The Boeing 737 MAX Decision of Profit or Security

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Introduction

In 2018 and 2019, Boeing 737 MAX passenger jets, Lion Air, Indonesia, and Ethiopian Airlines, Ethiopia, crashed seconds after takeoff, killing over 300 people. Following the second accident, all 737 MAX jets were grounded globally. The U.S. House of Representatives investigation implicated the technology for computerized controlling flights, known as Maneuvering Characteristics Augmentation System’ (MCAS), for both disasters (Herkert et al., 2020). MCAS is a novel software program designed to correct for differences in the dimensions and locations of the Boeing 737 MAX (Herkert et al., 2020). MCAS was unintentionally activated on both planes since a faulty angle of attack (AOA) sensor relayed inaccurate signals regarding the flight’s nose position (Herkert et al., 2020). Pilots were not informed of the technology’s installation until after the first accident.

Essentially, MCAS was developed to avoid a stall caused by engine realignment. Despite the horrific accident, pilots were not mandated to undertake replication training on the 737 MAX. The tragedies cost the Boeing Company billions of dollars in fatalities and hundreds of lives and crew tragically. Nevertheless, the intricacy and instability of the new program did not stop Boeing executives (Cusumano, 2020). This analysis aims to show that when organizations prioritize profits over safety, they can make bad decisions that jeopardize both their operations and consumers, leading to serious ramifications.

Strategic Operations Management Decisions

Planned Operational Management considerations are critical to a manufacturing company’s long-term performance. Mainly, its goal is to identify and oversee the manufacturing procedure from its first phases of development to the last (de Sousa Jabbour et al., 2019). Boeing manufactures both civilian and military aircraft and is one of the biggest aviation companies in the world, with hundreds of thousands of people as their employees globally in more than a hundred countries (Cusumano, 2020). Boeing has devised stringent measures and inspection strategies for its products to ensure authenticity and reliability. Regrettably, Boeing missed the point from the start when it conceptualized the architecture for the Boeing 737 MAX-8 and then failed to conform to several strategic judgments.

Design of Goods and Services

Boeing aimed to build an airplane that would set itself apart from other planes by having a unique design that appealed to both aesthetics and ground-breaking technological achievements. This is consistent with the design of goods and services aspect, which involves searching for ways to achieve resource, cost, and quality uniformity throughout all business departments (Heizer et al., 2019). Accordingly, the firm sought to retrofit an older jet, the 737NG “Next Generation,” with a bigger, more fuel-efficient engine (Cusumano, 2020). Boeing was countering the stiff rivalry from the Airbus Company along with responding to requests of their clients towards the production of more cost-effective and fuel-sufficient jets.

However, the improved engines had a major impact on the stability of the older jets as well as the angle pitch. Turman (2020) asserts that Boeing’s first mistake was that instead of redesigning the plane, the company installed MCAS, which was borrowed from other older aircraft. The objective was for the MCAS software to allow the 737 MAX to emulate the functional capabilities of the 737NG model by lowering the aircraft’s anterior section if sensors detected increasing nose elevation (Cusumano, 2020). However, as noted by many findings on the two crashes, this was not the originally planned design for the program. According to Ragheb (2019), the initial MCAS design had two exterior AOA sensors mounted on every side of the plane. Nevertheless, these sensors were different since one was expensive and complex while the other was cheap and simpler. These sensors were adopted into the final design as they were, nonetheless. Further, engineers who were in charge of the design development continuously added more power to the MCAS to push the nose even lower.

However, the engineers proceeded without their modifications, without adjusting the safety parameters and precautions, which significantly impacted the prerequisite for carrying out the rest of the O.M. decisions. Ragheb (2019) believes that these issues could have been avoided if Boeing had built a new plane from scratch. Consistently, Cusumano (2020) argues that the company may have been blinded by its great vision; hence it assumed that it would cover the needs and meet the design requirement of the final aircraft. Moreover, interviews with “safety analysis” specialists working on the 737 MAX revealed that perhaps the MCAS was not the optimal answer to such a severe problem but that the adoption was much too late in the design process (Turman, 2020). Although Boeing was right to respond to Airbus’s growing threat, Schmuck (2021) believes that the company moved forward aggressively without conducting due diligence. The consequences of poor design of goods and services can be fatal (Heizer et al., 2019). Indeed, the final design failed to satisfy Boeing’s operational requirements; hence the two planes crashed to the ground when the MCAS system failed.

