Offshoring Case Study - Boeing & Russia

Boeing, one of the world's largest aerospace companies, partnered with Russia's United Aircraft Corporation to manufacture certain parts of its 787 Dreamliner aircraft in Russia. However, the offshoring move resulted in delays and quality control issues that led to significant production setbacks and increased costs. In this article, we'll explore some of the critical aspects that businesses should consider when engaging in offshoring, based on Boeing's failed offshoring example.

Assess the offshoring partner: When offshoring, it's critical to assess potential partners to ensure they have the necessary expertise and experience to deliver quality work. Boeing's partnership with United Aircraft Corporation was troubled from the start, with significant production delays and quality control issues that were not resolved in a timely manner.

Evaluate the business needs: Before considering offshoring, it's important to assess your business needs and determine which services can be effectively offshored. Boeing evaluated its manufacturing needs and determined that certain parts of its 787 Dreamliner aircraft could be manufactured in Russia. However, the offshoring move ultimately proved unsuccessful.

Plan for cultural differences: Offshoring often involves working with individuals from different cultures and backgrounds. It's important to plan for these differences and ensure that your offshoring partner has a strong understanding of your business culture and values. Boeing's partnership with United Aircraft Corporation was fraught with cultural differences, which led to communication breakdowns and quality control issues.

Consider data privacy and security: Offshoring often involves the transfer of sensitive data, so it's critical to ensure that your offshoring partner has appropriate data privacy and security measures in place. Boeing's partnership with United Aircraft Corporation raised concerns about the potential transfer of sensitive technology and intellectual property to Russia.

Develop a communication plan: Effective communication is critical to the success of any offshoring project. Boeing's partnership with United Aircraft Corporation was marred by communication breakdowns and delays, which contributed to the overall failure of the offshoring project.

Boeing's failed offshoring example demonstrates the importance of assessing offshoring partners, evaluating business needs, planning for cultural differences, considering data privacy and security, and developing a communication plan. By taking these steps, businesses can avoid the pitfalls of failed offshoring projects and ensure a successful outcome.