Boeing’s 787 Dreamliner was designed to take advantage of new technology. By outsourcing the design and manufacture of key systems, Boeing was initially able to reduce development costs. But that financial victory was short-lived, as complications with parts and assemblies began to arise. A recent setback involving the failure of a Rolls-Royce engine has caused further delays to a project whose original delivery date was set for more than two years ago.

Boeing executives have admitted to poor oversight. Engineers say problems were “slow to be addressed by senior officials who often didn’t want to hear bad news.” Further disruptions derived from complications and spec changes that weren’t quickly and accurately communicated between Boeing and its suppliers and partners.

In response to these outsourcing dilemmas, Boeing is taking direct control of key partners. (Admittedly such acquisitions are not an option for most companies.) “Insourcing” of future work is also rumored. To address organizational deficiencies, Boeing has even hired a consulting firm to improve culture and communication. The goal of this, presumably, is for senior management to be better able to receive “bad news” and respond more quickly to any disruptions in development or manufacture.

Boeing’s story is a reminder that outsourcing needs to be viewed as an ongoing process, not just something that can be started and then forgotten. The benefits of outsourcing can only be realized if there exists good information, good lines of communication, active management of relationships, recognition of the complexities involved and a willingness to work at making the partnership succeed.

As far as insourcing goes, what do you think? Is Boeing an isolated case or is insourcing part of a new trend?

Lost in the Woods is an “if only…” story of a company that’s forced to scrap the big roll-out of an extremely promising product redesign when a critical component of the product can’t be sourced in time. Stunned by the loss of so many expected sales and accolades, the company is painfully reminded that true revision control takes more than a spreadsheet bill of materials (BOM) on a server and verbal engineering change notifications (ECNs)—and that even a single discrepancy in the version of the BOM that’s sent to a contract manufacturer (CM) can be disastrous.

Once again, it’s a quick, easy read and a good reminder of why all your hard work to ensure good revision control is worth the effort!

Every product company has a story–one that makes you cringe just thinking about it–where something went wrong…really, really wrong. A situation that could have been avoided if only….

At Arena we hear these stories all the time. They wrench our gut and remind us of the days when we worked in manufacturing.

We’ve taken these stories, yours and ours, changed the names, products and companies to protect the innocent, and retold them. The first one is posted in the new Arena Dispatches section of our website. It’s called Up in Smoke: The 3 things you need to know about managing product change.

Up in Smoke tells the story of a toy manufacturer trying to understand how its blockbuster franchise could literally go down in flames at the height of its popularity. It’s a cautionary tale about the perils of relying on spreadsheets and manual processes to manage bills of materials (BOMs), engineering change orders (ECOs) and the new product development (NPD) process.

Though it may bring back a painful memory or two, it’s also a quick, easy read, so check it out!

I’m sure most of you can name the big winners—like the iPod or the USB drive— but there are lessons to be learned from the losers. While 2002’s “wearable PC” was probably destined for failure from the outset, gadgets like the Garmin GPS phone sounded like a great idea, but were hurt by slow development. Announced in January 2008 and not released until late 2009, by the time the device was ready, it was already obsolete. “Garmin’s competitors in the GPS space, such as Navigon and TomTom, released apps that nimbly worked with the iPhone.” And the Garmin GPS phone was doomed.

The lesson? In the high-tech industry, change occurs rapidly, so product development has to be as streamlined as possible.