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Feature Story

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Boeing/Bob Ferguson

Boeing is boosting production of all its jetliners, including the 777 line shown here at the Everett, Wash., factory. Production of the 777 will go from seven airplanes per month to 8.3 in the first quarter of 2013. As Boeing executes the epic increase to meet growing demand, it is building on lessons learned in the 1990s.

Ramping up airplane production

From a window above the Boeing 777 assembly line in Everett, Wash., Brian Baird paused to study the hum of activity below.

737

Boeing/Jim Anderson

Next-Generation 737 fuselage assemblies arrive by train at Boeing's Renton, Wash., plant. The giant sections, built in Wichita, Kan., are joined together on the final assembly line. Production of the 737 will hit 42 airplanes a month in 2014.

Boeing employees, like bees buzzing about a hive, methodically were building a new 777 airplane. Within and outside the airplane, drawing from banks of prearranged parts and tools, mechanics, engineers and others conducted an artful manufacturing choreography.

"It is almost miraculous the way we put 3 million parts together to fly safely and efficiently as an airplane at 30,000 feet (9 kilometers)," said Baird, who directed the 777's business operations.

What already is a breathtaking process will become even more impressive.

Boeing employees are carrying out a historic increase in the production rates of all five major commercial airplanes programs: the 737, 747-8, 767, 777, and 787. An overall 40-percent production increase, to be phased in over three years, aims to meet airlines' growing demand for more fuel-efficient and environmentally-progressive airplanes.

"We got in trouble when we went up in rate in 1998. Fortunately there is a lot of scar tissue on the organization because of that" Jim Albaugh, Boeing Commercial Airplanes President & CEO

Ramping up production capacity and capability in a system of this magnitude requires confidence in the production and supply systems.

737

Boeing

In July, Boeing opened a refurbished paint hangar near its Renton, Wash., facility to accommodate the increase in Next-Generation 737 production. Above, one of the first airplanes to be painted in the facility, a 737-700 for Southwest Airlines.

Boeing's confidence, ironically, stems in part from lessons learned in 1998, when Boeing and its suppliers increased rates up a very steep curve. The strain on the supply chain ultimately shut down assembly lines.

"We got in trouble when we went up in rate in 1998. Fortunately there is a lot of scar tissue on the organization because of that," Jim Albaugh, president and CEO of Commercial Airplanes, told Boeing investors at a conference in Seattle in May. "We'll learn from those mistakes and get it right this time."

Today, Boeing is in a much different situation, with a healthier supply base and suppliers already in a rate-up situation. The lessons learned from 1998 have evolved into a disciplined system of checks and balances, with production rate decisions integrated across all airplane programs and the supply chain.

To respond to the production rate increase and meet emerging needs, Boeing Commercial Airplanes has hired more than 5,000 employees since January 2011.

Resources are focused on retaining smooth production capacity and capability while avoiding disruptions. Rigorous attention to risk mitigation ensures the right tools, equipment and people are in place to sustain a healthy production system and supply base.

747-8

Boeing/Bob Ferguson

A Boeing 747-8 Intercontinental nears completion in Everett, Wash. Boeing plans to increase production of the 747-8 from 1.5 a month to 2 airplanes a month in mid 2012.

"It is a very dynamic process," said Jenette Ramos, vice president of Operations Supply Chain Rate Capability, Boeing Commercial Airplanes. Ramos and her colleagues oversee a supply chain that handles more than a half-billion parts a year and deals with nearly 1,400 production suppliers in 30 countries, at least half of them small businesses.

"We are shifting the culture from being reactive to proactive-to one where we seek risks so we can manage them," said Ramos.

Lean+ practices implemented since 1998, for example, provide the capacity to make rate while enhancing quality and cost efficiency and mitigating waste. A mature Lean+ line is a key reason the Next-Generation 737 program, for example, halved the build time for one airplane from 22 days to 11 days, and why the program recently announced it will increase rate to 42 airplanes a month in 2014.

In addition to Lean+, other significant changes since 1998 that specifically address smooth operations include production rate assessments (PRAs) and strict rate-break rules.

During PRAs, teams of specialists evaluate suppliers at all levels, identify gaps and ensure they are filled. Ramos compares them to "playing a game on the field and you have to throw the yellow flag-and you have to be okay with throwing the yellow flag."

"We are shifting the culture from being reactive to proactive-to one where we seek risks so we can manage them." Jenette Ramos, Boeing Supplier Management

Strict rate-break rules prevent more than one program from increasing rate at any given time. For a program to go up in rate, it must select an open window where no other program is breaking rate. A disciplined rate must be maintained for six months before it can be stepped up, with two months' separation from any other program.

767

Boeing

The Boeing 767 program opened a new, more efficient production line in Everett, Wash., earlier this year. The new factory houses the final two steps of 767 production, which are final body join and final assembly. The same production line will be used to build both commercial and military 767s, including the platform for U.S. Air Force KC-46A Tanker.

Brian Baird said strict rate-break rules "are heavily integrated across all programs; we didn't use to have that."

To respond to the production rate increase and meet emerging needs, Boeing Commercial Airplanes has hired more than 5,000 employees since January 2011.

Meanwhile, Boeing's fabrication division, with 11 sites in Australia, Canada and the U.S., has the strategic capacity for emergent work-making sure parts are available to avoid production delays. The division performs quick turnarounds needed because of redesign, damaged parts or a parts shortage until a supply base stabilizes.

Baird said it amazes him how all these facets come together as one to churn out the most complicated mass-produced products in the world.

"It is an incredible feat. Boeing is really, really good at integrating all the systems on an airplane and bringing all those parts together, in sequence, on time. It is humbling at times."