Bjorn’s Corner: New aircraft technologies. Part 33. Supply chain

By Bjorn Fehrm.

October 6, 2023, ©. Leeham News: We are discussing the Detailed design phase of an airliner development program. We have discussed program management methods, development techniques, tools for Detailed design and that the production methods today are as important as technology for achieving aircraft performance.

Another decisive part is how to involve and manage the suppliers to a project. The supply chain contributes about two-thirds of the value of an aircraft. Methods and tools to control this part of the project are therefore critical for the program.

Figure 1. The development plan for a new airliner. Source: Leeham Co.

Manage the supply chain

Less than 10% of the value of an airliner is added at the Final Assembly Line (FAL) site, which we normally view as the main site of production. Boeing has its 737 production concentrated in one FAL at Renton in Seattle, whereas Airbus has its A320/A321 FALs in Toulouse, Hamburg, Mobile in the US, and Tianjin, China.

In total, the supply chain creates about 60% of the value of an airliner. The processes and tools to keep the suppliers in tight sync with the project are of utmost importance during detail design. It starts with the definition of what shall be performed by the supplier and the work relationship.

There are different forms of Customer to Supplier relationships:

  • Build to Print: The suppliers manufacture a part/assembly or system to an OEM’s or Tier N+1 supplier’s (the customer’s) design. The classical way was building something to the contractor’s paper documentation; therefore, it’s called Buid to Print, which is the contractor’s printed drawings and any supplementary documentation. The responsibility for the design and that it fits to the project lies with the customer.
  • Build to Spec: The supplier designs a part/assembly or system to an OEM’s or Tier N+1 supplier’s specifications. The customer relies on the supplier to have the competence and capability to design, prototype, and later produce the part/assembly or system according to the customer’s specifications and to participate in the project in such a way that the final results fit and meet the expectations of the customer.

For the Build to Print, the customer retains full control of the product. The manufacturer can give feedback on the design and suggest changes in design or manufacturing, but the customer decides what will be changed or not. This is a relationship that is used for parts manufacture that the customer then integrates into systems or structural assemblies.

The communication was traditionally by paper drawings; today, it’s in an electronic form. It can be PDF drawings but also 3D models complemented by supplementary information. Ideally, the manufacturer shall have the design suite of the customer or at least a compatible 3D viewer. A capability to integrate into the customer’s workflow, either the PDM system or any workflow system, is beneficial.

The Build to Spec relationship builds on mutual trust and knowledge about each other’s capabilities. The customer specifies the characteristics of the part/assembly or systems that he wants the supplier to design, prototype, test, and produce in sync with the customer’s own work on the project.

Here, the integration of used tools and information flows is tighter. The supplier needs the same design suite tools as the customer if detailed 3D and meta information flows between supplier and customer. There are converters and neutral formats like STEP, but you always lose some information during the transitions through such converters.

Here, the use of model-based specifications gives more unambiguous information about what the customers want, and the supplier can use the models in the verification of his designs and, if detailed enough, in the quality control work with the customer.


The car industry has a similar customer-supplier situation to the aeronautical industry. It needed an industry-standardized framework for the customer-supplier relationship, and especially the quality work needed to ensure correct quality products were delivered to its Final Assembly Lines. It created the Advanced Product Quality Planning (APQP) framework, which is now used by several industries, including the aeronautical industry.

APQP is more than a quality framework. It spans all phases of the development and production of a product as the quality of a product is not a product of final controls or the creation of APQP’s PPAP (Production Part Approval Process) documentation at the end of the process.

The APQP framework sets up the process of how the different steps in the creation of a product are documented in the PPAP files that follow the product. Through the PPAP information, the next step in the chain know what happened before in the creation of the product, and it uses a standardized language.

APQP has created manuals and standards for the processes that ensure the quality of a product. Examples are the Failure Mode and Effects Analysis (FMEA) manual, the Statistical Process Control (SPC) manual, and the Measurement Systems Analysis (MSA) manual. The results from such standardized methods are documented in the PPAP files that follow the product.

For Build to Spec suppliers, it’s important these are integrated into the Configuration Control systems of the OEM. Configuration Control (or Configuration Management) is about keeping everyone in sync within the complicated puzzle an airliner development and manufacturing project is.

