NOVEMBER 2016 | 07 to nail it the first time, in terms of quality, really helps with affordability and being competitive. How is Boeing working with suppliers? We’re spending more time with suppliers because we see their cost structure as our cost structure. With a backlog of nearly 5,700 airplanes at Commercial Airplanes and two-thirds of every airplane’s cost coming through the supply chain, we have a big opportunity to reduce costs by working smarter with our suppliers. That’s the idea behind Partnering for Success, our enterprise effort to work with suppliers to reduce costs and provide the highest-quality products. And our supplier relationships continue to deepen. A great example is how we’ve worked to increase production efficiency on the 787 program. We’re now down to looking at what we can do minute by minute to improve flow of the production system. We share what we’ve learned with our supplier partners so they can make similar changes and become more competitive. Is Partnering for Success a long-term effort? It has to be, because our customers will continue to expect more for less. We must keep looking for ways to trim costs and be more efficient. Partnering for Success is much more than simply reviewing supplier contracts for better terms. We don’t ask our suppliers to do anything we wouldn’t do ourselves. Our spirit of working together and embedding teams with suppliers is vital to driving quality and stability. This year, we’ve extended this work through our “boots on the ground” initiative that involves engineering, finance, operations and Lean+ teams relocating to supplier sites for one year. Over that time, our people work with our supplier partners to capture even more productivity, capability and savings. We have more work to do, but the early results are very encouraging. And as our supplier relationships grow, we will be better able to work with them on development of new processes and technology that we can both use. The future payoff is when those things are implemented and we begin to see better quality and efficiency stemming from them. What about process changes? A lot of it involves streamlining processes that drive cost. Earlier this year, we changed when we pay large suppliers to the way most businesses do it. Change isn’t easy, and we continue to work with those suppliers through the transition. We’re also managing our inventory better. For example, we’ve created better processes to understand what raw materials and parts are needed to run the business most efficiently. We’re also bundling parts orders across programs to take advantage of bulk discounts. These efforts support our ability to generate cash and to manage it effectively, which is fundamental to running a healthy business. How can employees help? Every employee plays a part in making Boeing more competitive, and often the simplest things can make a big difference. From using Lean+ to improve productivity and flow, to driving first-time quality in the office and factory to reduce rework, everyone can create value while providing the most innovative yet affordable products. That’s our responsibility as individuals. And by working together with our supplier partners, we can capture significant opportunities and successfully address the market forces affecting our industry. That winning mindset and our 100 years of successfully adapting to new challenges will extend our leadership position going forward. •
Frontiers November 2016 Issue
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