in the short term and the business has to make a new set up that keeps the intellectual properties and aspects of production in-house.