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View Diary: Boeing's outsourcing strategy in the spotlight as FAA grounds the Dreamliner (196 comments)

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  •  I Worked At Kodak (19+ / 0-)

    In the early days of digital photography and printing.  I was intimately involved in printer designs and support.  

    During that time, Kodak built all its digital color printers. They all had Kodak built parts, Kodak designs, and Kodak color algorithms.

    Then, it came time to save money --  to outsource printer building and printing technology.  Kodak outsourced to Japan and to China, the lower the bid the better.  The offshore vendors took over the designs, inserted their own algorithms, and would not reveal the new algorithms to Kodak engineers who had the responsibility to calibrate those printers and to make the media (ribbons and paper) used in them.

    And, now that Kodak has filed for bankruptcy, the offshore vendors (who haven't been completely paid for their prior work) will not cooperate to make ongoing improvements in the printers.

    It seems that offshore vendors (especially those in Japan) have no concept of the US bankruptcy law.  All they know is that they have not been paid, and they want no more to do with Kodak. So getting spare parts and engineering changes will be a very dicey business.

    It's no surprise that Kodak, the inventor of digital photography, is selling off all their camera and printer business, and their patents in a fire sale, and even their printing kiosk business.

    •  I was working in the medical division at this (5+ / 0-)
      Recommended by:
      snoopydawg, xaxnar, elwior, ladybug53, Just Bob

      time (Diagnostics group)...  I remember it well.  We were moved from the old building on the east side of Rochester to the new plant in Greece and we started development of the 5000 test/hr machine when we got the word we were up for sale.  Kodak would retain the test slides but sell off the test machine group.  I left about that time, but from what I heard Hitachi was looking in earnest at them.  

      I have no idea what eventually happened to that group.

      "Death is the winner in any war." - Nightwish/Imaginareum/Song of myself.

      by doingbusinessas on Fri Jan 18, 2013 at 09:27:26 AM PST

      [ Parent ]

    •  Kodak is bankrupt... (3+ / 0-)
      Recommended by:
      wader, BachFan, squarewheel

      ...because they were a film chemistry company in the time that digital cameras gutted and destroyed the film chemistry business. They were sort of like Microsoft that way; my understanding is that they kept trying to attach film items to their digital pictures business and simply did not grok the fact that digital was going to obsolete film chemistry almost in its entirety other than for specialized uses.

      I'm sure that the issues you describe didn't help, but...

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Fri Jan 18, 2013 at 09:36:13 AM PST

      [ Parent ]

      •  Well, yes to an extent (3+ / 0-)
        Recommended by:
        elwior, Just Bob, rbird

        Their copiers were a decent quality for awhile, but they lost a good deal of contracts to more nimble and capable rivals as their own products lost the edge and serviceability as their own interest in that space waned.  Then, they sold off most of that division just when they could have grown the digital publishing business rather handily, given their background and resources.

        They had a series of problems with leadership in the past twenty years, IMHO.

        http://nightowltrader.blogspot.com/...

        "So, please stay where you are. Don't move and don't panic. Don't take off your shoes! Jobs is on the way."

        by wader on Fri Jan 18, 2013 at 09:58:18 AM PST

        [ Parent ]

      •  Kodak blew it (5+ / 0-)
        Recommended by:
        ladybug53, la58, mmacdDE, Just Bob, rbird

        the sensors for the up scale cameras are or were Kodak. So management sold the licenses. Way to go MBA business pros.

        The US needs to adopt the old German mentality, we don't sell our companies to outsiders. They can buy the product but you don't sell the facilities. Or stop protecting the patents, once the name changes.

        •  The German Mentality also includes... (3+ / 0-)
          Recommended by:
          mmacdDE, rbird, hashby

          ...a philosophy of making the best product they can. It is ingrained in their culture. The point is to make the best thing - to market and profit from whatever you are making are separate functions of the company. The dictates of making the best product determine how marketing and design work. Those German companies which have strayed from this have failed (Braun)

          VW (which includes Audi), Porsche, BMW, Mercedes - You won't find a manager with influence at any of those top auto makers who would claim that the purpose of their company was to "maximize shareholder value". The purpose of their companies is to make the best vehicle possible in each of the segments they are active in.  

          As others here have implied, Boeing has already jumped the shark. In a way, they were trying to emulate the EADS model - but they failed to understand that communication between, say, Italy and France is a far different thing from communication between Italy and Japan. THe differences are both cultural and physical. You can pop over to Italy from France to fix a budding problem differently and more conveniently than you can travel between Italy and Japan and the US. I'm sure managers think: "Hmm, I've got these modern communications..." Sorry. Hands on project management is still essential - cultural alignment is essential when trying to coordinate between different (out)sources of different parts of your project.

          I've been following the Dreamliner since it was first presented to the public - it must be some 10 years or more now. Lufthansa employees laughed at the concept - the attempt to "mirror" the EADS model - which was born of EU necessity (all those egos and coffers to fill). Boeing had problems from the very fist deliveries.  Their incompetent management did nothing. They are still having some of the same problems they did at the beginning of the establishment of the assembly process.

          This is a US corporate failure. Board-level bullshit -  everything is SNAFU, so no worries, ey?

      •  I don't think that's entirely accurate (0+ / 0-)

        they made a very big push into CCDs, but couldn't quite seem to make a business of it.

        I'm sure that in part you're right - they just couldn't let go of film, but I think they tried.

        big badda boom : GRB 090423

        by squarewheel on Fri Jan 18, 2013 at 08:34:59 PM PST

        [ Parent ]

      •  and by the way (0+ / 0-)

        they made very good ,very high quality CCDs which might have been the problem.

        since it was not mass market they simply couldn't make enough money to sustain the business.

        big badda boom : GRB 090423

        by squarewheel on Fri Jan 18, 2013 at 08:36:54 PM PST

        [ Parent ]

    •  US corporations have forgotten (5+ / 0-)
      Recommended by:
      a2nite, mmacdDE, Just Bob, midwesterner, rbird

      how to be really competitive.  They're so accustomed to a favorable business environment here in the US where they have no real competition and lots of protection in the courts.  

      They naively believe that foreign corporations will play by the same rules. They don't. They're much more cutthroat and feel no need to honor US laws. Why should they?

      Our corporate leaders have gotten fat and lazy.  That they're now being exploited by the same foreign companies they stupidly outsourced everything to is not surprising.  

      Perhaps they'll learn some important lessons. Or not.

      Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

      by Betty Pinson on Fri Jan 18, 2013 at 01:53:44 PM PST

      [ Parent ]

      •  Really it is more about showing quarterly (0+ / 0-)

        earnings that is killing the US corporations more than anything else.  They are sort of in perpetual fire sale mode trying to impress Wall Street.

        They do things like launch new products in order to impress investors whilst ignoring core business that keep the companies going and end up losing it all.  

        One of the great examples of the short-sightedness of current business models with respect to labor was Circuit City.  That retailer was doing really well and their success against competitors was attributed to the fact that they had a knowledgeable and experienced sales force.  The people selling and their high level of competence was considered to be a real driver in their sales numbers.  Then the CEO and the board decided to fire every one of their experienced (and more expensive) sales force and replace them with cheap and inexperienced sales people.  I think it was less than 24 months before the company was in trouble and eventually they went bankrupt.  

        People make a difference.  Experience and qualifications make a difference.  In the case of Circuit City we weren't even talking about people actually designing and building what they were selling.  

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