The Boeing Company, headquartered in Chicago, Illinois, is one of the two major producers of aircraft in the global market. The other major producer is European Airbus. Boeing produces three models in Everett, Washington: 747s, 767s, and 777s. The planes are all produced in the same building. At any one time, there may be as many as six planes in various stages of production. Obviously, the building has to be fairly large to accommodate such a huge undertaking. In fact, the building is so large that it covers over 98 acres and it is four stories high, making it the largest building by volume in the world. It is so large that all of Disneyland would fit inside, and still leave about 15 acres for indoor parking! The windowless building has six huge doors along one side, each about 100 yards wide and 40 yards high (the size of a football field)—large enough to allow a completed airplane to pass through. Boeing sells airplanes to airlines and countries around the globe. There isn’t a set price for the planes; the actual price depends on what features the customer wants. Once the details have been settled and an order submitted, the customer requirements are sent to the design department. Design Designers formerly had to construct a mock-up to determine the exact dimensions of the plane and to identify any assembly problems that might occur. That required time, materials, labor, and space. Now they use computers (CAD) to design airplanes, avoiding the cost of the mockups and shortening the development time. . The parts with the highest priorities are assigned to expediters who determine the best way to replace the part. The expediters keep track of the progress of the parts and deliver them to the appropriate location as soon as they arrive. In the meantime, a portion of the work remains unfinished, awaiting the replacement parts, and workers complete other portions of the assembly. If the supplier is unable to replace the part in a time frame that will not seriously delay assembly, as a last resort, Boeing has a machine shop that can make the necessary part. The partially assembled portions of the plane, and in later stages, the plane itself, move from station to station as the work progresses staying about five days at each station. Giant overhead cranes are used to move large sections from one station to the next, although once the wheel assemblies have been installed, the plane is towed to the remaining stations. Finished planes are painted in one of two separate buildings. Painting usually adds 400 to 600 pounds to the weight of a plane. The painting process involves giving the airplane a negative charge and the paint a positive charge so that the paint will be attracted to the airplane. Testing and Quality Control Boeing has extensive quality control measures in place throughout the entire design and production process. Not only are there quality inspectors, individual employees inspect their own work and the work previously done by others on the plane. Buyers’ inspectors also check on the quality of the work. Boeing wants to reduce the time that a plane spends at each work station from 5 days to 3 days, a reduction of 40 percent. Not only will that mean that customers can get their planes much sooner, it will also reduce labor costs and inventory costs, and improve cash flow. One part of this will be accomplished by moving toward late-stage customization, or delayed differentiation. That would mean standardizing the assembly of planes as long as possible before adding custom features. This, and other time-saving steps, will speed up production considerably, giving it a major competitive advantage. It also wants to reduce the tremendous amount of inventory it carries (a 747 jumbo jet has about 6 million parts, including 3 million rivets). One part of the plan is to have suppliers do more pre-delivery work by assembling the parts into kits that are delivered directly to the staging area where they will be installed on the aircraft instead of delivering separate parts to inventory. That would cut down on inventory carrying costs and save time. Boeing is also hoping to reduce the number of suppliers it has,and to establish better links and cooperation from suppliers. Currently Boeing has about 3,500 suppliers. Compare that with GM’s roughly 2,500 suppliers, and you get an idea of how large this number is. 1- Analyze Boeing strategy in the location selection and layout of the venue where the airplanes are manufactured 2- What is the type of inventory management does Boeing embrace? How does Boeing manage its inventory? Why it is important to manage inventory? 3- Describe and critique the company’s strategy to overcome delays in manufacturing. 4- What other strategies Boeing is planning to implement to cut cycle times?
The Boeing Company, headquartered in Chicago, Illinois, is one of the two major producers of aircraft in the global market. The other major producer is European Airbus. Boeing produces three models in Everett, Washington: 747s, 767s, and 777s. The planes are all produced in the same building. At any one time, there may be as many as six planes in various stages of production. Obviously, the building has to be fairly large to accommodate such a huge undertaking. In fact, the building is so large that it covers over 98 acres and it is four stories high, making it the largest building by volume in the world. It is so large that all of Disneyland would fit inside, and still leave about 15 acres for indoor parking! The windowless building has six huge doors along one side, each about 100 yards wide and 40 yards high (the size of a football field)—large enough to allow a completed airplane to pass through. Boeing sells airplanes to airlines and countries around the globe. There isn’t a set price for the planes; the actual price depends on what features the customer wants. Once the details have been settled and an order submitted, the customer requirements are sent to the design department. Design Designers formerly had to construct a mock-up to determine the exact dimensions of the plane and to identify any assembly problems that might occur. That required time, materials, labor, and space. Now they use computers (CAD) to design airplanes, avoiding the cost of the mockups and shortening the development time. . The parts with the highest priorities are assigned to expediters who determine the best way to replace the part. The expediters keep track of the progress of the parts and deliver them to the appropriate location as soon as they arrive. In the meantime, a portion of the work remains unfinished, awaiting the replacement parts, and workers complete other portions of the assembly. If the supplier is unable to replace the part in a time frame that will not seriously delay assembly, as a last resort, Boeing has a machine shop that can make the necessary part. The partially assembled portions of the plane, and in later stages, the plane itself, move from station to station as the work progresses staying about five days at each station. Giant overhead cranes are used to move large sections from one station to the next, although once the wheel assemblies have been installed, the plane is towed to the remaining stations. Finished planes are painted in one of two separate buildings. Painting usually adds 400 to 600 pounds to the weight of a plane. The painting process involves giving the airplane a negative charge and the paint a positive charge so that the paint will be attracted to the airplane. Testing and Quality Control Boeing has extensive quality control measures in place throughout the entire design and production process. Not only are there quality inspectors, individual employees inspect their own work and the work previously done by others on the plane. Buyers’ inspectors also check on the quality of the work.
Boeing wants to reduce the time that a plane spends at each work station from 5 days to 3 days, a reduction of 40 percent. Not only will that mean that customers can get their planes much sooner, it will also reduce labor costs and inventory costs, and improve cash flow. One part of this will be accomplished by moving toward late-stage customization, or delayed differentiation. That would mean standardizing the assembly of planes as long as possible before adding custom features. This, and other time-saving steps, will speed up production considerably, giving it a major competitive advantage. It also wants to reduce the tremendous amount of inventory it carries (a 747 jumbo jet has about 6 million parts, including 3 million rivets). One part of the plan is to have suppliers do more pre-delivery work by assembling the parts into kits that are delivered directly to the staging area where they will be installed on the aircraft instead of delivering separate parts to inventory. That would cut down on inventory carrying costs and save time. Boeing is also hoping to reduce the number of suppliers it has,and to establish better links and cooperation from suppliers. Currently Boeing has about 3,500 suppliers. Compare that with GM’s roughly 2,500 suppliers, and you get an idea of how large this number is.
1- Analyze Boeing strategy in the location selection and layout of the venue where the airplanes are manufactured
2- What is the type of inventory management does Boeing embrace? How does Boeing manage its inventory? Why it is important to manage inventory?
3- Describe and critique the company’s strategy to overcome delays in manufacturing.
4- What other strategies Boeing is planning to implement to cut cycle times?
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