Founded in 1916, Boeing evokes images of the amazing products
and services. Each day, more than three million people board Boeing jetliners,
335 satellites put into orbit by Boeing launch vehicles pass overhead, and
6,000 Boeing military aircraft stand guard with air forces of 20 countries and
every branch of the U.S. armed forces. They are the leading aerospace company
in the world and the No. 1 U.S. exporter. Boeing holds more than 6,000 patents,
and their capabilities and related services include advanced information and
communications systems, financial services, defense systems, missiles, rocket
engines, launch systems and satellites.
But the company is about much more than statistics or
products, no matter how awe-inspiring. Boeing's 186,900 employees, with 23,400
advanced degrees, are some of the most highly skilled, educated and motivated
in the world. Partnered with hundreds of thousands more talented people at
15,842 suppliers worldwide, Boeing sees tremendous opportunities in the years
ahead for connecting and protecting people, as well as streamlining their
supplier network to increase profitability and improve efficiency.
Boeing clearly transforms itself into an integrator of large
parts and systems. Consequently, supplier's role is completely changed. In the
past, Boeing and its suppliers were duplicating their efforts in development
and production. For instance, when designing and building equipments, the
Boeing supplier was sending it to its lab or production area. Then, the
supplier was testing and shipping this equipment to Boeing which was repeating
the very same operations.
Nowadays, Lean manufacturing principles rely more heavily on
the supply base in order to achieve customers demand. Consequently, as
suppliers jointly develop systems with Boeing, it avoids redundancies. This
Lean manufacturing approach completely shifts the role of suppliers who are not
vendors but suppliers of Boeing components,which are meeting Boeing
specifications. Lean manufacturing results in reduced cost and better
products.
As Boeing focuses its attention on the integration of large
components and systems and total life cycle support, the role of the supplier
has become even more critical. It means that suppliers are obliged to assume
more and more responsibilities. They must manage everything from raw materials
to critical certifications. They are even requested to assume the management
and oversight of quality and delivery from other suppliers in the chain.
Consequently, it is key to eliminate waste and to optimize supply chains.
For instance, Boeing applies Lean principles to its inventory
management. In order to streamline its production processes, Boeing adopted
just-in-time ordering, point-of-use delivery and internal kitting.
Consequently, Boeing suppliers were required to use just-in-time techniques.
In support of this, Integrated Defense Systems has adopted an
online supply-chain tool called consumption-based ordering. This tool allows
Boeing to share its inventory levels with suppliers. The system lets suppliers
aggregate demand and order at their discretion, building and shipping only when
Boeing inventory levels fall below specified thresholds.
The supplier role shift allows Boeing and its suppliers to set
inventory levels based on consumption rates needed to support production. As a
consequence, Boeing cut the number of storage facilities at its production
sites. Boeing facilities are no more filled with raw materials and inventory.
Boeing receives parts just in time at a given assembly area. The use of eBuy
and the Min/Max ordering system in Wichita, Kan allowed Boeing in a single year
to reduce inventory by more than $300 million.
From the supplier perspective, it is easier and more efficient
to plan the production rates rather than waiting for orders. In addition, they
are enabled to forecast staffing requirements, to better schedule maintenance
and to perform their Lean improvements.
Boeing's focus is on large-scale systems integration, which
must result in total customer solutions and lifetime support. That is the
reason why Boeing suppliers are no longer considered as subordinates but as
team members. Indeed, Suppliers imputs are critical. For instance, Goodrich and
Hamilton Sundstrand are doing more and more systems integration works, which
were usually conducted by Boeing.
In the past, each company was used to hold its strategies and
information. Data and ideas sharing significantly improved communication
between Boeing and its suppliers. It helps both players to improve their own
production systems. For instance, a better communication, processes and
understanding simplifies the testing procedure. The testing procedure, which
should be performed only one time allows lower costs and a better product.
