Case Analysis Of Boeing

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Boeing has a very complex supply chain consisting of several international and domestic suppliers with a wide range of financial arrangements from direct ownership to contract arrangements. Due to the specialized nature of the final product, every part has to meet a specified standard of quality. Although it is possible that some supplies may be purchased on the open market, I was unable to find any that are. A fully assembled 737 has 367,000 parts, an equal number of bolts, rivets and other fasteners, and 36 miles (58 kilometers) of electrical wire (Brady, n.d.). Boeing has made significant improvements to both the training and technology implemented in the 737 production processes since the introduction of the “Lean Academy” in the 1990’s…show more content…
Performance is a large factor that is considered in the supply base because it is not practical to maintain an inventory that can compensate for variations in production rates of suppliers (Jenkins, 2002). Also, with proprietary components internal capability is essential (Brady, 2018). The decision to outsource component parts is largely based on the supplier’s ability to meet delivery times, quality standards, and quantities necessary to maintain the constant production needs. Unlike the 737, Boeing outsourced as many parts as possible with the 787. The costs associated with inconsistent quality and delivery of component parts backfired costing Boeing billions of dollars and years of delays (Denning, 2013). “Production delays plagued the 787 and the 747-8 programs. Boeing learned painful and costly lessons from its production problems in 1997. Those lessons have been applied to current 737 production plans, company spokesman Adam Tischler said.” (Catchpole, 2017). Critical components for the 737 are increasingly made by Boeing and its subsidiaries, while less complex components and internal assembly of the passenger cabins are more likely to be…show more content…
In March 2015, Boeing started using a new automated system to build wing panels for 737 jetliners (Brady, 2018). The robotic system, known as the Panel Assembly Line, or PAL, drills holes and installs rivets in the wings of a production aircraft (Brady, 2018). PAL replaces older-generation machines that drilled the panels, but left workers the labor-intensive task of installing rivets (Brady, 2018). PAL increases economies of scale in 737 assembly by reducing assembly time while eliminating the risk of occasional injuries and defects (Brady, 2018). PAL cuts injuries in half, slashes defects by 66 percent and reduces production time by 33 percent – and reduces the factory footprint by half (Brady, 2018). In October 2015, Boeing reduced production time for each 737 to 10 days from 11, less than half the time it took to assemble each Boeing 737 in 1999, before Boeing instituted moving lines on the 737 floor (Brady, 2018). While production capacity increased by one-third in December 2015 at the 737 final assembly center’s actual production increased from 38 to 42 737s per month by removing waste that slows production (Brady,

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