Supply Chain Management

1.Define the supply chain from raw material to final customer.
The 787 Dreamliner airplanes’ supply chain is the perfect example to define the supply chain from raw material to final customer. In the past, Boeing relied on many suppliers to provide Boeing with specific materials and parts in order to assemble the plane alone. However it took a long time therefore Boeing came up with a plane where the supplier will design certain and major sections of the plane, finish it at their location and ship these sections and parts to Boeing for final assembly and testing at the manufacturing plane.
As we know the most important part of the plane is the body which is made of the light-weight, carbon-fiber reinforced plastic supplied by Toray Industries in Japan. Toray Industries will supply these raw materials, the light-weight carbon-fiber reinforced plastic, to Boeing and its parts suppliers. Toray Industries supplies 34% of the world’s demand for the plastic and with other companies, supplies 70% of the world’s demand. The raw materials are distributed to its suppliers such as Alenia of Italy who makes mid fuselage section and horizontal stabilizer of wings; Spirit of Aerosystems of Wichity, Kansas who make nose section, engine pylons, and wings edges; another supplier who makes rear fuselage section is Vought of Charlestown & Dallas. Mitsubishi Heavy Industries makes wing, Kawasaki heavy Industries makes mid fuselage section as well, and Fuji Heavy Industries makes wing box. Every supplier will finished these sections at their locations and then will ship these parts to Everett, Washington (the manufacturing plant of Boeing) for assembly. After the plane is assembled and passed the testing then the plane is shipped to Boeing customers, such as British Airway, LAN of Chile, Quantas, or ANA of Japan.

2.Determine their performance in terms of deliver, quality, time and cost.
As we discussed in previous blog entries, Boeing uses project flow in terms of product flow. This means that Boeings products are very unique and take a long time to manufacture in the first place. Boeing delivery time for their newest commercial airplane, the Dreamliner is completely off schedule and years behind. As mentioned above, Boeing adapted a new supply chain strategy to reduce the delivery time, however the delivery of the entire order is not in time and the lead time is extremely long. The quality of Boeing airplanes is to the customer’s satisfaction. Boeing pays special attention to the perfect finish of their products. If Boeing makes one little mistakes, they will lose their reputation and their customers because there are life’s at stake if Boeing allows errors in their production. Furthermore, the time put in the airplanes is significant. The production takes a very long time, therefore, Boeing has to go a while without receiving cash, while spending money on inventory cost etc. The overall cost of an airplane is millions. However, since it is a unique product and quality has to be high, the high prices are justified and being paid by their customers. Also, the price rivalry between Boeing and their competitors is not very high.

3.What supply chain management do they currently have in place?
On September 9th, 2009 Boeing signed a Memorandum of Understanding (MOU) to develop logistic tools for improving global supply chain management. MOU will help to improve efficiency and effectiveness in Boeing’s multibillion-dollar supply chain optimization market. Boeing Company explores opportunities to use the developed Joint Logistics Command and Control Environment (JLC2E) modeling and simulation tool to expand into commercial markets. Boeing's state-of-the-art JLC2E tool allows defense customers to experiment and evaluate supply chain tactics, processes and technologies to support current and future complex defense missions.

Project Planning & Scheduling

Boeing Company assembles airplanes for commercial airlines in addition to many other assemblies such as space shuttles, military airplanes, etc. Building an airplane is an example of a project. First of all it is a unique product. Also, the plane does not get moved until fully assembled. Boeing’s main production facility is located in Everett, Washington. Furthermore, Boeing’s suppliers bring the needed parts and tools to the site so the plane does not have to get moved during its production. All these arguments are proof, of airplanes being a project.
Producing an airplane takes a lot of time and is a very complicated and broad process. The first task in assembling an airplane is to come up with a design and model which have to be broad on paper, the size, features and engine need to be decided on. A budget needs to be established at the same time, Boeing needs to make sure the plans are realistic and meet the budget. The second step is the scheduling, for Boeing this is a major factor to make sure that their airplanes get delivered on time. Different Departments need to be taught which part of the airplane they have to assemble and the deadlines have to be set. The last task is the execution. Boeing employees need to be highly skilled workers to make sure that the job is done quickly and correct. While these three tasks are in process, the operations managers have to keep an eye over the process at all times to control the planning, scheduling, and execution of the airplane to see if the planned implication meets the actual implication regarding money, time, and cost.
Boeing uses the Gantt chart for their projects to show the different tasks and the bar charts needed. According to a Swiss Company called Flex Gantt UI Framework which is a Java planning and scheduling application, Boeing is one of their customers.
Boeing has a big problem with delivering their airplanes on time. Using the Gantt chart is a great way to keep track of the different tasks and the time in which the task are being accomplished. For some reason this system does not seem to work out for Boeing. In assembling an airplane different activities depend on each other and the production cannot move on without different parts are being finished. For example, an airplane body gets assembled in three parts, the front, middle, and back. All three parts need to be assembled together to move on to the next tasks such a interior or painting. The problem with the Gantt chart is that it does only show the different tasks by itself without the relationship to the other tasks. For that reason Boeing will not be able to see why the production is slowing down and more importantly what to improve. Our suggestion would be to import the Network Methods. These methods show the relationship between the different task and Boeing would be able to identify problems and to improve the process.