Managing Quality

Quality management describes the organization’s ability to determine the customers’ expectations and then satisfy them. Heizer et al. (2019) state that to effectively evaluate and meet client needs, management should conduct market research and batch quality control tests on goods and services in manufacturing. Evidently, Boeing failed to meet this critical decision-making aspect. Bhattacharya & Nisha (2020) report that Boeing CEO Dennis Millenburg’s aim to enhance profits with the 737 MAX in a few years was an “ambitious goal” that did not actualize. The business first estimated that it would build roughly 5,000 pieces of this airplane (approximately 52 airplanes per month). (Bhattacharya & Nisha, 2020). However, Boeing was forced to adjust its figures by reducing its projected production capacity following the Ethiopian crash.

Undoubtedly, it is challenging to manage quality and guarantee consistency in products and services, but organizations must meet customer needs. In their findings, Cruz and de Oliveira Dias (2020) point out that the 737-max incidents signified a lack of quality and consistency in the firm’s products and services, consequently causing customers to lose confidence and faith in them. According to Kuczynski et al. (2021), the result of losing customers’ trust is decreased revenue for an organization; wherein Boeing’s case, the business incurred 5.6-billion-dollar damage between April and June following the grounding of 737-max. This loss came after the company was forced to suspend the operations of the 737-max. Thus, Boeing’s failure to manage quality proves that money should not come before producing safe and quality products and services.

Process and Capacity Design

A business’ production targets must be supported by processes and capacity that are effective and competent. Heizer et al. (2019) opine that production yields should sustain the demand for products and services. Boeing opted to develop a new 737 series with equivalent super-efficient fuel engines to prevent losing next-generation single-aisle airplane orders to Airbus. However, Boeing engineers pushed engine nacelles even further out and upwards than the past generation engines to accommodate these new bigger diameter engines (Johnston & Harris, 2019). Boeing engineers clearly decided to cut corners with the process and capacity design decisions. In their research, Serrano et al. (2019) found that AOA sensor breakdowns are rather prevalent in aerospace. Thus, several things can cause disasters, including improper cleaning, icing, bird strikes, damage from contact with a jetway, and maintenance mistakes.

Some scholars have also claimed that apart from implementing a single AOA sensor, the company did not meet critical industry standards. For example, Herkert et al. (2020) note that Boeing offered unnecessary electrical and signal networks with fail-safe architecture frameworks. This may have contributed to many single-point-of-failure routes in the ill-fated flights control mechanisms (Herkert et al., 2020). Boeing offers various cockpit safety equipment, including an AOA display, as additional-cost, high-priced alternatives. For this reason, Robison (2021) argues that many low-cost carriers do not purchase these options. Boeing’s process and capacity design practice remain a ticking time bomb by locking out many carriers from purchasing additional crucial safety equipment. Thus, one way or another, similar accidents were bound to happen. Consistently, Kuczynski et al. (2021) determined that Boeing made cost-cutting design changes without appropriate discussion, consultation, and agreement from the carriers and FAA. Collaboration leads to enhanced partnerships and decisions, but seclusion leads to conflict and erroneous or harmful judgments.

Layout Strategy/Human Resources and Job Design

The 737 MAX was designed and manufactured without uncertainty by highly skilled engineers and necessary employees. Nonetheless, the degree of capability with which these two teams operated is being questioned. For instance, Johnston & Harris (2019) claim that several workers have told the press that such catastrophic events may have been avoided if more sensors had been fitted on the aircraft. Ansell et al. (2021) also note an apparent lack of effective communication in the organization, as the whole work team seemed to imply that none of them was aware that the aircraft was equipped with just one detector. Englehardt et al. (2021) also reiterate that the company’s decision to transfer its headquarters from Seattle to Chicago created a distance between the company leadership and its engineers. Seattle was an essential part of the company since most aircraft were designed, assembled, and tested before being sold for any use, whether commercial or private (Ansell et al., 2021). The move caused a rift between the firm’s leadership and technical team, with the latter working only on the 737 series.

Relocating to Chicago was primarily tactical to separate management from technical teams. The move was meant to show investors that the company was diversifying, hence attracting more people to invest. Likewise, Turman (2020) claims that Boeing chose not to train afresh 737 aircraft pilots claiming that they were already experienced since the two aircraft were more or less the same. The corporation even offered a $1 million refund per aircraft if more training was shown to be required (Turman, 2020). Nonetheless, even before the first catastrophe, it was evident that the 737 series was a flight hazard. On the contrary, Boeing continued to blame the mishaps on the pilots after the two disasters.

