Myriad failures that contributed to the 737 MAX crashes revealed “systemic shortcomings” in Boeing’s ability to manage risk - Arthur D Little

Advertised as reliable, efficient and “a pilot’s best friend”, the 737 MAX launched in 2017 and quickly became Boeing’s fastest-everselling aircraft. However, in October 2018, Lion Air Flight 610 crashed into the Java Sea, killing all on board.

Questions were raised about the design and, in particular, the software in use on the MAX, but Boeing assured customers and passengers that it was safe.

Then, in March 2019, less than five months later, Ethiopian Airlines Flight 302 crashed shortly after take-off. Every crew member and passenger died.

There were clear similarities between these accidents, and within days, a global grounding of the 737 MAX was prompted, affecting 387 planes from 59 airlines.

The cost to Boeing so far, including over 800 cancelled orders and an ever-growing number of lawsuits, is estimated to be in excess of $18 billion, in addition to considerable reputational damage.

The 737 MAX, the aircraft intended to be Boeing’s leading weapon in the ongoing battle with rival Airbus, had become a serious liability.

Risk management shortcomings

Although the lessons learned from the Boeing 737 MAX disasters have been the theme of numerous government reports and investigative journalism, little has been discussed regarding metrics that could have provided early warnings of risk.

Arthur D Little has drawn from the lessons of the MAX groundings to illustrate the importance of selecting, monitoring, and acting upon key risk indicators (KRIs) to preemptively manage risk.

It argues that the myriad failures that contributed to the crashes underscore serious systemic shortcomings in Boeing’s ability to manage risk. In addition to the organisational, cultural and technical failures, there was apparent negligence in the management of risk.

KRIs versus KPIs

Key risk indicators (KRIs) could have been used by Boeing to recognise early signs that warned of potential failure. 

When selected appropriately, KRIs can be used to provide foresight of potential risk before it is too late to take corrective action.

There are a number of factors that could have incited Boeing to take action if thresholds and monitoring systems had been in place. These include:

  • Staff complaints – A growing body of complaints and concerns were being raised and documented;
  • Staff under pressure – A study found 39 percent of Boeing employees felt they were under “undue pressure”;
  • Simulator testing results – Pilots reported the MCAS system was “running rampant”, and
  • Errors made by engineers – Blueprints were being produced at double the normal rate, and were often delivered to the factory floor incomplete or with errors.

“The MAX crashes draw many parallels with the 1986 Space Shuttle Challenger disaster.

“NASA leaders, like Boeing, were incentivised by speed and power.”

One of the main issues that Boeing had to deal with was the inherent conflict between KRIs and key performance indicators (KPIs). KRIs differ from KPIs in that KPIs track historical performance, while KRIs provide foresight for future threats.

”Although the MAX planes are now starting to fly again, they were grounded worldwide for 20 months, a period for Boeing and the FAA to reflect on and correct both known and newly identified risks,” concludes Arthur D Little.

”How many of these risks might have been predicted by KRIs? The risk lessons learned can be used across the travel and transport industry, to self-scrutinise our own practices and select KRIs to stop accidents such as those with the MAX from happening again.”