On October 2018, Lion Air Flight 610 from Jakarta to Pangkal Pinang, crashed into the sea 13 minutes after takeoff, killing all 189 people aboard. Six months later, Ethiopian Airlines Flight 302, went down under similar circumstances, killing all 157 people aboard. All Boeing 737 Max planes were grounded world-wide. Over $6 billion dollars evaporated from the company’s market cap overnight. If the crisis is not fixed soon, it will impact the long term stability of the company. Boeing 737 sales are 33% of the projected sales in the next 5 years.
The flaw turned out to be the MCAS system which is a life-critical system in which software quality is of the utmost importance. Software budgets should be heavily invested, which can greatly reduce defects, and make a difference between life and death. To cut costs, executives often rush decisions, imposing unrealistic deadlines, and outsourcing to cheap contractors to save money. When products and services are rushed, morale suffers, quality suffers, productivity suffers, bugs pile up, tests are skipped, and there is team burnout.
The valuable lesson to all of this is, don’t repeat Boeing mistakes. Don’t be obsessed with cost cutting to save a few dollars, if it’s going to cost the company a lot more in the long run. Don’t sacrifice quality. It could have been a huge win for Boeing had it not been obsessed with cost cutting. It turned out to be a big disaster in the end. All that management did was take a hatchet into the Boeing brand. In the end, cheap is sometimes expensive.