Search
Wednesday 12 December 2018
  • :
  • :

Boeing’s Chase Strategy With ORM

Although Boeing’s employees are very involved and loyal, Boeing operates on a chase strategy. Employees are hired and laid off based on Boeing’s demand. Many employees express their job uncertainty online. This can turn into many bad reviews online on sites such as Glassdoor, Indeed, and other employee review sites. Having this chase strategy with and ORM strategy is very hard to pull off. For a while while the Dreamliner was being manufactured, Boeing could not do that. A chase strategy is defined by the following factors:

Produce as much as needed: Boeing produces planes as deals are made. Therefore, they do not see fit having the same number of employees on staff for different demand levels.

Zero inventory: There is little inventory at Boeing as they can only work on one or few aircrafts at a time. The holding costs are minimal as there are no variable costs of keeping items on hand; the items go immediately to the next step or are delivered to customers. These aircrafts are immediately distributed to partners like ANA. This is similar to pipeline inventory; the inventory is moving from point to point in a process.

As mentioned previously, Boeing purchased a new plant during the Dreamliner 787 production. However, the company did not purchase the in Seattle where there are already 80,000 workers. This was not only a logistical and financial mistake but a reputation mistake as well. When there are stakeholders on such a large scale, it is inevitable that you cannot please all of them. However, this was a very unfavourable decision by the majority and it resulted in people writing bad reviews, rebelling, and Boeing beginning to have a bad online reputation. Many accuse Boeing of purposely opening up the plant across the country to avoid more strikes from Boeing employees, taking jobs away from Seattle employees. Boeing employees have only striked and picketed five times in the past 30 years. The company put forth a motion to have their Seattle employees go back to work during the Dreamliner initial manufacturing. This strike was an additional internal failure cost incurred. Unfortunately, Boeing is still in arbitration today due to this plant opening.