The latest issue of Boeing Frontiers, the company magazine, spotlights the Lean Production line for the 777. This follows the years-long conversion for the 737 line.
We have always felt these Lean Production methods are one of the secrets to Boeing’s success since implementation following the production debacle in 1997. Boeing is going to adopt a Lean Production Line for the 767, which will enable the company to offer the Pentagon better pricing for the KC-X tanker bid. We wrote about this in a previous post.
Boeing’s long shift to Lean Production has been one of the things that’s helped Boeing maintain profits and cash flow during the long delays of the 787 and 747-8. The 737 and 777 lines have been keeping Boeing Commercial Aircraft afloat. Even aerospace analysts seem to overlook the importance of the Lean lines, having written about them in the past and then moved on–even though this has been a continuing effort by BCA to improve efficiencies on the 737 line and expand it to the 777 and now the 767 lines.
While Boeing Corporate has placed its bests on the 787 production model, and continues to maintain that this is the way of the future even as major changes are being made to it, we think the Lean lines are fundamentally more important.
There is no question that outsourcing to China, India and Russia is less expensive on cost, but quality often remains a challenge. (We certainly suggest that outsourcing to Japan and Italy aren’t less cost, and Italy’s Alenia continues to be a problem for the 787 line.)
American wages and benefits have more cost than some non-US venues, and labor relations, particularly with the IAM need significant improvement (on both sides of the ledger), but it’s also clear that SPEEA and the IAM 751 have been called upon to save the 787 and 747-8 programs. And, as IAM 751 likes to point out, its members are producing 31.5 737s a month (plus five 777s), providing the profits for BCA in the process.
It’s also worth noting that Airbus, which in some respects has more efficient lines than Boeing, nonetheless wants to increase its US dollar cost-based footprint by building the KC-30 tanker and A330-200F freighter in Mobile (AL). We raise this point because we have long been concerned about the outsourcing of Western aerospace technology to China, Russia and Japan by the incumbent Big Four airframe OEMs.
But getting back to Boeing and its Lean lines, the mainstream media and the aerospace analysts should pay more attention to this. It remains a key component to the Boeing success story.