Boeing seek at least 20% improvements, not 1-4%

Dennis Muilenberg is CEO of Boeing, the US’s leading aerospace and defence company, and the US’s biggest exporter – they employ 140,000 people in some 65 countries

An article by J P Donlon says Muilenberg is ‘on a tear to find another gear to compete in an increasingly complex, global and interconnected world’

Why?

Opportunity:

  • Worldwide commercial airplane passenger growth is 5-6% per year – with growth in China and India as much as 15% p.a.
  • Every year in Asia, 100 million people fly for the first time on an aircraft
  • Barely 20% of the world’s population has ever flown
  • It’s a $7.5 trillion marketplace over the next 10 years

Hence, Muilenberg says: “Incremental productivity improvements of 1-4% a year will not allow us to compete in the future – we are focused on step improvements of 20-90% increments in some of our key value chains

He’s relying on technology unlocking such productivity gains and on finding growth in new parts of the value chain

Production of 737s has already been increased to 42 a month at its Renton, Washington factory which originally had a capacity of only 17 a month – and the plan is for 57 a month in another year

Four big ideas underpin such improvements viz:

  • Commonality – of major subsystems and parts used in different aircraft – “an aircraft is a million parts flying in close formation – and it has to work every time”
  • Automation – of many tasks e.g. a device now drills holes and places thousands of fasteners in their 787 Dreamliners that had previously been done manually – this once took five days, now one, more accurately, and reducing costs
  • Customisation – using 3D printing, Boeing can now offer customers specific features that uniquely differentiate their aircraft
  • Digitising operations – using data analytic engines, they now monitor and control operations on the plant floor and boost efficiency – flow times have been cut by up to 90% alongside significant improvements in first-time quality

However: “The people who make the (above) four work are the people who build the planes – they have the best ideas, they know what works, so we put them into their hands and they surprise us every time”

In addition, they encourage staff to come up with thousands of ideas for more change within Boeing: “The current pipeline has over 2,000 ideas in it right now that we’re just moving our way through and implementing”

Muilenberg also emphasises the need to think about the end-to-end lifecycle of how products are designed, built and then supported – and about improving manufacturing capability around the world ‘to grow the pie and add jobs to increase competitive advantage’

Hence, Boeing continue to grow their supply chain presence overseas viz:

  • They build parts for the 787 in Australia
  • They manufacture Apache attack helicopter fuselages in India
  • They have a finishing centre in China which takes delivery of 737s built in the USA and supplies seats and paintwork for local customers

Overall, Muilenberg says:

  • Competitiveness is a big deal to us, so cost and quality are important
  • The ability to deliver reliably is also critical
  • We look for teammates willing to make targeted investments in digital transformations that’s good for them and good for Boeing
  • And the most important challenge we face is building the future talent pipeline – future engineers and manufacturers – the US is woefully short of STEM qualified people who know about these leading-edge techniques so there’s big investment in hands-on learning, vocational training and engineer re-training

So where next?

Areas where Muilenberg expects change over the next 20 years include:

  • Getting to the airport
  • Processing people through the airport and getting on the plane
  • Dealing with security
  • Propulsion technology – electrically powered airplanes, maybe flying taxis
  • High-speed flights becoming more economical – so one can fly anywhere in the world in one or two hours on supersonic/ hypersonic aircraft
  • Low-earth-orbit space travel
  • Low gravity manufacturing in space becoming practical
  • Before 2030, we’ll put the first person on Mars – and he or she will get there on a Boeing rocket

But, as Mandy Rice-Davies once famously said: “He would say that (last point), wouldn’t he?”

 

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