Sunday, April 12, 2015

Cessna and Flexibility

The last two posts I made would both apply to the flexibility of Cessna.  I will again revisit the design of the 162 as it is a great example of the company exerting its options in being flexible.  While I do not have the actual numbers, I assume that Cessna completed a complete analysis prior to launching the project.  However, in order to achieve the low manufacturing costs needed for the LSA market, Cessna invested in a new factory in China.  While this was officially announced in 2007, there were delays in plant opening that likely added unexpected costs to this and other expansion projects Cessna had in mind.

The addition of a plant in China would permit Cessna to achieve lower production costs not just for its 162 Skycatcher line, but also for some of its other models.  Since expanding operations into China, Cessna originally had grown to multiple factories, but has since decided that this move was not practical and has consolidated operations abroad.  Unfortunately, the projections around both the 162 and the Chinese expansion were far above what reality had in store for Cessna.  Thankfully, the company did not invest so much that it was unable to recover from this failed venture.

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