Engaging with suppliers and spreading the lean ethos is critical in achievement a more efficient and reliable supply chain. LMJ investigates the changes Boeing applied to the way it works.
The year started off in a big way for Boeing. On January 5th, the aircraft manufacturer announced it closed 2011 with a record-breaking backlog of 3,771 unfilled commercial orders. Five days later, it announced that the Renton plant delivered the first Next Generation 737 at a new production rate of 35 airplanes a month.
Given the strong growth in demand (with Emirates and Southwest Airlines placing record orders), it is no surprise that Boeing is looking to further increase production rates over the next two years, with the aim to manufacture 737s at a rate of 38 airplanes per month, 777s at 8.3 airplanes per month (from the current 7) and 787s at 10 airplanes per month (from the current 2.5).
There is no doubt the jet maker had to change the way it operated in order to aim for increased production rates and reduce delays. In the late 1990s, supply chain and quality issues hit the company hard when production lines had to be stopped as some parts weren’t available. When your product has millions of components and you consistently work with some 1,200 suppliers, supply chain efficiency ranks quite high in the list of your priorities. The 787 Dreamliner, the latest addition to the Boeing fleet (the first was delivered last year to Air Nippon Airways), presented the company with several challenges, specifically because it depends on parts made outside of Boeing more than other models do.
In the globalised world we live in, making your supply chain leaner is a necessary step to remain competitive. If a company wants to develop a lean supply chain, changing its way of working and making the sourcing of components more seamless is not enough. Lean thinking and the use of lean tools must be spread throughout the supply chain, and suppliers must be engaged with the aim of promoting their lean transformation too.
This is what Boeing is doing. Lean+ is an overarching continuous improvement programme started in 2006. It is considered the foundation of Boeing’s growth and productivity initiatives and the key to help the company meet customer requirements. By using and promoting a common language, and common processes, training and tools (over 110,000 Boeing employees have received basic lean online training), Lean+ helps the aircraft manufacturer accelerate its improvement efforts, share and replicate good ideas across the company and the value stream, be more competitive in the market and free up resources to invest in better solutions.
Commenting on the new production rate the Renton plant achieved, Beverly Wyse, vice president and general manager of the 737 programme, said: “Working as a team, we have achieved production levels never previously reached. It’s because of the focus and dedication of 737 employees that we’ve reduced waste in our production system and identified opportunities to further increase our productivity. The first airplane at the 35-a-month production pace rolled out of the factory the smoothest ever. Only eight jobs were completed outside of our production sequence out of thousands and we only experienced three part shortages during production.”
Lean+ and the work already done with lean at the Renton facility have brought Boeing to the production rates it announced in January. The company will build on this solid foundation when delivering the 737 MAX, which will be also built in Renton. Every product, however, is different and Boeing is likely not to apply the specific 787 process directly to future programmes. The 787 Dreamliner is a unique product and has a similarly unique supply chain. It will be important to strike a balance between in-house and supplier production appropriate to each individual new programme.
Lean+, however, can only work if its efforts to continuously improve engage suppliers just as much as they engage Boeing employees working on the production lines. There is no way Boeing can achieve the production rates it’s aiming at without the whole of the supply chain supporting this target. The work Boeing does with its suppliers sees, for examples, the procurement department holding reviews with suppliers and support on quality aspects including Production Readiness Assessments and Rate Readiness Reviews. These “stress tests” on the suppliers’ ability to perform or rampup to required levels aim to mitigate risks, and are done on top of normal procurement interface activities.
People from Boeing visit suppliers on a regular basis, contributing to spreading the lean ethos across the supply chain. The company oversees its suppliers’ conformance and compliance to AS/EN9100, which includes a responsibility to have a programme of continuous improvement.
Additionally, the company works with suppliers both on a Build to Print and a Supplier Controlled Design basis. With SCD, the supplier and Boeing Engineering groups work very closely to design the part and assess suitability and integration with the aircraft. Boeing tends not to work with mechanics from the shopfloor at this stage, unless issues arise and communication is required.
Examples of the work Boeing does on its supply chain include a project with office supply provider OfficeMax to reduce packaging waste and fuel consumption (a lean workshop was organised to identify opportunities to improve processes and benefit both companies) and one involving a Commercial Airplanes technical team working with suppliers for years to redesign shipping crates for aircraft parts (focusing on the packaging of interior panels for the 747-400 freighter conversion, the project slashed the number of crates from 99 per aircraft to 14, reduced handling time by four hours and trimmed storage space by 2,300 square feet).
Lean+, together with a new approach to organising and managing the supply chain, will help Boeing to manufacture its planes more efficiently, producing less waste in the process, and to deliver them more quickly.