By Bjorn Fehrm
November 6, 2019, ©. Leeham News at Aviation Forum Munich: The second day of Aviation Forum Munich had an interesting presentation from Boeing’s VP of Sourcing, Jody Franich.
He described the One Boeing approach for Manufacturing and Sourcing and how Boeing is moving away from its supply chain Partnership for Success program, with the supplier cost down focus replaced by a more long-term cooperation model with a mutual benefit focus.
Historically, the Boeing divisions (Commercial airplanes, Defense & Space, Services) had their own manufacturing and supply chain. This precluded as an example the smaller Defense and Space from benefiting from the much larger sourcing and production quantities of Commercial airplanes.
Since 2015 Boeing has changed this into a “One Boeing” model where Manufacturing and Sourcing is a unified organization, with one SVP, Jenette Ramos, reporting to Dennis Muilenburg, the Boeing CEO.
Franich, which is heading up the Enterprise Sourcing office, put Boeing’s sourcing in perspective:
Franich then described how Boeing is changing its supply chain strategy. Instead of the Partnership for Success which focused a cost down from suppliers a more Total Cost of Ownership model is introduced, with a roll-out over the coming months.
The focus is changing to a long term partnership where both parties shall have success. Cost is still important but it shall come out of joint work with supplier improvement programs and supplier reliability and quality are equal key metrics in the partnership.
Boeing is introducing a production and sourcing industry-standard framework called SCORE. It shall give Common Language, Practices, Metrics and Tools for Boeing and its partners. As part of these efforts, Boeing invests $5bn in programs for its Small and Diverse Businesses suppliers.
Franich also emphasized that the elimination of disruptions to Boeing’s production caused by the supply chain problems is an absolute priority. Boeing’s engagement in verticalization of areas like Cabins, Avionics, APUs and Actuators shall be seen in this context. Additive manufacturing and Sub-Components are also vertical developments.
In summary, it was a Boeing with a changed attitude that presented in front of the European supply chain. The expectations for a Boeing global supplier are not only a competitive cost level but there shall be an understanding of how to fit in the Boeing performance excellence puzzle in terms of cost, quality and delivery.
The changed supply chain concept goes far beyond what Partnering for Success ever did. The partners are now expected to run financially healthy businesses that can together with Boeing invest in affordability, efficiency and innovation.