Boeing 787 progress slowed by its supply chain

Boeing took full advantage of the many delays and problems that plagued Airbus’ A380 super-jumbo program. At that time, I warned that Boeing should be careful that they don’t run into problems themselves. But as the 787-Dreamliner is delayed yet again, it seems that Boeing’s supply chain is causing problems and unless Boeing can right the ship and regain their credibility, they risk damaging their reputation and losing orders to arch-rival Airbus. Key quotes from this article in the El Paso Times:

Boeing has outsourced an unprecedented amount of the 787’s design and production to manufacturers scattered across the globe. Line workers in the company’s widebody assembly plant north of Seattle have had to do a lot of “traveled work” that suppliers were supposed to handle themselves. That problem has become more challenging than others the company has faced, including a shortage of small parts and the tiny fasteners that hold pieces of the plane together.

“We underestimated how long it would take to complete someone else’s work,” Shanahan said. “We designed our factory to be a lean operation. And the tools and the processes, the flow of material, the skill of the personnel are all tailored to perform last-stage high-level integration, checkout and test.”

In an effort to be “lean”, it appears Boeing became too reliant on possibly too many outsourced suppliers and contractors to deliver and manage key portions of production. This problem is not unique to Boeing, as companies have belatedly realized that in outsourcing you risk losing an element of control over the process and, more importantly, reliability. That’s why you see some companies moving key suppliers or parts closer to home or taking a harder look at who and how they do business with up and down the supply chain.