Hawker Beechcraft: Setting New Priorities

 - November 1, 2011, 9:00 AM

When Bill Boisture walked through the doors at Hawker Beechcraft (HBC) in March 2009, he clearly understood the enormity of the challenge he’d accepted as leader of the newly privatized aircraft manufacturer. 

“Our finished product costs were higher than they should have been and our margins were shorter than they should have been, even in a healthy market,” Boisture said. “Of course, the market was not healthy in 2009.”

When 15-year Beech veteran and director of manufacturing Mike Hammond and many of his colleagues heard some of Boisture’s unflattering comments–like they’d essentially been building airplanes the wrong way–they were understandably upset. But deep down, all HBC employees knew the company was in trouble, so Boisture’s follow-up comments resonated well. “Bill Boisture told us that he wanted to have the best trained workforce in the industry,” Hammond recalled. “He also said the only thing that mattered to him was the quality of our products.”

HBC’s senior leadership team including Bill Brown, the company’s executive v-p of Global Operations, believed the road to success meant looking for just a few areas to tweak for success initially and hoping others would follow. One was to develop a way for all HBC employees to think, communicate and listen more effectively. Boisture selected Insigniam Performance–a management consulting company specializing in strategy design, implementation and large-scale change initiatives–to help them achieve the breakthrough results he knew they needed to be able to succeed. Even critics admit the results have been impressive.

Aircraft manufacturing is a capital-intensive industry, which means no one wants inventory sitting around: a $20 million fuselage here and $5 million or $10 million in engines there adds up pretty quickly. By redesigning the layout of HBC’s Plant 4 after the Insigniam training, labor and management working together developed methods of reducing inventory costs by more than $700 million in the past two years.

Then there was the zone-build concept that evolved from conversations among employees on the shop floor. Rather than move people all over the plant to install the same part in different aircraft, why not cross-train people for multiple jobs in the same location? “Senior leadership said we were crazy to try zone-build, but they also said go ahead and try,” Hammond explained as he also proudly added, “We’ve reduced man-hours to build an airplane by 65 percent since we started zone-build 18 months ago.”

The composite fuselage mating spot is the most critical on the Hawker 4000 assembly line. “Called the Fast-Tool station, it’s where all the pieces really become an airplane,” Hammond said. “It’s also where we begin adding significant costs, so we want to accelerate the build process here. Two years ago, a Hawker 4000 spent 22 days in Fast-Tool. That’s now down to 15 and our overall goal is to reduce it to 10 while we maintain the quality.”

Hammond also remembers how HBC’s Insigniam training convinced everyone to reorganize the company’s priorities. “We used to focus on the schedule only and we were never on time,” he said. “Now we focus on employee safety first, then quality, and we assume costs and schedules will come into line. Quality drives everything now,” he added, “and now we’re always on time.”