Supply Chain and Inventory Management

The accidents forced Boeing to limit the quantity of 737 MAX planes being produced. Boeing has over 600 distributors, many of whom depend on their vendors to offer different goods and services. The compensation proposed by Indonesian airline Lion Air to the relatives of the 2018 crash victims includes a list of over 900 firms (Robison, 2021). Although the 737 MAX is produced in the company’s main plant in Washington, USA, major parts are manufactured in facilities all over the globe and completed at Boeing’s Renton, Washington plant.

Alongside many vendors, the Federal Aviation Administration (FAA) is an essential part of the Boeing 737 MAX supply chain. The FAA is the government agency in charge of private and commercial aircraft oversight and licensing (MacArthur, 2020). It guarantees that the airplanes are airworthy in the interests of the multitudes of people that travel throughout the world. Boeing’s primary and secondary clients are also included in the supply chain. All partners in this weakly tied supply chain are autonomous but interdependent; they have shared aims of enjoyable, inexpensive, and safe flights. However, MacArthur (2020) suggests that each has its motivations that are not entirely connected with the commonly known. There is no centralized leadership, and direct operations and participation are discretionary. In contrast, global supply chain management requires collaboration to reach a common goal.

Scheduling and Maintenance

The Boeing Company published a paper in 2015 alleging that MCAS was prone to sensor failure. The external sensor was prone to bird damage, and maintenance and calibration problems obviated its use (Cusumano, 2020). In 2018 the company produced a memo that revealed that the pilots had less than four seconds to realize that the sensors had failed and less than ten seconds to correct the failure, which was practically impossible. Additionally, it was determined that the day before the second disaster, a worker had replaced a defective sensor, obviating (Cusumano, 2020). Lion Air pilots were never notified of the extent of the damage sustained in the last flight’s near-crash. The preceding flight’s near-disaster was averted with the assistance of a third pilot who was aware of MCAS and happened to be in the cockpit.

The Seattle Times published an article detailing how pilots with the 737 MAX got official training in what can only be defined as an improper action. It was surprising that prospective pilots of such complicated planes will merely train on iPads (de Sousa Jabbour et al., 2019). Allegations claimed that the corporation trained the pilots of the new aircraft on iPads and only for a few hours. The Canadian minister of transport went ahead and requested comprehensive and proper training of the pilots and not just simulator sessions (de Sousa Jabbour et al., 2019). The company did not take any action, which resulted in claims that the training would delay the already set service date of the new aircraft.

Furthermore, the Times cited “expense” as to why Boeing had no plan of honoring the Canadian minister’s request. Although the business had planned intermediate and short-term timetables, the 737 MAX grounding has placed them on hold (Ragheb, 2019). The client’s expectations were not satisfied because the function of the 737 MAX was to transport its passengers on board securely from one location to another. Companies that had placed orders for this airplane were almost certainly canceled due to its extended suspension. There will be no maintenance costs because all 737 MAX airliners have been ruled unfit for flight.

Summary

One of the most important things learned from the Boeing Company saga is that even companies with great reputations are susceptible to rivalry pressures which eventually put their clients in harm’s way. In attaining wealth and fast growth, these companies may end up building unreliable machinery that is likely to cause unseen fatalities, all in the name of maximizing profits. It goes beyond the slightest imagination that aircraft and automobile manufacturers would deliberately disregard essential factors during the manufacturing process in the name of competition and profits. The government should develop regulations and external quality assurance procedures to ensure that any machinery meant for the public is safe for use before it is released.

The secret of success in a catastrophe is to make the right decision early and to express it as plainly as possible. A call for extra cautiousness is in order seeing that the world has entered a period where technology is so advanced that even regulations are easily manipulated. The government has to initiate programs and train their officers from all sectors like; pharmaceuticals, food and beverages, banking, and automobiles. Internal quality assurance should not always be trusted; hence, external officers should frequently make surprise rounds at corporation headquarters. Although faster and cheaper products are much preferred, they have proven to be catastrophic in the long run.

