A A more efficient Boeing can better weather whatever challenges come its way s Boeing celebrates 100 years of aviation leadership, we have an opportunity to set the pace well into the future by anticipating customers’ needs and adapting to new market realities. In this industry, nothing stands still. Canvas-and-wood gives way to aluminum and composites. Propellers yield to jet engines. And the global competitive landscape continues to evolve. Lately, we’re seeing a major shift in the way our customers do business— so we have to change, too. Airlines once paid a large premium for the value of Boeing airplanes, knowing their investment would pay off in the long run because of our products’ capabilities and lower lifetime costs. L E ADERSHIP M ES SAGES The new reality Ray Conner Boeing vice chairman President and chief executive officer, Commercial Airplanes PHOTO: MARIAN LOCKHART | BOEING 06 | BOEING FRONTIERS We’re already addressing this from several angles. Our airplane development group is focused on breaking the development cost curve—the unsustainable growth in nonrecurring development costs—and designing airplanes that cost less and are simpler and safer to build. We’ve made progress and we’ll continue to share lessons learned with our development counterparts at Defense, Space & Security, in a “One Boeing” approach. We’ve reduced the cost of producing a single 787-9 by nearly one-third since first delivery. Working with Boeing Test & Evaluation, we have streamlined flight testing for the 737 MAX and 787-10, partly by eliminating duplication of effort. And we’ve developed a common flight-deck display for the 787, 737 MAX and 777X to reduce installation time, cost and weight. As services grow, we’re harnessing synergies between our Commercial Aviation Services group and its defense counterpart, Global Services & Support, to improve performance and drive costs down across Boeing. And we continue to reap supply-chain efficiencies through the enterprisewide Partnering for Success effort. At Commercial Airplanes, we’re making fundamental shifts to meet customers’ new expectations on price. We’ve targeted six “Keys to Winning” that customers assess when selecting airplanes: design and build quality, reliability and maintainability, airplane performance, delivery discipline, world-class customer support, and competitive pricing. Performing well on the first five Keys sets the stage for success on the sixth—competitive pricing. Even as we adapt for a changing future, we’re strengthening the cultural framework that has made Boeing an aerospace leader for 100 years. This company was built on courage, passion, integrity and the rock-solid assurance that we will keep our commitments. Markets may change, strategies evolve—but our values are timeless. • That dynamic has changed. In today’s more-for-less world, purchase decisions increasingly hinge on price. Sales campaigns are tougher, Airbus has narrowed the value gap and new competitors are on our heels. World events, from political unrest to global economic shifts, add to the fluid nature of the aerospace industry. Some of these forces are out of our hands, but we can lessen their impact by making smart decisions about the factors we can control—cost and efficiency. The more efficient we are, the better we can weather whatever challenges come our way—and the more competitive we will be in the orders sweepstakes. This is our new reality—not just for the year ahead, but for the foreseeable future.
Frontiers March 2016 Issue
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