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Boeing’s Lithium Ion Battery Supplier Takes a Different Public View

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In our previous Commentary Six update related to Boeing’s ongoing 787 grounding crisis, Supply Chain Matters  made note that there was not any open mention of the participation of experts from battery supplier GS Yuasa in Boeing’s internal investigations related to what caused “thermal runaway” conditions in the two specific 787 incidents.  We were willing to note that this might have been an oversight related to the current business media reporting, but none the less, it certainly required some clarification.

The Wall Street Journal reported (paid subscription required or free metered view) that this supplier may now be at odds over what should be included in the final fixes.  The WSJ article indicated that the day before Boeing’s meeting with federal regulators last week, a high-level Yuasa delegation briefed senior U.S. Federal Aviation Administration (FAA) officials about the battery maker’s concerns, according to officials familiar with the details. Officials at GS indicated that “while it supports engineering and design changes Boeing has proposed to try to end the six-week-old grounding of 787s, it believes the proposed package is inadequate to mitigate all potential 787 battery hazards.” It is believed that these divergent but slightly differing viewpoints could complicate the outcomes of the ongoing FAA decision to return the 787 to operating service.  Yuasa’s primary argument, according to WSJ sources, “is that its own laboratory tests strongly suggest that an external power surge—or another problem originating outside the eight cells of the battery—kicked off the sequence of events on the 787s that experienced burning batteries. Yuasa told the FAA that temperatures and current fluctuations recorded on those planes weren’t consistent with short-circuits originating inside its batteries.”

Yuasa is recommending that a sophisticated voltage regulator be installed to cutoff power flowing back to the battery at the sign of an abnormal condition. Again, according to WSJ sources, there are no current Boeing plans that include such a regulator device. A lawyer representing Yuasa has indicated that while that supplier is pleased with Boeing’s current progress, that these additional safeguards could further increase the margin of safety. The WSJ quotes the CEO of Boeing’s commercial aircraft group, Raymond Conner, as indicating that there remains a “great partnership” among  Boeing and its battery supplier.

In its reporting, The WSJ notes that FAA officials view Yuasa viewpoints as a “face-saving” maneuver intended to reflect any criticism of the battery design. While the FAA has advised Boeing and Yuasa to work out any differences in viewpoints, none the less, these viewpoints may be another factor in the ongoing investigations.

We believe that the takeaway for supply chain management teams is once again, the need to have the voice of any key supplier openly heard in crisis focused root-cause investigations, even if those viewpoints differ on the ultimate outcome of team decisions. Yuasa’s public differences with Boeing may well have ramifications for both Boeing, as well as this supplier, months after the current incident conclude.  There is a distinct difference in “saving face” vs. a two-way collaborative commitment in developing a consensus driven action plan.  Suppliers need to know that their voice is heard, and OEM’s must have an inclusionary process to accept and assess that voice in specific action plans.  A partnership needs to be a partnership that incorporates both common and differing viewpoints, but in the end, insures that suppliers will have some input in events reflecting on the products they supply.  While we certainly are not privy to the cost tradeoffs of adding a new voltage regulator to the recommendation of proposed fixes, the sense that a supplier felt compelled to add a separate voice does not reflect a team commitment.

Bob Ferrari

 

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