Conclusion

Technological advancements in air travel have enabled humans to move from one location to another in short periods. However, these technologies are not devoid of technical flaws and challenges, as illustrated by the 737 MAX tragedies. For the time being, the Boeing 737 MAX-8 will not be a part of this project. It will be a part of any aircraft due to its disregard for well-prepared Strategic Operations Management Decisions. The poor planning and aggressive restorations of the Boeing aircraft by the engineers are blamed for the “fatal defects” caused by the 737 MAX crash. Without a doubt, someone made a mistake when they decided to remove one of the sensors from the aircraft, leaving it with only one. The MCAs were also designed to be completely dependent on the sensors hence dooming the plane to crash in case the sensors failed.

The engineers responsible for the design made a grave mistake when they disregarded the time frames between when the sensors failed and the time left for the pilots to restore balance to the plane. It was dangerous to believe the aircraft was set to fly; Boeing’s numerous bad judgments have had a negative impact on the lives of individuals who are closely associated with the firm today. The failure of the 737 MAX aircraft dealt a hefty blow to the air transport sector in the sense that many people pulled to road and water transport. Investors also became reluctant in Boeing investing for fear of incurring further losses. Many have left the company as it struggles to redeem itself from its already damaged reputation. Overall, almost all businesses that focus on addressing client issues in the most inventive way make a profit. Profit-driven businesses have a tendency to go wrong and Boeing’s poor implementation of the ten strategic decisions in operations management and the subsequent 737 MAX accidents is irrefutable proof.

References

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Bhattacharya, S., & Nisha, Y. (2020). A case study on Boeing’s 737 MAX crisis on account of leadership failure. International Journal of Research in Engineering, Science and Management, 3(9), 116-118. Web.

Cruz, B. S., & de Oliveira Dias, M. (2020). Crashed Boeing 737-max: Fatalities or malpractice? Global Scientific Journal, 8(1), 2615-2624. Web.

Cusumano, M. A. (2020). Boeing’s 737 MAX: A failure of management, not just technology. Communications of the ACM, 64(1), 22-25. Web.

de Sousa Jabbour, A. B. L., Luiz, J. V. R., Luiz, O. R., Jabbour, C. J. C., Ndubisi, N. O., de Oliveira, J. H. C., & Junior, F. H. (2019). Circular economy business models and operations management. Journal of Cleaner Production, 235, 1525-1539. Web.

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Heizer, J., Render, B., & Munson, C. (2020). Operations management: Sustainability and supply chain management. Pearson

Herkert, J., Borenstein, J., & Miller, K. (2020). The Boeing 737 MAX: Lessons for engineering ethics. Science and Engineering Ethics, 26(6), 2957-2974. Web.

Johnston, P., & Harris, R. (2019). The Boeing 737 MAX saga: Lessons for software organizations. Software Quality Professional, 21(3), 4-12. Web.

Kuczynski, J., Wang, C., Glass, M., & Hoffman, F. (2021). Boeing 737 MAX: A case study of failure in a supply chain using a system of a systems framework. Issues in Information Systems, 22(1). Web.

MacArthur, J. B. (2020). Cost savings versus redundant systems: The case of the Boeing 737 MAX debacle. Journal of Business and Accounting, 13(1), 4-21. Web.

Ragheb, M. (2019). Fault tree analysis and alternative configurations of Angle of Attack (AOA) sensors as part of Maneuvering Characteristics Augmentation System (MCAS). Web.

Robison, P. (2021). Flying blind: The 737 MAX tragedy and the fall of Boeing. Doubleday

Schmuck, R. (2021). Global supply chain quality integration strategies and the case of the Boeing 787 Dreamliner development. Procedia Manufacturing, 54, 88-94. Web.

Serrano, D., Ren, M., Qureshi, A. J., & Ghaemi, S. (2019). Effect of disk angle-of-attack on the aerodynamic performance of small propellers. Aerospace Science and Technology, 92, 901-914. Web.

Turman, A. L. (2020). Clear of conflict? Examining FAA certification and conflict preemption in light of the 737 Max. Houston Law Review, 58, 721. Web.

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BusinessEssay. 2023. "The Boeing 737 MAX Decision of Profit or Security." January 10, 2023. https://business-essay.com/the-boeing-737-max-decision-of-profit-or-security/.

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BusinessEssay. "The Boeing 737 MAX Decision of Profit or Security." January 10, 2023. https://business-essay.com/the-boeing-737-max-decision-of-profit-or-security/.