Boeing's mistakes are lessons to learn from, maybe SOX conflicts with Quality

Chris Crosby writes a post on Boeing's three bid process which meets SOX compliance contributed to the 787 problems.

The Folly of the Three-Bid Model: A Thesis on How SOX Grounded a Dream

I just read about about another emergency landing for a 787 Dreamliner in Japan. Apparently, they have grounded them all. I don’t know about you, but I will find it pretty hard to set foot on one of these flying Rube Goldberg contraptions. The Dreamliner name seems to be somewhat on track from a naming perspective; however, I think Nightmare-liner would have been a little more accurate. The product from Boeing has been horribly late to market, had an incredible amount of publicly reported issues through design to production (just imagine how many issues weren’t leaked to the public), encountered union issues during the build, was way over budget, etc.

In Chris's post he makes the point that a three bid process will show you meet SOX compliance, but this flies in the face of what Quality expert Deming recommends.

In the 1982 book Out of the Crisis, Dr. W. Edwards Deming highlighted point number 4 of his 14-principles of management is as follows: “End the practice of awarding business on the basis of a price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.” Total Quality Management (as well as the supremacy of the Japanese car manufacturers in the late 70s, 80s and 90s) came from Dr. Deming. His principles are the foundation for programs like Total Quality Management and Six Sigma. He theories turned into reality helped to solve the paradox of Low Cost and High Quality. Here’s an example of the impact of Deming, courtesy of Wikipedia:

In the 1980s, Ford Motor Company was simultaneously manufacturing a car model with transmissions made in Japan and the United States. Soon after the car model was on the market, Ford customers were requesting the model with Japanese transmission over the US-made transmission, and they were willing to wait for the Japanese model. As both transmissions were made to the same specifications, Ford engineers could not understand the customer preference for the model with Japanese transmission. Finally, Ford engineers decided to take apart the two different transmissions. The American-made car parts were all within specified tolerance levels. On the other hand, the Japanese car parts were virtually identical to each other, and much closer to the nominal values for the parts – e.g., if a part was supposed to be one foot long, plus or minus 1/8 of an inch – then the Japanese parts were all within 1/16 of an inch. This made the Japanese cars run more smoothly and customers experienced fewer problems. Engineers at Ford could not understand how this was done until they met Deming.

Some things done the old way worked.  Here is post by an ex-Boeing Director of Quality Assurance.

Bob  Bogash,  retired after more than 30 years with the Boeing Commercial Airplane Group, spent the last 9 years of his career as  the  Director  of  Quality Assurance for the Materiel Division.  In this position, Bob was responsible for the on-time production and quality  of all the non-Boeing produced hardware and software used on Boeing commercial jetliners.  More than 3000 outside suppliers in more than 20 countries delivered more than one billion parts a year to Boeing  production lines.  Bob organized this function from a zero baseline, ultimately staffing more than 35 worldwide offices with over 330 highly skilled professionals.