Tag Archives: Business efficiency

Boeing Outsource When Lacking Skills

OutsourcingThe epic Dreamliner project instituted by Boeing changed the way many businesses look at supply chain management permanently. Although Boeing recorded several glaring problems, such as a 3-year delay in delivery of their first aircraft, the changes to their manufacturing and delivery process have fundamentally changed the future operations of their business for the better.

From the outset, the Dreamliner eschewed the traditional engineering goal of greater speed in favour of increased efficiency and economy. The lynchpin of this design was to be the use of carbon reinforced plastic composite materials for nearly 50% of the aeroplane, including the wing and fuselage.

As good as the idea was however, Boeing lacked the skills and equipment required for creating carbon composite components, fundamental to the success of the Dreamliner. The manufacturing of these parts was therefore outsourced to contractors who had the requisite abilities.

This shift to outsourced component construction required a paradigm shift in the Boeing supply chain and the way it was managed. To allow for free data interchange between supply chain members, Boeing implemented a ‘collaboration hub’ that kept stakeholders fully informed of manufacturing progress.

As the project progressed, the contractors encountered a number of problems which delayed the project as a whole and required direct intervention by Boeing. As roles were adjusted and responsibilities shifted around the supply chain, the implementation of the collaboration began to prove its worth by providing a single point of reference for every stakeholder. Production information was available in real time allowing for tweaks and balances at each supplier (of whom there were over 50).

Boeing took the brave step of starting a project which they themselves could not complete, but choosing a supply chain management system which would not only underpin the project, but adjust according to circumstances. Applying this scenario to your own business, how could a radical supply chain alteration benefit you? Is your current supply chain management system flexible enough to cope?

Boeing Tighter Supply Chain Integration for Success

Keeping a close eye on the supply chain is essential to ensure raw materials are successfully converted into saleable goods, but is observation enough to succeed? Boeing’s epic Dreamliner project demonstrated that tighter integration of the supply chain constituents was absolutely essential in order for the first of the new aircraft to be delivered.

The Dreamliner was born out of a desire for greater efficiency both in the aircraft itself and in the construction process behind it. Boeing took the previously unheard of step of outsourcing the manufacture of the aeroplane components to 50 specialist subcontractors and used a central supply chain management portal to keep tabs on progress. The idea was that the components would be created simultaneously at various plants and then delivered to Boeing for final construction in a three-day window.

Such a deadline requires that members of the supply chain be working in synchronisation with each other and that they are fully informed about progress at each point. As problems arose during manufacture, partners were kept abreast with delays and developments allowing them to adjust their own processes to compensate.Boeing Tighter Supply Chain Integration Success

The collaboration hub also allowed Boeing to keep a tight handle on supplier progress and provided a mechanism by which they could address issues with contractors as and when they arose. At certain points during the project, Boeing was forced to step in and reclaim certain responsibilities to ensure the project continued on track.

The stated goals of the Dreamliner project were impossible to achieve without close integration between suppliers, subcontractors and Boeing themselves. Close communication and working practices made the dream a reality where many industry pundits had predicted disaster.

Collaboration between suppliers has often been seen as an evil necessity, rather than a genuine route to success. The eventual success of the Dreamliner was hard won, but the lessons learned by Boeing will shape the way they work with subcontractors permanently.

How would your business benefit from tighter supply chain integration? What would you need to change to make it a reality?

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