All corners of the project, including the suppliers, must work with the correct version of information, the correct revision of the millions of parts that are created, and issue the necessary information to all others at the correct time.

If the tight synchronization of the project is lost and participants start to doubt they work with the correct information, the project is in deep trouble. Ensuring an effective Configuration Control in a large organization spanning 10,0000s of people over several geographies and time zones is tough. Doing it over organizational and cultural boundaries in a nested supply chain is even tougher.

17 Comments on “Bjorn’s Corner: New aircraft technologies. Part 33. Supply chain

  1. Congratulation (again) Bjorn for your ability to populize subjects!
    The content of this article being my day to day for more than 15 years, I can only aknowledge how true it is!

    A the developpement V cycle goes, the lower level a BTS supplier is (tier-2, tier-3…), the less time it has to developp it product. The reasons are:
    1) its preliminary design phase can only start when the above level communicate (and freeze) its requirement (PDR)
    2) the supplier has to complete its detailed design phase (CDR) before the above level ones. Design discussions can be anticipated but with a risk of requirement changes and further NRC charged by the supplier at each iteration.

    As BTP are produced outside, they usually require a supplier selection, wich often is only initiated once (mature enough) detailed drawings are available. If it occurs too late in the detailed design phase, iterations with the producer to optimize the design manufactirability cannot be performed. Once again, discussions can be anticipated but with iterations risks and cost.

    In addition to the standadize framework, effective APQP relies on:
    – An early identification of project risks, setting adequate mitigation plans and identifying which APQP deliverables are key to the project to monitor their progression
    – Effective co-engineering and communication throughout the project team (including manufcaturing, testing…)
    – Mananagement implication to support the project teams and provide adequate ressources (and not only to reprimand the team!).

    • Thanks! It’s so valuable to have subject matter experts commenting and adding to the article. /Bjorn

  2. The interesting part of design/build to spec is when the contracted manufacturer starts its own cost reduction programs, change processes/tools and swap subcontractors/simplify its processes. The Type Certificate holder must anticipate this and contractually make sure all requalification’s are done and approved before the change. They also must make sure its Design organisation approval and its qualified parts/processes are followed.

    • And from a supplier point of view, any change is an epic journey: a tier-3 proposing a change musts instruct it with the tier-2 who must instructs it with the tier-1 who musts instruct it with the customer… who may have to instruct it with the Authorities!
      Suffice to say that at some point, even if it breaks rules, for low level suppliers the temptation to perform change without telling it can be high…

      • Yes, happens all the time. But the quality documents from the TC holder must specify alot, like what drawing dimensions must be checked for each part and which dimensions do you measure at 100% cut up and what actions are required for each deviation from tolerances in those instances and how often shall the 100% verification happen for “hidden dimensions/requirements”. Also what changes require full source substantiation testing/verifications should be decided ahead and double checked that your purchasing has not removed that hated box requirement to make the suppliers happier.

        • Just to add in the other key element and that is how product are treated (ala the traditional heating treatments though it can be any added treatment that ensures the end product does what its supposed to).

          Included of course would be auto clave heat, time and pressure.

          You may mill a piece out of aluminum that has been pre treated and you just need to mill it correctly dimensionaly or it can be more elaborate.

          It boggles the mind in trying to track it with paper but the digital process as Bjorn is specifying is a different tech challenge.

          I used end products and just had to ensure that something like a heated bearing was kept below a temperature that caused issues. Some miner heat treatment of screwdriver ends that had to be ground.

      • “.. for low level suppliers the temptation to perform change without telling it can be high…”

        There was some bruhaha with Boeing’s Moscow bureau while designing changes into the 748.
        Underlying issues was 747 docs/drawings not conforming to the actual manufactured and delivered product
        seem to indicate that this omission was regular procedure at Boeing manufacturing all the time.

  3. ‘Less than 10% of the value of an airliner is added at the Final Assembly Line (FAL) site, which we normally view as the main site of production.’

    From a financial side of things, this falls in line pretty nicely with what earning OEM’s generate on the sale of their aircraft; around a 10% margin, give or take.

