Boeing looks at improving 737 production rate efficiency

Boeing is considering how to make the already-lean 737 production line even more efficient with an eye toward increasing rates beyond 42 per month, the commercial airplane division CEO said today.

Jim Albaugh, speaking at the annual Credit Suisse Aerospace conference, said the demand is here for a higher rate.

“We went into this year wanting to reduce the backlog and we failed miserably,” he said, referring to record orders and commitments for the 737NG and 737 MAX.

The challenge of going higher is that the Renton 737 plant is nearing capacity. A solution may be to further increase efficiency of the facility.

“If you go back two years with the 777 program, the maximum rate we had was seven per month in the factory.  With lean manufacturing and engineering, we were able to take that up to 8.3 per month with very insignificant investment. It is my hope that as we continue to lean-out the 737 program, we could be in a similar position where we can go even higher than 42 if we chose to,” Albaugh said.

“We don’t have to make a decision on going higher than 42 for a while. We’re going to go to 42 in 2013. We’ll look at the market, we’ll look at the demand…and probably in late 2012, late 2013, if we can go higher we’ll make that decision.

“The other thing that we have to do is really think about how we transition from the 737NG to the 737 MAX. Regardless as to where we are going to build the 737 MAX, you don’t want to get into a situation where we aren’t delivering narrowbodies. We have to build a bridge to the 737 MAX.”

The 42 rate is sustainable, Albaugh said. “As we look at the skyline, the demand is there. We’re basically sold out through 2015. We can sustain them.”

Where will MAX be built?

“We are looking at quite a number of things. We’re taking a long-term view of what makes sense. How complicated can we be. The business climate. The environment. The assurity of delivery. We’ll make a decision when we have the facts.”

12 Comments on “Boeing looks at improving 737 production rate efficiency

  1. With AA now in bankruptcy and wanting to shed itself of all those MD-80s and B-757s, It seems they would applaud Boeing going to 42+ B-737NGs per month. AA needed those new airplanes yesterday.

  2. Interesting that it is still about where will the MAX have its assembly line.

    The MAX is (currently) a minimum change over the NG.

    What Boeing actually says is that they want to move the main 737 line elsehwere.

    • “What Boeing actually says is that they want to move the main 737 line elsewhere?”.

      Yes, Wichita, Kansas would be a nice place!

      • The B-737 fuselage is already made in Kansas and I doubt that will change. Perhaps the FAL could be in Texas or South Carolina? KS will get the KC-46 modification work.

  3. KC135TopBoom :
    The B-737 fuselage is already made in Kansas and I doubt that will change. Perhaps the FAL could be in Texas or South Carolina? KS will get the KC-46 modification work.

    Is the fuselage or sections thereof “prestuffed” ?

  4. The difference between the NG and the MAX, essentially being nothing more
    than the engine and thus NOT taking any more space on the production line,
    why can’t we all put up a big fight for those production-workers in Renton, who
    have for decades AND generations, produced the finest and all-time winner in
    the medium-range aircraft category of aircraft?

    Furthermore, these gents and woman in Renton, will be building 737NGs at a
    record rate thru 2016/18, so why shouldn’t they be the ones to continue to do
    so with the MAX AND keep the massive amount of talent where it is and
    continue to be rewarded for doing a fantastic job!

    • Those are fair questions, Rudy. But Boeing must look to see if they can reduce the production costs of the B-737MAX to be even lower than the costs to produce the B-737NG in Renton.

      I understand Boeing has some issues with the City of Renton itself, these will have to be ironed out before Boeing can commit to another production line (if that is what the need to produce the MAX) in Renton.

      Once all the legal mumbo-jumbo is translated from today’s IAM/Boeing agreement to extend the current contract, we may have a clearer picture of where the MAX will be built.

      I know the workers in Renton produce quality work. Before there was the B-737-100, they produced many of the KC-135s and B-707s there. They may have also built some of the B-727s there, too, but I am not sure about that.

      The very first KC-135A (tail # 55-3118) off the line was christened “The City of Renton” by Boeing and SAC.

  5. In this debate we must keep the perspective of Richard Aboulafia’s metaphor on Dorian Gray. RA invites us to be cautious. There might be something like a Commercial Aviation Bubble out there. In the process of wanting to increase the cash flow, Boeing might end up loosing the little they have. And that applies to Airbus as well.

  6. The announcement, came IAM/Boeing agreement to extend the current
    contract, came after I made my earlier comments, but that only makes the
    case for keeping the Renton plant AND the experienced team together and
    continue building the MAX indefinitely!

    NOT doing so and starting a new plant with new people somewhere else,
    would not only be an enormous waste of experience, talent and loyalty, it
    would be another example of several unexplained and apparently unjustified
    “moves” by Boeing Management over the past 10 years or so:
    1. To move it’s Headquarters to Chicago,
    2. Not to explore the highly efficient Blended-Wing-Body concept more
    aggressively as a T/T aircraft for the US Airforce, which showed consider-
    able interest, after having inherited the very promising concept “free of
    charge,” from MDD and submitting the 767 based T/T instead,
    3. Opening a second 787 production-line in S. Carolina, for reasons reported
    to be other than available space and manpower in the Puget Sound area.

    Hopefully, the IAM/Boeing agreement announced today, will once and for all
    kill any further ideas of building the 737MAX, no-where else, but Renton!

  7. Rudy, the USAF specified an “off the shielf” airplane already in production for the KC-X program. While I agree, the BWB design would be superior, the USAF wanted an exsisting airplane. That is why the B-767, B-777, B-747, A-330, and A-340 were all originally considered. The two major OEMs finalized their choices on the B-767 and A-330.

    Boeing has considered the B-767 for the replacement tanker since the mid 1990s, although back then they were hoping to use the B-767-300ER, not any version of the B-767-200ER (before finalizing on the new B-767-2C).

  8. KC135: I was not aware of the “off the shelf” requirement and thus wonder why
    Boeing continued to work on and maintain close contact with the US Airforce,
    with the BWB concept, all during the T/T evaluation period?

    I omitted one and probably that the greatest failure by Boeing Management
    during the past decade or so, was committed by the Stonecipher, Mulally and
    M. Bear team, when they decided to “outsource” the 787 program on a large
    scale,TO SAVE MONEY, in spite of the repeated warnings NOT to do so, from
    Dr. Hart-Smith at the MDD and subsequently, the Boeing Phantom Works in LA!

    Dr. Smith, while still at MDD, had written a detailed report, confirming that MDD
    had gone bankrupt on the MD-30 and MD-11 programs, BECAUSE OF excess-
    ive outsourcing.
    Mr. Harry Stonecipher in particular, should, therefore, have know better, after
    becoming the Boeing CEO after the merger, when he not only rejected the
    Hart-Smith recommandations NOT to outsource the 787 program again, he act-
    ually fired him, when Hat-Smith urged him again and again, NOT to outsource
    the 787 program! The rest, as they say, IS HISTORY!

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