Post on 11-Jan-2016
Supply Chain Oversight in Unprecedented TimesSupply Chain Oversight in Unprecedented Times
Wayne BrownDirector, Boeing Commercial Airplanes Supplier QualityThe Boeing CompanyMarch 14, 2011
Presentation ContentPresentation Content ► Unprecedented TimesUnprecedented Times
UpsideUpside DownsideDownside
► Areas of FocusAreas of Focus► Strategies For SuccessStrategies For Success
Presentation ContentPresentation Content ► Unprecedented TimesUnprecedented Times
UpsideUpside DownsideDownside
► Areas of FocusAreas of Focus► Strategies For SuccessStrategies For Success
Unprecedented Times – UpsideUnprecedented Times – Upside Today’s Aerospace Environment Today’s Aerospace Environment
News Headlines
US airline shares up on better economic outlook Reuters News 07/26/2010
Boeing, Airbus score $29 billion at air show Everett Herald 07/25/2010
Boeing predicts a greater need for new passenger jets Everett Herald 07/21/2010
American Airlines orders 35 Boeing jets to upgrade its fleet and phase out gas-guzzling planes
Associated Press Newswires 07/21/2010
Dreamliner lands at Farnborough BBC News 07/18/2010
FedEX looks to 777s to deliver an edge Wall Street Journal 07/14/2010
Boeing 747-8s endure hot weather, top 500 flight hours Seattle Post-Intelligencer 06/29/2010
Boeing to make even more 737s Wichita Eagle 06/16/2010
Unprecedented Times – Unprecedented Times – UpsideUpside
Unprecedented Times – UpsideUnprecedented Times – Upside Strong long-term growth Strong long-term growth
ChallengeChallengess
787 delays
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300%
Sep-02
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ChallengesChallenges
Unprecedented Times – DownsideUnprecedented Times – DownsidePressures Affecting the Supply Pressures Affecting the Supply
ChainChain Production delays have impacted Production delays have impacted suppliers financially and suppliers financially and earningsearnings landscape is mixed landscape is mixed
Dollar depreciation is increasing Dollar depreciation is increasing pressure on revenues for foreign pressure on revenues for foreign supplierssuppliers
Production rate increases on Production rate increases on existing programs and the existing programs and the development of new airplanes development of new airplanes have challenged the supply chainhave challenged the supply chain
Quality and performance issues Quality and performance issues from Partners and major suppliers from Partners and major suppliers have been on the risehave been on the rise
-50%
0%
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150%
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250%
300%
Sep-01
Sep-02
Sep-03
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Sep-05
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A380 delay 787 delay
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250%
300%
Sep-01
Sep-02
Sep-03
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Sep-09
A380 delay 787 delay
Production delays have impacted Production delays have impacted suppliers financially and suppliers financially and earningsearnings landscape is mixed landscape is mixed
Dollar depreciation is increasing Dollar depreciation is increasing pressure on revenues for foreign pressure on revenues for foreign supplierssuppliers
Production rate increases on Production rate increases on existing programs and the existing programs and the development of new airplanes development of new airplanes have challenged the supply chainhave challenged the supply chain
Quality and performance issues Quality and performance issues from Partners and major suppliers from Partners and major suppliers have been on the risehave been on the rise
-50%
0%
50%
100%
150%
200%
250%
300%
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
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Sep-08
Sep-09
A380 delay 787 delay
-50%
0%
50%
100%
150%
200%
250%
300%
Sep-01
Sep-02
Sep-03
Sep-04
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Sep-07
Sep-08
Sep-09
A380 delay 787 delay
Unprecedented Times – DownsideUnprecedented Times – DownsidePressures Affecting the Supply Pressures Affecting the Supply
ChainChain
Production delays have impacted Production delays have impacted suppliers financially and suppliers financially and earningsearnings landscape is mixed landscape is mixed
Dollar depreciation is increasing Dollar depreciation is increasing pressure on revenues for foreign pressure on revenues for foreign supplierssuppliers
Production rate increases on Production rate increases on existing programs and the existing programs and the development of new airplanes development of new airplanes have challenged the supply chainhave challenged the supply chain
Quality and performance issues Quality and performance issues from Partners and major suppliers from Partners and major suppliers have been on the risehave been on the rise
-50%
0%
50%
100%
150%
200%
250%
300%
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
A380 delay 787 delay
-50%
0%
50%
100%
150%
200%
250%
300%
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
A380 delay 787 delay
Unprecedented Times – DownsideUnprecedented Times – DownsidePressures Affecting the Supply Pressures Affecting the Supply
ChainChain
-50%
0%
50%
100%
150%
200%
250%
300%
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
A380 delay 787 delay
-50%
0%
50%
100%
150%
200%
250%
300%
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
A380 delay 787 delayProduction delays have impacted Production delays have impacted suppliers financially and suppliers financially and earningsearnings landscape is mixed landscape is mixed
Dollar depreciation is increasing Dollar depreciation is increasing pressure on revenues for foreign pressure on revenues for foreign supplierssuppliers
Production rate increases on Production rate increases on existing programs and the existing programs and the development of new airplanes development of new airplanes have challenged the supply chainhave challenged the supply chain
Quality and performance issues Quality and performance issues from Partners and major suppliers from Partners and major suppliers have been on the risehave been on the rise
Unprecedented Times – DownsideUnprecedented Times – DownsidePressures Affecting the Supply Pressures Affecting the Supply
ChainChain
Presentation ContentPresentation Content
► Unprecedented TimesUnprecedented Times UpsideUpside DownsideDownside
► Areas of FocusAreas of Focus► Strategies For SuccessStrategies For Success
Areas of FocusAreas of Focus
First Article Inspections (FAI)First Article Inspections (FAI)• Ensure partial (i.e. delta) FAIs are performed for Ensure partial (i.e. delta) FAIs are performed for
any process changes affecting fit, form or any process changes affecting fit, form or function. function.
