Communications of the IIMA


This research investigates the effect of global supply chain strategy on product quality and U. S. competitiveness by analyzing the case of Boeing 787 Dreamliner recent lithium-ion battery overheating incident. Boeing 787, a new and complex product, has outsourced 70% of its parts and components with a redesigned global supply chain strategy. The grounding of all 50 Boeing 787s already in service by the U. S. FAA on January 16, 2013, has trigged a renewed debate on product quality as a result of extensive outsourcing and its impact on the overall U. S. competitiveness. While this incident is a result of in-flight battery fire with Japan Airlines, along with a similar case occurred earlier in January 2013 in Boston with the same airline company, many believe Boeing’s new aggressive supply chain strategy may have contributed to its quality and safety problems. Managerial implications are discussed to generalize the impact of various global supply chain strategies on product quality and overall U. S. competitiveness.