Suppliers on the 787 program are not just being consulted on
how to improve the current systems or components they provide. They are sharing
risk by participating early on in the design-build process to ensure the best
design is used from the start.
Boeing decided to significantly change its supplier
involvement in the 787 program. Instead of simply consulting them, Boeing
required its suppliers to share risks. In order to use the best design,
suppliers actively participate in the design-build process, meaning that they
were involved in the conceptualization, joint development and detailed design.
All the new ideas for systems and structures were considered during the
conceptualization phase. Then, Boeing selected a small number of suppliers for
the
joint development phase. This dozen of suppliers assumed a
greater responsibility than on previous new airplane projects, they became real
partners. For instance, Goodrich collaborated on the development process of the
787 nacelle and thrust reverser system. Usually, such a development process
implies the competition of a large number of people including independent
designers and competitors. The usual development process often leads to design
iterations. Instead of this, Goodrich, Boeing and others designed the 787
nacelle as a team. Then, all team members stepped back and competed normally to
win the contract.
In order to improve its supply chain efficiency, Boeing
heavily reduced its core supply base (79 percent) and increased business with
high-performing suppliers. The number of Boeings suppliers has dropped from
more than 30,000 in 1998 to 6,450 now. These 6,450 suppliers are based in more
than 100 countries. 86 percent of the purchase and change orders transactions
are conducted through eBuy. The system delivers more than 360,000 transactions
a month electronically.
Considering the relationships strengthening and the evolution
of supply chains, prime contractors focus on larger-scale assembly integration.
As they share risk, support the product throughout its life cycle and focus on
innovation and improvement, suppliers are becoming real partners, they are no
more subordinates.
· The new supplier model:
They are many reasons to move to a new supplier model.
Firstly, Procurement costs represent a high percentage of the sum spent on the
aircraft building. Consequently, the money saved in Procurement costs can be
invested in new products and services.
Second of all, better asset use by Boeing and its suppliers
is highly valuable. As a matter of fact, owning and operating facilities, which
works at reduced capacities is completely inefficient and out of sense. That is
the reason why letting the suppliers operate can be the best solution.
Therefore, it allows Boeing to invest in new technologies and its suppliers to
become strong community leaders
Thirdly, it is obvious that working with only the best
suppliers allows to maximize opportunities to consolidate work with them.
Boeing ensures the highest quality and lowest units costs that can be passed
along to the customer.
The shift in the supplier role allows Boeing to move up the
value stream by focusing on the customer voice and requirements, the airplane's
overall design, architecture and integration and then on final assembly and
delivery. Managing an efficient and responsive supplier base allows Boeing to
improve the quality and safety of the products delivered. In addition, these
products are less expensive.
Lean Supply Chain does not only concern manufacturing. It
should be applied to the whole product life cycle from raw materials to the
fleet deployment. This Lean Supply Chain dynamic implies trust between true
partners. It means that Boeing must sometimes transfer a core competency to its
suppliers, which can do it as well as Boeing and even more better. In order to
remain competitive, Boeing depends upon one healthy supply chain indeed. As the
supplier becomes an integral part of the design and production process, Boeing
and its supplier share a common destiny. Boeings success is fundamentally
linked to how well it works with its suppliers.
