What can be learned from the Boeing 787 production troubles
The introduction of Boeing’s 787 “Dreamliner” has not exactly been a story of success and some even started to nickname the 787 as the “Nightmareliner”. But now at the turn of the tide where all grounded 787 are being modified to once again take the skies there are important lessons to be learned for Boeing and others that have been looking at ways to optimize their production process.
The 787 is a revolutionary aircraft (50% of the primary structure is composite, fuselage is produced as a whole instead of separate sections, less weight, higher fuel efficiency) but it is not only the aircraft that was a revolution for Boeing, also the production process of the 787 is a whole new approach for Boeing. In order to reduce final assembly by three days Boeing decided that final assembly would need to be organized leaner and more simple. To achieve this Boeing assigned more responsibilities to all the various suppliers and subcontractors of the 787 production and ordered them to assemble more themselves and to deliver completed subassemblies to the final assembly line. On the 15th of December 2009, the first test aircraft had its maiden flight but it suffered from five major delays:
05-09-2007: 3 months delay due to shortage of fasteners and incomplete software
10-10-2007: 6 months delay due to issues in the foreign and domestic supply chain
16-01-2008: 3 months delay due to insufficient progress in the production process
09-04-2008: 15 months delay of delivery of first aircraft due to continuous problems
04-11-2008: 6 months delay due to incorrect fasteners installation and strikes at Boeing
So what happened? Boeing’s new approach was based on the production system that the Japanese car manufacturer Toyota is applying. Production of Toyota cars is what is called an integrated socio-technical system. Which in essence means that the entire value chain (from suppliers to Toyota itself) is focused on joint optimization of the whole production process of Toyota cars. This joint optimization even stretches as far as optimization of the suppliers of the suppliers of Toyota. Essentially Toyota is precursor of what nowadays is called “lean manufacturing”. However two major aspects of Toyota’s production strategy are often missed:
1. Only existing and proven technologies and production steps are outsourced to suppliers and;
2. Toyota takes share in the companies that supply them and places young and promising managers at the head of those companies.
Boeing did not adhere to those two aspects. New technology was being produced by the suppliers (new engines, new electrical systems, new software, new fuselage) and Boeing kept to the classic customer – supplier model. This is best proven by the problems Boeing had with Vought Aerostructures. This supplier was under contract to build the fuselage of the 787, but continuously delayed. Boeing did not have anyone in place in Vought who would keep track and recognize the problems occurring and Boeing had to rely on the reports they would get from Vought Aerostructures. In the end this resulted that both Boeing and Vaught fired their program managers and Boeing bought the Vought Aerostructures plant where the fuselage was produced (source).
Outsourcing more responsibilities to suppliers and subcontractors can certainly make production (or maintenance ) processes more efficient and cheaper, Toyota has proven this over many years. However when outsourcing activities it is important to make sure that only proven methods and or technologies are outsourced to your suppliers. This gives the outsourcing organization the possibility to transfer its knowledge of the existing method or technology to the supplier. Additionally it is of importance that the supplier is in detail familiar with your processes and company. Fastest way to achieve such awareness is to place former or current employees of your own in their organization. Outsourcing activities without taking concern for these two aspects will ensure that you will have continuous struggles and issues with your suppliers and will reduce the efficiency of your supply chain.