Oh Noes! Boeing Haz Supply Chain Woes?

Posted on 8 Aug 2008 by The Manufacturer

Laughter is good for us, says Jon Miller, even though sometimes we laugh because of pathos more than humor. So it is with news that "Lack of Seats, Galleys Delays Boeing, Airbus" from today's Wall Street Journal...

Airbus and Boeing Co. have both struggled with complex technology and assembly issues that have delayed ambitious new jet models. Now the manufacturing rivals face a more basic problem with the production of their existing planes: a shortage of less-advanced equipment such as seats, toilets and galleys that is slowing down their assembly lines.

Boeing’s supply chain issues were never a technology issues, though there may be technical issues to be expected with the launch of such a wonderful new product as the 787 Dreamliner. No, it is a strategy issue. Boeing can blame the poor execution on their suppliers, but that train was set in motion long ago when Boeing decided it was best to do as little as possible in their factories, and to make the parts cheaply more far away. Lean supply chain: ur doin it wrong.

Boeing decided that the design and final assembly of aircraft were their core competencies. To succeed at having final assembly as a core competency, you have to be really good at having no part shortages, no defective parts found at assembly and no reworking or modifying of parts at point of assembly. This requires being very good at supply chain and logistics. However, there really is no such thing as supply chain and logistics. There is supplier development and there is fire fighting. Most companies have a sophisticated form of the latter.

Suppliers, like your people, are strategic assets to be developed and closely guarded over the years. They become costs only when you think of them and treat them as such. You get what you wish for, in droves, as Boeing is learning. When you think and treat your supply chain as an asset, like Toyota does it’s supplier partners and its people, these assets repay you generously.

Kevin Meyer at the Evolving Excellence blog pointed out a great article which incorporates a review of Bill Waddell’s book The Rebirth of American Industry, at the Mutualist Blog. Under a heading in the article of The Sloan System on Production Workers as “Direct Cost”, there is an interesting set of stories on what happens when people are treated as costs and not as assets. The whole article, though long, is worth a read.

By Jon Miller

Article originally posted to Jon’s Gemba Panta Rei blog – here.

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