    Sub-contracting out is usually supposed to be a way to cut costs, normally in labour. What I’d like to know, is if over the long term, work was to be brought back in house and FAL’s were to complete more of the value of a plane, would it result in a higher margin for the OEM. (Given that all of these Tier 1, 2 & 3 are also making a margin themselves)

    Yes, as explained to me by our esteemed engineering colleague, there are just some things they cannot do due to expertise, patents and other issues, but this was followed up by:

    “Boeing sure rues the day they sold Wichita and would love to have it back in the BA family, making their own barrel sections today”

    Anyone have an idea how much Spirit charges BA for a completed fuselage sent to Washington? Even as a percentage of the value of a Max?

    • Vertical integration has it’s allure if you are looking to reduce costs and gain control of your supply chain. The pitfall is you become a worse supplier to yourself than your previous supply chain. Suppliers are generally more efficient because they have their own P&L’s and they have to compete for OEM business.

      • Like all things the work split out is a balance.

        Boeing issue with the shim fits on the 787 is case in point that owning that part of the process does not mean its done right.

        Keeping in mind that there were two aspects involved, supplied parts out of tolerance and Boeing not catching it.

        That is aside from Boeing’s own shim program failure.

      • Around 1900 something like that was the reason for inventing “DIN defined parts” mechanism ( and definition dictionaries like RAL ) .

        You design with DIN specced parts and then chose your supplier on availability and price.

      • ‘The pitfall is you become a worse supplier to yourself than your previous supply chain.’

        If that’s the case, than you might want to look at how you’re doing everything, not just the stuff you decide to bring back home. Typically, doing the work yourself is supposed to give you an increase in control over the process that you don’t have when farming it out.

        If in the cited case (Spirit) Boeing could not run Wichita as well as the guys down there, then they’ve got bigger problems then some holes in the aft pressure bulkhead. As well – if Spirit was still a part of BA they would only be making and focused solely on Boeing aircraft.

        Instead, since it’s divestiture Spirit has created it’s own company culture and way of doing things.

        Take for instance the response to the pandemic/grounding;

        As a supplier, Boeing just has legal look over the contract and can say: “What’s in the contract? With sufficient notice we can reduce production with no penalties? OK – given ’em a call and tell ’em we’re slowing down and they have to deal with it”

        (maybe not as brusque as that, but you get the point)

        When they’re you’re employees, the thought process changes:
        “If we start laying people off, how many are we losing permanently who will find good work elsewhere?”

        The mindset changes, they’re your people (at least that’s how it’s supposed to work, as Calhoun laid off some 20k during the slowdown).

        • “Typically, doing the work yourself is supposed to give you an increase in control over the process that you don’t have when farming it out.”

          Questionable if this works out in a short term profits oriented environment. “Inside” allows for “optimizing” processes by relaxation of supervision.

          IMU what was tagged as an Airbus disadvantage ( widely distributed design and manufacture ) required rather stringent interfacing descriptions and control of same from day one of the A300.

          As an aside and IMHO: major restrictions on hire and FIRE an empowered workforce in general have been falsely derided as an Airbus disadvantage.

          • Frank P:

            One of the stark realities is Boeing laid off a bunch of contract employees when there was going to be a hiatus while the 787-10 got into production (all of 3 months)

            I forget which brilliant VP came up with that but management accepted it (or endorsed).

            It turned out those contract workers were the glue that was holding Charleston together.

            Boeing would have to think ahead rather than short term gains and I have yet to see that (not saying its not happening but its nebulous at best).

            On the other hand shooting yourself in the foot has become a Boeing corporate norm.

            It should be noted Spirit makes the nose section of the 787 and that has generally been a quiet front (the one shim fit issue with the pressure bulkhead).

            Really no sense in what iffs, its the current reality that has to be dealt with and that is not going to change.

            Could Spirit spin off the loss making sections? That would be interesting, here Boeing, catch. Offer to sell them to China!

      • Suppliers that are very skilled and often get their government support to buy the latest and greatest production equipment for its speciality can be good to work with.

    • “Anyone have an idea how much Spirit charges BA for a completed fuselage sent to Washington?”

      Looking at their financial situation : not enough by quite some margin.

  4. My impression is that the future will bring fully digital parametric designs that cover the complete product ( here : airplane )
    subcontractors will “own” regions of this object and the (party own) interfacing to neighbouring stuff.
    Changes will instantly effect the full design and simulation.

    ( look into HDL design for fitting functions into programmable logic / gatearrays / .. )

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