Why did boeing stop outsourcing

Boeing’s Decision to Stop Outsourcing: What It Means for Your Business

In recent years, outsourcing has become an increasingly popular way for businesses to cut costs and improve efficiency. However, in 2018, Boeing, a major aerospace company, announced that it would stop outsourcing certain manufacturing processes to its suppliers.

This news sparked controversy and confusion, leaving many to wonder why such a move would be made by such a successful company.

Why Did Boeing Stop Outsourcing?

Boeing’s decision to stop outsourcing was made in response to a series of setbacks and problems with its supply chain. The company faced criticism over delays in the production of the 737 MAX aircraft, which led to a global grounding of the plane and significant financial losses.

One of the main reasons for these delays was a lack of communication and coordination between Boeing and its suppliers. This led to misunderstandings and errors that ultimately delayed the delivery of critical parts needed for the production of the 737 MAX.

In addition to this, Boeing also faced criticism over the quality of the parts it received from its suppliers. There were reports of defects and other issues with the parts, which further compounded the problems with the supply chain.

Boeing’s response to these setbacks was to take a more hands-on approach to managing its supply chain. This included bringing certain manufacturing processes in-house, where it could have greater control over the production process and ensure that the quality of the parts met Boeing’s exacting standards.

The Pros and Cons of Outsourcing

Before we dive into why Boeing stopped outsourcing, let’s take a closer look at the pros and cons of outsourcing in general.

Pros:

• Cost savings: By outsourcing certain processes to suppliers, businesses can reduce their labor costs and other expenses associated with production. This can lead to significant cost savings over time.
• Improved efficiency: Outsourcing can help businesses improve their efficiency by allowing them to focus on their core competencies while leaving the more time-consuming or specialized tasks to their suppliers.
• Access to expertise: By working with suppliers that have specialized expertise in certain areas, businesses can gain access to a wider pool of talent and knowledge, which can help them stay ahead of the competition.

Cons:

• Quality control issues: When outsourcing certain processes to suppliers, quality control becomes more difficult to manage. This can lead to issues with the quality of the parts produced by the suppliers, which can ultimately impact the overall performance of the business.
• Communication and coordination challenges: When working with suppliers that are located in different geographic locations or have different cultural backgrounds, communication and coordination can become challenging. This can lead to misunderstandings, errors, and other issues that can impact the production process.
• Limited control over the production process: By outsourcing certain processes to suppliers, businesses may lose some degree of control over the production process. This can make it more difficult for them to ensure that their exacting standards are being met.

Outsourcing vs Insourcing: What’s Right for Your Business?

With these pros and cons in mind, let’s explore the differences between outsourcing and insourcing.

Outsourcing involves bringing certain processes or tasks to a third-party supplier, who then handles the production or service delivery. This can include anything from manufacturing parts to providing IT support.