Boeing: Taking Flight With Its Supply Base

It looks like Boeing has righted the ship -- the airship, that is -- when it comes to supply related delays with its forthcoming 787 Dreamliner. According to the above-linked Wall Street Journal article (registration and subscription required), Boeing is now on track to "deliver the game-changing plane to its first customer, All Nippon Airways Co., by the end of the year (2008)." To put things back on the runway, the manager of the 787 program "reorganized production and development departments for the 787 to be sure production can be ramped up once the first aircraft have been delivered ... [but] his biggest challenge has been working with suppliers, and that's also where he's made the most progress in recent weeks ... Boeing has learned hard lessons on how to run a new type of supply chain." To improve its supply chain performance and overcome the supply shortages and other recent issues that have plagued its new platform introduction, "Boeing has allocated additional funds to send its own engineers to work with suppliers, both in the U.S. and offshore, to get things back on track."

In contrast to Airbus, Boeing has been quick to respond to its supplier performance and development issues before delays spiraled out of control. Clearly, Boeing realizes that the emerging role of procurement in the 787 program is as much a resource coordinator for everything that happens outside its four walls (e.g., engineering, supplier quality, etc.) as it is in managing traditional procurement activities (e.g., materials specification, negotiation, supplier development, etc.) Perhaps, in part, this explains why Boeing's supply chain is pulling ahead of its rival's from across the pond. In addition, this rapid response points out the importance of identifying and implementing supply-related fixes as quickly as possible. After all, when things go wrong, a thirty-five hour work week just won't cut it to solve nagging problems before they become company toppling issues.

Jason Busch

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