Feb. 11, 2016, © Leeham Co. “We bought more than $40bn worth of stuff from suppliers last year. We delivered 762 airplanes last year and we could not have done that without the suppliers.
“We’re going through a shift…and through a global dogfight,” Kent Fisher, VP-GM of Supplier Management or Boeing, told the Pacific Northwest Aerospace Alliance (PNAA) conference today.
The supply chain and the company have to work together and collaborate with an exchange of ideas—not ideas coming only from Boeing down to the supply chain.
Suppliers and Boeing have to work together to improve capacity and capability, automation and production rate increases, said Fisher, while maintaining quality.
“We’ve been very successful,” he said, though he said that quality can be improved. He also said cost reductions are necessary and new designs must have value that customers will pay for.
Fisher cited JAMCO, a major supplier in Japan, that increased floor space by 50% and increasing the flow “without missing a beat” in delivering interiors products.
GKN, a European supplier, produces the Advanced winglet on the 737 MAX, was also cited for its quality.
Partnering for Success was launched four years ago. “Frankly, we made a mistake,” Fisher said. But it’s not what the first thought that might come to mind—that the program itself was a mistake—but rather, leaving the impression that there was a finish line.
Fisher said PFS 2.0 is underway to pursue a more-for-less strategy, an “enduring reality, capturing opportunities throughout the life cycle.”
“I want to double down and achieve first-time quality,” Fisher said. If quality is improved by 50% the first time, profits improve by 10%.
In 2012 Boeing implemented only $60m in cost reduction costs. Today it’s $1bn. It took 600 days to implement cost reductions in 2012. Today, it’s closer to 90 days, Fisher said.