Former CEO of Ford and Boeing Commercial Airplanes says all companies are becoming digital, connected.
Alan Mulally is not your average retiree. At 71, he’s one of the very few business leaders who has had the opportunity to change the business world twice: At Boeing, where he was CEO of Boeing Commercial Airplanes, he pioneered the use of a new generation of computer-aided design (CAD) software that revolutionized manufacturing; then, before retiring as president and CEO of Ford Motor Company in mid-2014, he led the 112-year-old automobile maker’s turnaround from a US$17 billion loss at the end of 2006 to profitability by 2008 – without the aid of government bailouts.
Today, Mulally is still very much in demand for his talent, his ideas and for knowing how to gain competitive advantage through organizational culture, serving on the boards of two high-tech companies. When he speaks people listen – and his insights about the future of business might be best described as provocative.
Traditional Industries Versus Digital Ones
For example, Mulally believes that the distinction between well-established companies that participate in more traditional industry sectors – ones that existed long before the start of the dot-com era – and so-called “new economy” companies heavily involved in the technology sector will become increasingly blurred.
“I find the whole discussion about digital versus non-digital companies very interesting, but it’s just not true,” he said in a wide-ranging interview exclusive to Compass. “Digital technology, the Internet, information processing and the ever-improving quality and miniaturization of sensors and robotics will enable the quality, productivity and transformation of all industries around the world. All companies will be brought together by databases and systems thinking. Individual companies simply will need to decide which things they are working on to add value in which industry. The enabling technologies will be exactly the same.”
The most important lesson that business leaders can learn from broad societal and business trends, he said, is the power of operating systems that deliver connectivity. “Information is going to be ubiquitous, and everybody around the world will have access to it,” Mulally said. “Can you imagine what’s going to happen when people get a chance to access that information and work together to create even more value for all of us? Embracing the integration of hardware, software, sensors and systems absolutely will be the key to the future for everybody.”
777: The First All-Digital Airplane
As one of the first executives to bring a traditional heavy industry into the digital age, Mulally sees a parallel between the digital-driven transformation he discerns on the horizon today and what he experienced 25 years ago, when he employed the power of digital technology to break the decades-old paradigm of how commercial airplanes were designed and built.
The year was 1990. Boeing had kicked off development of the “Triple Seven” jet from scratch in 1988, and Mulally was director of engineering. Prior to the 777 model, engineers created physical parts from two-dimensional drawings on paper. Specialists in various departments would design them, but it was up to manufacturing to figure out how to produce and assemble them. Testing form and fit was impossible until the first physical prototype was built.
In Boeing’s previous development of the 767 model, the paper-to-prototype approach had required about 13,000 individual design changes to the door assemblies alone. Management knew that if Boeing was going to deliver the capabilities and quality its customers wanted and complete the even larger 777 project on time and on budget, the company’s approach to designing and building planes needed to change radically.
Boeing had been following trends in computer-aided design and computer-aided manufacturing (CAD/CAM) technologies, in which Mulally had taken a special interest. “We knew that if we could find a breakthrough in how parts are created, so they could be assembled quicker and more easily, we could make a tremendous improvement in the quality of the end product and in our productivity,” Mulally said.
In Boeing’s global search for solutions, Mulally and his team tapped Dassault Systèmes, the developer of CATIA (and the publisher of Compass), which enabled engineers to simulate the assembly of any product – an aircraft, an automobile – in three dimensions in a computer, prior to actual physical production. This capability allowed engineers to verify that all the parts would fit properly before they were manufactured. Theoretically, by virtually eliminating the trial-and-error approach to building and fitting parts, the software could save Boeing substantial time and money.
But could the software be scaled up to simulate and build an entire airplane? Mulally and Bernard Charlès, who was Dassault Systèmes’ president of strategy, research and development in 1990 and is now the company’s president and CEO, thought the case for designing and virtually pre-assembling parts in three dimensions – bypassing paper blueprints altogether – was so compelling that it was worth the risk.
To prove their point, Boeing built a mock-up of the 777’s nose section. The test verified the concept and demonstrated that CATIA could be scaled up to simulate an assembly of the entire airplane. The test was so successful, in fact, that all planned physical mock-ups were canceled.
“Unheard of – never been done!” Mulally exclaimed with as much excitement and pride as if the achievement happened yesterday – not 25 years ago. “It was probably one of the biggest single improvements in the design and manufacturing of airplanes in the last 100 years.” The gamble was such a success, United Airlines accepted the very first production airplane virtually defect-free and on time, a remarkable accomplishment for such a large, complex engineering effort.
Continue reading the rest of this story here, on COMPASS, the 3DEXPERIENCE Magazine.
If you liked this article, here are others you might also find interesting: