‘Stable’ Boeing Moves Into Production Fast Lane
Boeing Commercial Airplanes has finally reached a period of stability after several years of struggle with the 787 Dreamliner and a three-year period in which it executed 15 production-rate increases across its product line, according to senior v-p and general manager of airplane programs Pat Shanahan. During a roundtable meeting with a group of reporters at Boeing’s 737 factory in Renton, Washington, just ahead of the Farnborough Airshow, Shanahan emphasized the company’s need to concentrate on airplane reliability, performance and features while changing processes in production systems before the launch of two new airplanes, the 737 Max and 777X.
“There are a whole bunch of us who have an inch of scar tissue on our backs, so we said on the  Max because of the 787 experience, ‘let’s be super conservative,’” said Shanahan. “So now we’re cashing in all of that in terms of schedule and airplane performance, and on the 777X we’ll find kind of that sweet spot so we can get to market as fast as we can, do as many things on the airplane that make sense, but be very risk balanced.”
Boeing plans to strike that balance in part by “consciously” moving experienced personnel from the 787 program to the 777X, added Shanahan. Meanwhile, Everett site leader Elizabeth Lund will oversee the production system transition.
“So when you think about the production system, and people ask, ‘Hey, did you guys learn anything from the 787 experience?’ Yeah, we’re vertically integrated on this; the fuselage is going to have the same architecture as the 777; we’ll make some real advancements in how we produce it so it’s much higher quality; and on the wing, that’s in house, and by the way it’ll be right in our backyard.”
First Delivery Moved Up
In preparing for the 737 Max, first delivery of which Boeing has scheduled for the third quarter of 2017, the company’s conservatism has already paid dividends in its ability to remove some buffer from the schedule, advancing first delivery by some three months. In fact, Shanahan said the program carries the potential to shave off still more time. On the 777X, Boeing has had more time to set its schedules, said Shanahan, allowing it to approach development in a more deliberate manner. The company derives still more confidence in the 777X from the Boeing-centered supply chain it employed on the original 777, he added.
On the 787, deliveries must accelerate in the second half of this year due, in part, to the fact that a defect found in some Mitsubishi-built wings forced delays on more than 40 airplanes. Again, Shanahan expressed confidence that the company will deliver its promised 110 airplanes by the end of the year, even as it welcomes 15 new airlines to its 787 customer ranks. “Compared to last summer, when we were juggling [disruptions caused by the] battery and some of the service reliability, this is much more stable,” he said. “It’s just a big lift, so we have to just perform at a higher level but we don’t have to work harder. Things that we put in place in terms of processes working, they’re now working.”
Flow Times Cut
Flow times on the 787 line have decreased by some 40- to 50 percent since last summer because of the improvements in airplane productivity and reductions in traveled work from factory onto the field, stressed Shanahan. “May was our best month ever on the 787 program for deliveries,” he said. “So these guys, after going fifteen rounds with Mike Tyson the last few years, are now starting to look over at the 777 guys and say, ‘We can outrun you; we’re just as good as you guys.’”
Notwithstanding the improvements in Everett, Renton still sets the standard for efficiency and serves as a model for how to increase rates, one of the most difficult things to do in aircraft production, said Shanahan. When the first airplane produced at the 42-per-month rate rolled out of the Renton factory in March following an increase from 38, the entire site saw only 15 parts shortages, out of some 400,000 parts and assemblies that Renton accepts for each airplane.
Across the company, Boeing’s “big push” now centers on reducing flow time, allowing for more of what Shanahan called free capacity without substantially increasing the factory footprint. “In terms of final assembly square footage, I don’t think we need it,” he said. “It’s like [the case of] the surge line. When we vacate that, that [frees] a lot of space. And we did things like consolidate the 767 line into roughly half the original footprint.”
Of course, Boeing depends on its suppliers to also cut flow time and increase productivity, but, as Shanahan noted, the effort requires teamwork. Boeing, therefore, needs to get involved in helping its second-tier suppliers manage their own supply chains or help facilitate design changes that allow them to derive more productivity out of their manufacturing processes. “Or in the case of some of the other advanced manufacturing work that we’re doing on other programs, we’ll share that with them,” said Shanahan. “If they’re not successful and have to go add capacity the way they’ve always done it, then it’s going to have the same cost structure.”
Fundamentally, rate increases create the opportunity for efficiency improvements and, ultimately, a healthier cost structure, Shanahan explained. “Our philosophy is, when you invest in rate, you have the chance to invest in new technology or process change,” he said. “The way you achieve productivity is not be squeezing things, it’s by changing how you do the work.”
Maintaining a constant rate makes it harder to invest because such investments need to produce a relatively quick return. Conversely, adding capacity requires investment anyway, so one might as well invest in something new, said Shanahan. “And that speaks to why you want to practice early or kind of have in the back room or in your laboratories some of these processes, so you don’t experiment while you’re trying to ramp up production like we did on the 787,” he concluded.