It's Time to Rethink Boeing's Global Manufacturing Approach

As a new year gets underway, the aerospace industry is heading down the runway at full-throttle. However, don't look for the Boeing 787 Dreamliner to take off this spring as anticipated.

Last year, Richard Aboulafia, an aerospace analyst with Teal Group, an aviation research firm in Fairfax, VA, commented on Boeing's need to reconsider how it did business in order to compete with Airbus. Eventually, this led to the supply chain framework for the 787, which encompassed getting the development risk off their books and coming up with a killer application.

Unfortunately, Boeing's "killer application" is turning out to be a serial killer, hitting everything in sight.

Boeing's traditional production model was to provide designs for suppliers to follow, a system the company called "build-to-print." But on the Dreamliner, it asked suppliers to both design and build their airplane sections. I don't know who is responsible for this "killer application", but apparently it was someone who lacks manufacturing and assembly experience.

With three million ft2 of new factory floorspace built, on 135 sites in two dozen countries around the world to support the manufacturing of the 787, only Boeing can explain its rationale in outsourcing components of unprecedented complexity to an outlandish amount of suppliers. Even worse, these foreign suppliers are not just building to Boeing specifications, they are being given the freedom and responsibility to design the components and raise the funds for development costs that are usually shouldered by Boeing itself. This "killer application" has gotten so far out of hand, that even Boeing acknowledges it has no idea how many people around the world are working on the 787 project.

Efficiency and productivity have always been at the heart of Boeing's manufacturing problems, and by all indications, nothing has changed. It's been said that the 787 Dreamliner is the most complicated plane ever. So, why Boeing would outsource the design and build of components, and think it could bring them back in house and assemble them like a set of Lego blocks is destined to become a case study in MBA programs.

Boeing's future may well depend on the successful delivery of the 787 Dreamliner later this year. And while there is an outside chance that they can pull it off, it's time to consider some alternative solutions — like standardization across the entire organization and providing supersites consisting of supplier factories alongside final assembly plants.