• Conduct thorough on-site checks of the FAI Conduct thorough on-site checks of the FAI process at critical sub-tier suppliers.process at critical sub-tier suppliers.
Specification ChangesSpecification Changes• Ensure a strong process of frequent checks for Ensure a strong process of frequent checks for
specification changes.specification changes.
Foreign Object DebrisForeign Object Debris• Incorporate both “FOD prevention” and a “clean Incorporate both “FOD prevention” and a “clean
as you go “ approach to FOD. as you go “ approach to FOD.
Areas of FocusAreas of Focus
PlanningPlanning• Ensure any products with customer controlled Ensure any products with customer controlled
planning (such as Process Control Documents) planning (such as Process Control Documents) are clearly identified in the manufacturing are clearly identified in the manufacturing planning so that changes are not made without planning so that changes are not made without customer approvalcustomer approval
Mistake ProofingMistake Proofing• Look for opportunities to mistake-proof Look for opportunities to mistake-proof
operations. For nearly symmetrical parts, pursue operations. For nearly symmetrical parts, pursue a “mistake proofing” approach to product a “mistake proofing” approach to product design/marking to ensure correct application and design/marking to ensure correct application and installation.installation.
Quality ControlsQuality Controls• Ensure strong Quality controls over any operator Ensure strong Quality controls over any operator
verification programs (i.e., manufacturing self-verification programs (i.e., manufacturing self-inspection).inspection).
Areas of FocusAreas of Focus
Special ProcessorsSpecial Processors• Verify processes are in place to ensure work Verify processes are in place to ensure work
coming in from special processors is to the coming in from special processors is to the correct specification and that the processor is in correct specification and that the processor is in good standing.good standing.
ContractingContracting• Check that thorough contract reviews with sub-Check that thorough contract reviews with sub-
tier suppliers to ensure that they understand tier suppliers to ensure that they understand requirements. Consider contract language requirements. Consider contract language requiring sub-tier suppliers to notify you when requiring sub-tier suppliers to notify you when any of their sources are changed. Check that any of their sources are changed. Check that there is complete understanding of contract there is complete understanding of contract language, both internally and externally.language, both internally and externally.
TrainingTraining• Ensure new employees, or employees doing new Ensure new employees, or employees doing new
work, receive all the training needed to perform work, receive all the training needed to perform their work flawlessly – the first timetheir work flawlessly – the first time
Presentation ContentPresentation Content
► Unprecedented TimesUnprecedented Times UpsideUpside DownsideDownside
► Areas of FocusAreas of Focus► Strategies For SuccessStrategies For Success
Strategies For SuccessStrategies For Success
► Back to basicsBack to basics
► Evaluate new techniquesEvaluate new techniques
► Work with industryWork with industry
► Company focus on qualityCompany focus on quality
Back to BasicsBack to Basics
► Enhanced communicationEnhanced communication Take ownership for our Take ownership for our
contributions to supply contributions to supply chain quality failureschain quality failures
► Focus on training and Focus on training and skillsskills Root cause analysisRoot cause analysis Inspection techniques: the Inspection techniques: the
fundamentals and beyondfundamentals and beyond
► Increased attention on Increased attention on sub-tier supply chainsub-tier supply chain
► Strengthen oversightStrengthen oversight Delegation vs In House Delegation vs In House
InspectionInspection R/ISupplier Boeing
Delegated
InspectionS/I
New TechniquesNew Techniques
► Component reliabilityComponent reliability
► Systemic improvementSystemic improvement Root cause -vs- reactiveRoot cause -vs- reactive
► Predictive IndicatorsPredictive Indicators
► Risk-based oversight Risk-based oversight assessmentsassessments
► Supplier Oversight Supplier Oversight Technical AssessmentsTechnical Assessments
SOTA
Continue Working With IndustryContinue Working With Industry
Mission: Ensure supply chain compliance Ensure supply chain compliance
and conformance of purchasedand conformance of purchased products and servicesproducts and services
throughout the product life cyclethroughout the product life cycle
Renewed Company Focus on QualityRenewed Company Focus on Quality
Mission: Ensure supply chain compliance Ensure supply chain compliance
and conformance of purchasedand conformance of purchased products and servicesproducts and services
throughout the product life cyclethroughout the product life cycle
Renewed Company Focus on QualityRenewed Company Focus on Quality