Managing Quality

1. Identify the 4 dimensions of quality apply to their product or service. Boeing Company’s first dimension of quality that applies to their products is quality of design. Boeing provides its customers with design concepts and specifications of the product or service. For example they provide their customers with a design of the plane that illustrate customer’s specifications such as a commercial airplane that has specific color patterns, entertainment systems etc. Boeing develops a blueprint of the plane; an actual model of the plane to demonstrate its specifications and a bill of materials that will be used in order to manufacture the plane. The Second dimension that Boeing uses is quality of conformance. Boeing is producing various types of airplanes such as commercial airplanes, aerospace ships or military airplanes. Every type of airplane meets the customer’s specification depending on the use of the plane. If the customer is satisfied with the product specification there is a high quality of conformance. Another dimension that Boeing uses is the “abilities”; this includes availability, reliability and maintainability. Boeing’s customers are very strict about availability. The cost of the plane is very high so customers expect to receive quality plane on time. Customers are also very strict about reliability. Reliability reveals plane’s quality and how long the plane will function without any failure. People’s lives could be in danger if the airplane is not reliable and eventually stops working, therefore Boeing has a great responsibility to guarantee reliability. Maintainability in Boeing refers to the customer’s right to consider repairs and maintenance if the product will fail. Customers will expect Boeing to restore the failure by a certain time; they also depend on good customer service when needed. The last dimension that applies to Boeing is field service. Boeing’s customers are provided with warranties and repair services after the plane is sold to them. If the product or service will face any type of failure, Boeing’s customer may rely on warranties and repair services that are provided by Boeing Company. 2. What quality systems do they currently have in place? Recommend some new ideas they should consider.

Boeing uses reliability as a quality system. Boeing and its customers have a contract between each other in which Boeing is asked to provide a promised product or service on time without any errors. Boeing’s customers rely on the product safety because an error could have fatal consequences for everyone involved; Boeing, the customer of the pane such as military or commercial airlines, and especially the passengers of the plane.Boeing should be more realistic about their product and the promised delivery time. At this moment Boeing experience huge delays on 787 Dreamliner series, which cause Boeing’s customers to turn around and choose their competitor Airbus. Reliability definitely should be the number one priority for Boeing but in the process Boeing seems to forget about the availability. A better time management must be considered because the delivery is not just delayed by a month or two. The first flight was supposed to be launched in the fourth quarter of 2008 and at the moment it does not look like it will happen until 2010. Customers rely on Boeing’s promise to have the plane on time and if Boeing is not capable of delivering its product on time, customers will turn around and choose their competitors.

Quality Control

For the company your team has selected, what quality control methods do they currently use? Boeing Company uses continues improvement as a quality control method. They use Pareto analysis as well as the fishbone diagrams in order to find out the cause of the problem. First they look at the report using Pareto analysis to find out what kind of items are defect most. For example, Boeing 777 experiences defects in engines. According to US air safety body, “… 220 airliners [experience] an engine flaw …” A Boeing engine is manufactured by Rolls-Royce; therefore, the manufacturing company is responsible for the flaws in Boeing’s engines. As a result, the quality control department has to go in and check the manufacture, Roll-Royce. They will find the defect which causes the engines to work improperly in cold and icy weather using Fishbone Diagrams. The US safety board states, “[Many problems and incidents with these engines were experienced] within a year, [they believe] that there is a high probability of something similar happening again… [therefore]…the only acceptable solution for this safety vulnerability was to redesign the flawed component in the engine.” According to engine flawed component that caused the problems and fatal crashes, Boeing’s airline customers were forced to ground many Boeings 777. The current problem was solved and the components, in this case fuel/oil heat exchangers, were replaced by heat exchangers which are more tolerant to ice accretion.

What about Six Sigma practices? Recommend some new ideas they should consider.Boeing Company can use Six Sigma practices in order to improve the capability and reduce the defects in any process. Six Sigma practices include the following steps: define, measure, analyze, improve, and control. Boeing should consider defining the project goals and current processes. Operations Managers should collect relevant data and analyze the data which caused the most defects in the system using the Pareto analysis. Boeing should determine and focus on the most defects that verify the cause-and-effect relationship. To improve the process, the operation manager or the operations department should go in the work place, material or tool department etc. and check for any causes of defects. If the operation managers find the problems they should stop the process and resolve the defect before it can result in future defects again. For example, the engine flaw should be analyzed before the process of the engine was finished. Operation managers should go back to analyze the defect, which is the fuel/oil heat exchanger in this case, test it to make sure is tolerant to icy weather, and then continue the process if the exchanger will pass the test. This will improve the process and control the future defects.