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Updated Sunday, February 3, 2013 at 02:03 PM

Boeing 787’s problems blamed on outsourcing, lack of oversight

By Dominic Gates
Seattle Times Aerospace Reporter

Boeing’s 787 Dreamliner has suffered numerous electrical system flaws beyond the battery problems that led to its current grounding, according to engineers with knowledge of the situation.

Company engineers blame the 787’s outsourced supply chain, saying that poor quality components are coming from subcontractors that have operated largely out of Boeing’s view.

“The risk to the company is not this battery, even though this is really bad right now,” said one 787 electrical engineer, who asked not to be identified. “The real problem is the power panels.”

Unlike earlier Boeing jets, he said, the innards of the 787 power distribution panels — which control the flow of electricity to the plane’s many systems — are “like Radio Shack,” with parts that are “cheap, plastic and prone to failure.”

Any malfunction in a major system, such as the power panel fault that caused a United 787 flight to divert to New Orleans in December, must be reported to the Federal Aviation Administration (FAA), though the data is not public.

Another engineer said the number of such faults reported for the Dreamliner is roughly on par with those on Boeing’s previous new jet, the 777, but “on the 787, one big difference is, there’s a preponderance of electrical faults.”

A senior Boeing engineer not directly involved with the 787 said he believes the company’s early delegation of control on 787 outsourcing to multiple tiers of suppliers is now coming back to bite the jet program, though it made belated efforts to tighten up oversight of suppliers.

“The supplier management organization (at Boeing) didn’t have diddly-squat in terms of engineering capability when they sourced all that work,” he said.

Boeing spokesman Marc Birtel declined to answer specific questions for this story, citing the shortage of time, but denied that Boeing’s oversight of its 787 suppliers was insufficient.

“Our standards and expectations for design, production, quality, and performance have always been, and remain today, as high on the 787 as they are on any other commercial program,” Birtel said.

Outsourcing gone awry

Boeing faces an indefinite grounding of the Dreamliner because of a battery fire on a 787 in Boston and the smoldering of another battery on a flight in Japan a week later.

A National Transportation Safety Board update on Friday said an investigator will travel to a manufacturer in France to examine a battery contactor, which connects a wiring bundle from the airplane to the battery.

Since the battery and its monitoring system were made in Japan, and all the connected pieces were integrated by French company Thales, blaming outsourcing for that and other electrical system faults is a reflexive response among Puget Sound-area employees and observers.

Yet Boeing has never made batteries, and the electrical systems on all its jets have always been sourced from outside suppliers, just like the engines and the landing gear. In that respect, the 787 is not different from Boeing jets like the 777 and the 737, both renowned for their reliability.

However, what is very different on the 787 is the structure of the outsourcing.

On the Dreamliner, Boeing contracted with a top tier of about 50 suppliers, handing them complete control of the design of their piece of the plane.

Those major partners had to make the upfront investment, share the risk and own their design. Each was responsible for managing its own subcontractors.

“For the 787, they changed the structure” of the supply chain, said Christopher Tang, professor of business administration at the UCLA Anderson School of Management and lead author of a much-cited 2009 case study of outsourcing on the 787. “You only know what’s going on with your tier 1 supplier. You have no visibility, no coordination, no real understanding of how all the pieces fit together.

“With a brand new design and so many parts and so many players, it’s a major challenge,” Tang said. “Can the management team trace all the way down the tree to every single supplier and unit? That’s really difficult.”

On the United flight in December, a short circuit and electrical arcing were caused by a fault in a module that controls a generator and plugs into the power panel motherboard.

Tiny sparking

That sparking inside the circuit boards was tiny — Boeing vice president Mike Sinnettdescribed it in an interview last month as “a low-energy arc that lasted milliseconds, very small”— and produced no real risk to passenger safety.

But it caused the cockpit instruments to indicate that one of the plane’s six generators was down. And though the plane’s multiple alternate power systems easily handled that, the pilot diverted out of caution.

Following that in-flight problem, United in late December reported continuing “sporadic issues with our 787 generators and power distribution panels.”

Sinnett said last month that, “While we don’t have the specific exact root cause, the issues have all been traced back to a single lot of (circuit) boards manufactured at one time by a subtier supplier.”

Three years before the 787 was even launched, a paper presented internally at Boeing in 2001 by eminent airplane structures engineer John Hart-Smith predicted the problems that would arise from excessive outsourcing.

