Silos & Supply Chains - Part 3

When aerospace manufacturer Boeing committed itself to lean manufacturing, it sent teams of workers to various automotive plants around the world to learn the best manufacturing practices from companies such as Porsche and Volkswagen. The aerospace industry is considerably more parts-intensive and labor-intensive than the automotive industry—a typical jet has more than 3 million parts—but Boeing still learned plenty about job scheduling and just-in-time manufacturing. Those lessons have been put to good use in streamlining what is arguably the most complex manufacturing supply chain in the world.

Boeing has been devoted to lean principles since the early 1990s, and one of the company's key goals has been to eliminate waste and the costs associated with it, whether it's wasted time, wasted production materials, wasted labor, or wasted money To reach that goal, the company has substantially reduced its supply base (down by 65 percent since 2000), and now partners only with those suppliers that can provide the best in terms of capability, quality, delivery performance, and collaboration, explains Nonna Clayton, vice president of supplier management for Boeing's Integrated Defense Systems group.

Boeing's lean consultants work directly with suppliers and train them so they can implement lean on their own, Clayton notes. Additionally, suppliers are encouraged to attend lean conferences and symposiums, as well as participate in manufacturing extension partnerships where available. Through a process known as value stream mapping, Boeing has been able to reduce its procurement costs while helping its suppliers identify areas where they can drive out costs as well. With value stream mapping, a company begins by defining the current state of how a process is being done. Then it focuses on where it wants to be and identifies areas of improvement that will bring about that desired state. Using this process, one cable supplier to Boeing has been able to cut assembly time by 44 percent while increasing productivity by 27 percent. It's all part of Boeing's program goal of keeping the flow of information, requirements, products, and services free of waste. In that situation, everybody in the supply chain ends up a winner.