March 20, 2018, © Leeham News: As Boeing builds the business case for the New Midrange Airplane (NMA, or 797), dozens of major factors come into play, along with the hundreds or thousands of smaller one.
The market demand, of course, is a well-known business case element.
So is price to the customer, the design and capabilities of the airplane, the engines and the technology of them, whether there will be a sole- or dual-source engine, where the airplane will be assembled and how it will be produced.
One Boeing official told LNC that the 797 is as much about production as it is everything else. This goes to cost and cost goes to pricing.
Automation, robotics, digital design, 3D printing and additive manufacturing are key to producing the 797. Many elements are already in place on other Boeing programs, most described in the media already.
One key supplier is Dassault Systemes.
“The mandate for market competitiveness is pretty aggressive,” says Michel Tellier, VP of Aerospace & Defense. “That’s not just non-recurring costs, it’s also recurring costs that are most influenced by the production capabilities.”
The target sale price for the NMA is between $65m-$75m, according to lessor Air Lease Corp, Boeing and others.
Tellier, mindful of proprietary issues, declined to outline how Boeing might achieve a cost basis that will allow a sales price in this range. He said that from a broad and general perspective, Boeing fundamentally wants technology across the board to rebuild their digital infrastructure.
“They want to have a digital infrastructure that allows them to develop from planning through production. Boeing is a strong believer in continuous improvement, progressive improvement,” Tellier said. “The only way this works is (A) the experiences you learn you can contextualize against what you said you were going to do; and then you have the flexibility to act upon it.
“The flexibility to act on it really means it comes down to an affordability equation. ‘I have an idea here that will take 10 cents out of this part, or $10,000 out of this process,’” he said. It could also be taking weight out of parts.
“If each one of those opportunities is too expensive to implement, none of them will be implemented.” There are “parking lots” at aircraft manufacturers where ideas sit because the cost to implement is too high.
Tellier said Dassault Systemes is a supplier to several aircraft manufacturers, including Boeing and Airbus.
“You really need to take the cost barrier down quite significantly to make all of that continuous improvement affordable,” he says. “I think Boeing came to the realization that current course and speed or tuning different parts of the business separately wasn’t going to work. That’s when they created this second century strategy.”
Indeed, Boeing CEO Dennis Muilenburg alluded to the second century in a 2016 speech.
“To achieve these lofty goals in our second century, we are focusing on two primary strategies: First, to continue building strength-on-strength to deliver on our existing plans and commitments and improve them where needed. And, second, to stretch beyond those plans and sharpen and accelerate our pace of progress on key growth and productivity efforts to achieve our full potential,” he said.
The second century initiative is to rebuild the infrastructure within Boeing, reversing a lot of the outsourcing that was done with the 787. For example, the wings were outsourced on the 787 but in-sourced for the 777X. Nacelles for the 737 MAX are now done in-house.
“They have the flexibility to continuously improve effectively,” Tellier says. “They have infrastructure so they have digital continuity end-to-end. They have the infrastructure so as they execute, they do what they said they were going to do,” allowing the experience being gained to inform the next decision.
Dassault Systemes has been engaged by Boeing to equip them with the infrastructure to support this work “for everything from design through production,” he says.
With Boeing saying the NMA is as much about production as anything else, all these initiatives and all the production automation on other programs appearing to be heading for convergence on the NMA, the question is obvious: is this another moonshot that former CEO Jim McNerney famously said would be avoided on the next airplane?
The 787 was the first airplane to undertake a large-scale composites (more than 50% of the fuselage, tail and wings are composites). It was also the first electrical aircraft and the first where industrial partners took on large parts of the design and production of the aircraft. Before this, partners did “manufacture to print,” following Boeing’s design.
“I think the 8-7 had five moonshots baked into it,” Tellier says. “They sort of multiply each other in terms of risk.
“I can’t comment on where they are in terms of disposition and whether they are going to be integrated and collated in the NMA. But I do know the way we’re working with Boeing today is not based on moonshots. It’s really pragmatically building technology levels and progressing the technology into production in an effective risk-free or risk-mitigated way.”