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Politics : Formerly About Advanced Micro Devices
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To: Tenchusatsu who wrote (598680)1/21/2011 7:36:17 PM
From: tejek  Read Replies (1) of 1575189
 
Ted, > The Dreamliner's budget is now 120% higher than first estimated.

A 20% overrun in the budget isn't the big concern, IMO. The time-to-market is, though.

Its not 20% over budget but 120%. If the original budget was $5 billion, its now $11 billion. That's significant slippage.

Nothing wrong with outsourcing some parts of the project if done right. Unfortunately it's one of those things that you can't just get right the first few times out, unless you're lucky. You have to build up the experience and get a good feel of what remote sites are capable of. And often you won't know what the stumbling blocks are until you actually stumbled over them.

Outsourcing is not that big a deal when you are talking chips.......they are small and much easier to ship......plus the manufacturing process is fairly straight forward. However, its a problem when your talking the wings of a jetliner........lots of complexity with little room for error.

But that's no reason to get hysterical over the move itself. Or think that outsourcing is going to be the death of the American economy (though see my last post for a good link related to that).

That's not what I am worried about.......Boeing is a big company but it can not afford to make these kinds of big mistakes. INTC can make big mistakes and still be okay because its margins are around 60%. BA's Gross Margin is less than 20% the last time I checked. There is not a lot of wiggle room in a margin that small.
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