Supply Chain Required to Support the Manufacturing of Boeing Commercial
Aircraft
The supply chain required to support the manufacturing of Boeing commercial
aircraft involves the application of lean technique whose aim is to reduce the cost of
production by enhancing not only the suppliers’ network but also the process of
manufacturing using modern technology. This is achieved by reducing wastes, which
include space, equipment, labor, and even capital. An improvement in the supply chain
would facilitate cost reduction opportunities and lead time savings. Therefore, the supply
process for Boeing commercial aircraft involves orders by channel, order fulfillment,
facilities, customer, and suppliers. In the manufacturing sector, the process mainly
focuses on the facilities and suppliers (Cismeci, 2005).
Boeing as a manufacturing company in the aerospace industry has four facilities
in the United States. Three facilities are responsible for the assembling of necessary
materials and airplane's parts that are manufactured by suppliers and one facility deals
with the manufacturing of the aircraft parts done by Boeing itself. Supplies to Boeing are
divided into three groups, which include aero-structures, engines, and avionics. Aerostructures are important in the formation of aircraft visible frame, they include fuselages,
which are the nose, pin, tailplane, elevators, rudder, and barrel section, wings, and
landing gears. Suppliers in this sector are classified according to tiers, higher tiers
suppliers who supply to the manufacturing company thus, reducing the costs to be
incurred by Boeing at the time of lead design and assembly. The lower tier suppliers who
supply, the higher tier suppliers, for example in the manufacturing of 787 aircraft, 30 Tier
1 suppliers were used to facilitate the process, using tier 2 and tier 3 suppliers (Nolan,
2012).
Boeing does not manufacture engines, but they have four different certified
suppliers. Therefore, giving their customers an opportunity to decide which company
should supply engines to the specific aircraft they want to be manufactured. On the other
hand, Boeing has the capability of manufacturing avionics for its commercial aircraft.
Thus, Boeing doesn’t only rely on its ability to manufacture avionics but also relies on
some suppliers in case it cannot achieve its desired outcome. It also outsources avionic
suppliers in case its client wants to select a specific supplier for the avionics (Cismeci,
2005).
Supply Chain Required for Boeing Commercial Aircraft to be delivered to the
Customer
The supply chain required to deliver the aircraft to the customer involves orders
by channel, order fulfillment, and customer services. Boeing target customers are the
leasing and airline companies. Therefore, supply chain process begins with the airline and
leasing companies giving orders to the manufacturing company (orders by channel). Note
that, Boeing only manufacture aircraft according to the order given, this is because of the
cost incurred in the manufacturing process. Order fulfillment is the next step in the
supply chain. Therefore, Boeing set delivery lead-time, a period that it requires to
manufacture the given order and deliver the products to its customer (Cismeci, 2005).
Using the lean technique, Boeing uses a supply chain process that involves all the
stakeholders including the customers in integrating the designs to be produced thus,
resulting in the manufacturing of high-quality planes, and appropriate after-sale services
to the customer enhancing customer satisfaction and trust. The process involves customer
management, which is classified according to the need and demands of the customer.
Therefore, customers are managed according to how they operate, either as large
commercial airline, national airline, large, low-cost airline or small to medium airline.
This enables Boeing to easily negotiate with the customer and offer their best options
hence winning customer trust and satisfaction (Nolan, 2012).
Boeing offers after-sale services to its customer for many years after
manufacturing the given order. This is achieved by Boeing directly giving out the
services or indirectly by assigning another company to offer the services. The United
States civil aviation organizations are responsible for the certification of the companies
offering after-sales maintenance, thus, ensuring quality products and minimizing accident
occurrence (Cismeci, 2005).
Systems in Place to Manage for the Reliability of the Supply Chain
Boeing as a commercial aircraft manufacturing company has a strategy and an
operational model that enhances the reliability of its supply chain process. Its strategy
aims at making Boeing a large-scale manufacturing company which can produce the best
quality aircraft using modern technology and utilizing the best world aeronautical
engineers, and at the same time to be cost-effective and affordable. Boeing uses an
operational model that is flexible thus, can be altered according to the needs and the
indicators sent by its supply chain. This company is able to lower the costs of scheming
airplane components, by giving the role to its competent suppliers, it also has a risk or
reward system that covers its suppliers, therefore, making it more elastic in the bargain
and price intervention deals. The company has a developed sales and marketing
committee that ensures quality after-sales services are offered to all its customers
worldwide and at the right time (Nolan, 2012).
Another system in place that enhances the reliability of Boeing supply chain
network is the use of an integrated electronic information and technology system. Boeing
develops a baseline data set, using information obtained from suppliers, which is
provided to the airline purchasing the airplane in an electronic form. Using this
technology, the company is able to provide airlines with the necessary assistance needed
at any given time, thus providing a reliable supply chain process (Rencher, 2009).
References
Cismeci, D. (2005). An Examination of Boeing's Supply Chain Management Practices
Within The Context of the Global Aerospace Industry. US: Massachusetts Institute
of Technology.
Nolan, L. R. (2012). Ubiquitous IT: The case of the Boeing 787 and implications for
strategic IT research. Journal of Strategic Information systems, 21, 91-102.
doi:10.1016/jsis.2011.12.003
Rencher, R. (2009). Integrated IT for improved Airplane Support. US: Boeing .
Retrieved March 19, 2018, from www.boeing.com/commercial/aeromagazine
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