Boeing's Delays Show Supplier Perils

CHICAGO (TheStreet) -- As large corporations lay off workers by the thousands, subcontractors are often called in to make up for lost manpower. That can mean big opportunities for small businesses. Unfortunately, it can also mean frustration, miscommunication and bureaucratic headaches.

For a case study in the perils of outsourcing, take a look at Boeing(BA Quote). This week, the company announced it was taking a $1 billion charge due to delays in the production of its new freighter jet, the 747-8. That's in addition to another $2 billion in charges related to the much-delayed 787 Dreamliner. Once promoted as a game-changer for the airline industry, it's now two years behind schedule.

In part, Boeing can blame the slow economy. With fewer travelers in the skies, airlines have canceled some orders for new aircraft. But Boeing's problems also have put its suppliers on the defensive. The Dreamliner not only boasts a revolutionary design, it features an equally revolutionary product-development process.

"The Dreamliner features brand-new technology and materials," says supply chain expert Bob Ferrari, managing director of The Ferrari Consulting and Research Group in Reading, Mass., and author of the Supply Chain Matters blog. "Boeing wanted its supplier base to be involved in the manufacturing and design very early on."

The company put together a network of about 50 suppliers in the U.S., Europe, Japan and South Korea. Rather than being hired once the design was in place, they took an active role in developing everything from the fuselage and landing gear to the engines and lighting.