Now retired and living in Australia, Hart-Smith said that he is not an electrical systems expert but trusts Boeing’s technical experts in the systems group — “I know a few of them very well” — to resolve the latest battery problem.

Nevertheless, he said, the underlying conclusions of his outsourcing paper still apply.

On the 787, he said, Boeing management thought it could outsource risk and responsibility along with most of the work.

That’s not possible, he said, because when something goes wrong with a critical component from a supplier, “It’s Boeing that the FAA holds responsible to resolve the problem, and it’s Boeing that pays most of the associated costs.”

Outsourcing specs

Traditionally, he said, Boeing’s in-house experts created detailed specifications for every part of the plane made by suppliers, and had the in-house technical capability to closely monitor whether the work came up to spec.

“They needed complete knowledge of what was going on,” said Hart-Smith. “I warned that if they outsourced too much work, the day would eventually come when there wouldn’t be enough in-house capability to even write the specs.”

The senior Boeing engineer with indirect knowledge of the battery and electrical system troubles believes that’s what happened.

“Internally, we may not have the engineering horsepower required to understand the depths of the (battery system) problem as quickly as we prefer,” he said. “We let too much capability slip away from us.”

Nevertheless, he remains optimistic that the 787 program can be turned around.

Of the battery problem, he said, “We’ll get it fixed. That’s what Boeing does. We bet the company on our products. This is no different.”

He said he doesn’t believe the engineering union, set to vote this month to authorize a strike, will go out in the midst of the 787 crisis.

“Nobody is going to do any striking until we get this airplane fixed,” he said.

This engineer also said that management recognized the shortfall in supplier oversight a couple of years ago and has staffed up its supplier management organization since then.

Boeing spokesman Birtel echoed that.

“We have a significant effort under way with our suppliers to address reliability issues ... (and) help reduce the frequency of parts replacements,” Birtel said.

On a conference call last week, Boeing chief executive Jim McNerney said the company is “making progress” on strengthening supplier oversight.

“We have done a lot to increase the visibility down through our supply chain,” he said.

“As to our quality flow down through our supply chain, we have very robust processes,” McNerney added. “And if we miss something along the way, we’re going to fix it. But we do of course rely on our partners.”

The Boeing engineer with direct knowledge of the electrical systems is not optimistic.

“We talk to supplier management all the time,” he said. “These parts are such bad quality.”

To catch and eliminate minor system faults that he blames on persistent problems with the quality of parts, Boeing has routinely been flying nine or 10 pre-delivery flights of each 787 before it hands the plane over to a customer, he said.

On its other jets, Boeing typically makes just two pre-delivery flights, one by Boeing, then one by the customer.

Battery-system probe

The current crisis on the 787 is due to a serious electrical problem somewhere in the battery system.

Before that, in 2010, a major disaster was narrowly averted when an electrical panel shorted and a severe fire broke out on a 787 test flight.

Boeing says the specific issue that caused the 2010 short “was identified and resolved” before the plane went into passenger service.

Compared with those problems, the recurrent power panel faults that occurred last year — Boeing said there were at least four incidents — didn’t pose anything close to the same safety risk. When that United flight diverted to New Orleans in December, passengers suffered only a major inconvenience.

But the 787 electrical engineer said that when the battery problem is resolved and the Dreamliners fly again, more power panel problems will likely surface, and could lead to more diversions that would further damage the jet’s reputation.

“To the public, it’s still electrical,” he said.

He said the company has been to focused on individual, narrow fixes.

“We have not done a real redesign,” he said. “We should be examining the entire electrical system.”

Dominic Gates: 206-464-2963 or dgates@seattletimes.com


Ken Lambert / The Seattle Times
On the Dreamliner, seen here at the Everett widebody jet plant, Boeing contracted with a top tier of about 50 suppliers in all, handing them complete control of the design of their piece of the plane, including the electrical system.




Mike Siegel / The Seattle Times
Boeing faces an indefinite ground-ing of the Dreamliner because of a battery fire on a 787 in Boston and the smolder-ing of another battery on a flight in Japan a week later.




Manuel Balce Ceneta / The Associated Press
National Transportation Safety Board members examine parts of the disassembled battery taken from the Japan Airlines Boeing 787 Dreamliner that caught fire Jan. 7 at Logan International Airport in Boston.




Stephan Savoia / The Associated Press
A Boston Fire Department chief looks into the cargo hold of a Japan Airlines Boeing 787 just after the Jan. 7 fire.








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