Monday 30 November 2015

How Poor KM cost Boeing $1.6

Poor knowledge management and a lack of Knowledge Retention can cost organisations a huge amount of money; witness this example from Boeing.

According to Energy Voice

When Boeing offered early retirement to 9,000 senior employees during a business downturn, an unexpected rush of new commercial airplane orders left the company critically short of skilled production workers.
The knowledge lost from veteran employees, combined with the inexperience of their replacements, threw the firm’s 737 and 747 assembly lines into chaos. Overtime skyrocketed and workers were chasing planes along the line to finish assembly.

Management finally had to shut down production for more than three weeks to straighten out the assembly process, which forced Boeing to take a $1.6 billion charge against earnings and contributed to an eventual management shake-up.

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