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Boeing Live Event Coverage

Seattle Times aerospace reporter Dominic Gates covers top industry events to bring you the latest news, highlighting how it impacts Boeing and its competitors.

July 12, 2012 at 5:20 PM

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Supply chain changes keep more 787 assembly work local. Further change for next new Boeing plane.

corrected version*

2012 Stan Deal.jpgTweaks to the 787 supply chain this year mean that work once earmarked to be done overseas is now permanently assigned to Boeing's final assembly lines in Everett and North Charleston.

It's a dynamic that will be even more apparent on Boeing's next new major airplane program, according to Stan Deal, the Boeing executive in charge of the entire commercial airplanes supply chain (right, my photo).

"There has been a shift of view, of philosophy," Deal said.

FACC, an Austrian company that makes high-end composite parts, supplies spoilers for the 787 wings. Chief executive Walter Stephan said that in the original Boeing global supply plan, FACC was to send its part to Boeing Australia, which would add it onto the trailing edge of the wing.

That never worked out. For efficiency, FACC ended up sending the parts directly to the final assembly site in Everett.

About six months ago, FACC's part of the supply chain was restructured to make that permanent. Workers in Everett or North Charleston will continue to attach the spoilers to the wings.

Similarly, KAL, the manufacturing division of Korean Airlines, makes a fairing -- a cover -- for the tracks that move the wing flaps. Stephan said that too has been going directly to Everett or North Charleston, not to Australia as originally planned. And in future, it'll stay that way.

2012 Walter Stephan.jpg"It was a very successful restructuring," said Stephan at the Farnborough Air Show. "We are quite happy seeing this change."

(Right, Stephan inside the Irkut MS-21 cabin mock-up at Farnborough. My photo.)

Stephan said further such restructuring is in the works affecting composite panels FACC sends to Tulsa, Okla., where they are attached to the fixed leading edge of the wing, which is then sent to Japan.

Eventually, Stephan said, those panels will go directly to Everett and North Charleston.

These and similar tweaks to the supply chain have more than doubled the base of direct suppliers of 787 airplane structure, which previously consisted of only Mitsubishi, Kawasaki, and Fuji of Japan; Alenia of Italy; and Spirit Aerosystems of Wichita, Kan.

The original 787 supply chain concept was to have an exclusive small set of major partners building complete pieces, with all the smaller suppliers sending parts to them.

The restructuring represents a significant shift in Boeing's approach since then. It turns out to be more efficient to have a broader base of suppliers sending parts directly to Boeing.

And this shift will be implemented to a greater degree on future new jets.

Deal, vice president and general manager of Supply Chain Management and Operations for Boeing Commercial Airplanes, also speaking at Farnborough, said the changes at FACC, KAL and others represent efficiency tweaks that go on regularly either to reduce cost or to reduce the number of days needed to do a specific job.

For future planes, expect such changes to be built in from the start.

Deal contrasted the 787 supply chain model with the 777 program in the mid-1990s, the last new airplane program before the Dreamliner. On the 777, there were many more suppliers sending many more pieces to be installed in Everett.

On Boeing's next new airplane program, Deal said, "when you need a brand new supply chain, the dial will turn back somewhere between where we were on the 777 and the 787 today."

Apart from the efficiency gains in this supply chain restructuring -- which come from cutting out the transportation of parts all over the globe like an airline's lost baggage and instead sending them directly to the final destination - there is another philosophical shift in play.

Deal said that the change also reflects Boeing's stated desire to do more work in-house rather than outsourcing it.

For Boeing to keep its edge as a manufacturer, he said, "we have to probably be intimate with the production as well as the design."

"As we unfold the next new major airplane program, you'll see capabilities that perhaps were out in the supply chain on the 787 being done by us as Boeing," Deal said.

Both these shifts in thinking point to more work on the final assembly lines in future.

It's good news for Boeing's production workforce, whether in Everett or in North Charleston.

This story has been corrected.
The earlier version incorrectly stated that the work of assembling the FACC spoiler and the KAL flap track fairing onto the 787 wing had previously been done overseas.
That had been the original Boeing global supply plan, but for efficiency these parts had in practice been going directly to Everett. The supply chain restructuring makes that permanent.
The example of the FACC fixed leading edge panels has been added as an example of work currently going to an external supplier that Boeing intends to bring in-house.


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