My Fisher Internship Fisher College of Business Office of Career Management

My Fisher Internship
Saving the Boeing Company, 1 Penny at a Time

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My second week is ending and I’m finally grasping my role at Boeing.  I essentially am rescuing the much delayed, overbudget, and problem-ridden 787 program, one penny at a time.  When a customer wants to change a standard feature on thier 787, I tell them how much to pay. 

 

And how do I decide how much to charge them?  Net Present Value.  If you’ve taken corporate finance or accounting, you know NPV.  This is perhaps the first time I have used practical information from a Fisher course in “real life”.  The basics of NPV calculations are Future Benefits minus Future Costs.  If the NPV is positive for a particular project, it adds value to the company.  If it is negative, the costs outweigh the benefits so the project should not be undertaken. 

So far I’ve calculate the NPV for provisions such as installing a 3-ounce key lock on a cabinet near the cockpit, sewing a sign that says “Crew Only” to a curtain in the cabin, and adding 2 LED lights behind a wall to make an airline logo light up.  Sounds like pretty insignificant changes right?  Well when you consider the charge for the lock installation was $12,000, the “Crew Only” placard was $38,000, and the LED light install was over $780,000, those costs add up.

Life outside of work is fast and fun.  I feel like I could do something different every day and I still wouldn’t make it through my list of things I want to do.  In my next post I’ll talk about life in Seattle.

2 Responses to Saving the Boeing Company, 1 Penny at a Time

  1. Mark Wilson says:

    Hi Sean! I gotta ask, is just $12,000 to add the lock to just one Boeing 787 or a dozen an airline has ordered?

    Great post about what you do and good luck helping Boeing pinch pennies.

    Mark

  2. Sean Roach says:

    It is literally $12,000 PER LOCK and there are two on each plane. Even though it’s something insignificant, I estimate at least 50 people within Boeing have some job to do resulting from this change. Engineers have to draw new schematics, multiple groups then evaluate them for safety, FAA compliance, and tons of other paperwork. Then the finance department has to estimate costs from the change. Other engineers have to install the locks. And when you’re paying engineers $200/hour… the work hours just add up, and installing a lock that’s worth .50 cents costs $12,000.

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