Changing the rules of the 'change' game
Employees and suppliers work together to transform the 737/757 production system
BY SANDY ANGERS
The Commercial Airplanes production system is well equipped to handle infinite variability. That's not necessarily a good thing.
It is estimated that more than 35 percent of today's resources are devoted just to managing the changes to engineering drawings, manufacturing plans or schedule requirements. This variability drives tremendous production costs, inefficiencies in processes and disruption in the factories.
That's why employees of the 737 and 757 programs are working to transform the production system. Their efforts, called 737/757 Transformation, are reducing the number of changes and resulting costs.
Whats good for the goose
The variability that drives complexity and inefficiencies at Boeing also drives these results on the supplier side. The challenge is to understand how suppliers run their businesses, how Boeing processes affect their operations, and how best to provide stability for both sides.
"With increased global competition, all businesses are being challenged to operate more efficiently," said Sam Lawrence, 737/757 Transformation leader. "This is really about Boeing changing its behavior as a customer so suppliers can improve their business and we all can benefit."
Internal suppliers (such as Boeing in Wichita, Kan., and Portland, Ore., Integrated AeroStructures and Machine Fabrication in Auburn, Wash.) and external suppliers Aerospace Dynamics International and Ellanef Manufacturing are helping the airplane programs to design, test and implement new policies and processes that would create a more stable production system.
"Our team is working with Boeing's team to find and eliminate the waste in the system," said John Cave, CEO of California based Aerospace Dynamics International.
"The goal is to reduce waste and save money and allow us to be competitive. We're both trying to understand the business and how our companies interact. It's a very thorough investigation, and I'm optimistic that there will be benefits for all."
Gently down the streams
The approach is to implement a business model that categorizes airplane parts into tailored business streams, which divide the business into different routes to arrive at processes that are reusable, simpler and more cost-effective.
The first stream is composed of parts that are common to every major and/or minor airplane model. These parts, called basic and stable, should rarely change.
The second stream identifies those parts that are considered options. Some use drawings and manufacturing plans and processes that are intended to be reusable. Other parts are highly variable and unique.
One size does not fit all
Two of the goals of 737/757 Transformation are to have more stable parts and fewer variable ones, and to manage those different business streams accordingly.
Basic and stable parts, for example, would require little maintenance and less infrastructure to manage compared to unique and custom parts. It is estimated that more than 60 percent of an airplane's design is basic and stable.
Yet today's processes allow frequent changes to these parts. In essence, Boeing applies one process to all situations instead of applying the appropriate processes and resources to manage the different business streams.
"We can and should manage basic and stable parts separately with lower costs and let the variable parts be managed with our existing processes," Lawrence said.
As employees identify basic and stable parts for the 737 and 757, new policies are being applied to minimize the number of drawing changes.
Some engineering changes are made because of new customer requirements or conditions experienced by the in-service fleet. Many other changes are considered discretionary, requested by engineers or by suppliers to ease the cost of manufacturing.
"There's a question on how beneficial some engineering changes are, especially when consistent levels of drawing 'churn' means our entire production system must be ready to handle change at any time," said Rob Elliott, 757 chief engineer.
"Today's process lets a number of low benefit changes into the system. By using more stringent criteria to evaluate these changes, we can separate the wheat from the chaff. Now, proposed changes are evaluated in light of the benefits provided to the value chain rather than to the individual part or assembly," Elliott added.
A time for change
If deemed beneficial to the value chain, changes are consolidated and scheduled for incorporation at a specific point in time called a blockpoint. The blockpoint approach works very much like the design change process in the automotive industry, where design changes are introduced on an annual basis.
Traditionally, Boeing introduces engineering changes as they are approved, which ensures that employees and suppliers are constantly reacting to a steady stream of changes.
By incorporating changes at specific intervals, employees and suppliers can rely on periods of stability, which means people can count on doing the same job in the same manner. This provides new opportunities for Boeing and its suppliers to improve manufacturing processes more easily.
"We'll be able to use the leanest principles and practices if we have a low-change, stable environment, especially in places where now we cannot implement a pull production system because of so much disruption," said Pete George, director of Integrated AeroStructures. "The Transformation approach is definitely an enabler for Lean."
So how much change is occurring? A study conducted at Integrated AeroStructures showed that two to 16 changes accompanied every order received from the single aisle programs. Some of those changes were related to the engineering drawing. Others were delivery-schedule or order quantity changes caused by inaccuracies and complexities in the computerized reordering system.
To minimize the number of unnecessary schedule and quantity changes, 737/757 Transformation is also developing a way to keep suppliers more closely synchronized to the activities in Boeing factories.
The approach requires less reliance on the computerized system and more direct contact and communication using Lean Manufacturing tactics like visual cues and kanban or pull-production systems.
"Using this approach on basic and stable parts, we should be able to reduce transaction costs significantly. We're starting to see the reduced costs already, so actual experience says this is going to work," George said.
With only 1,150 out of 5,400 parts implemented, Integrated AeroStructures already has saved $600,000 since implementation began late last year. The manufacturing business unit expects savings could be larger when all 5,400 basic and stable parts are implemented.
We've only just begun
Future Transformation improvements include consolidating and reorganizing work packages around tailored business streams so suppliers that have demonstrated the ability to operate a low cost, basic and stable production system get the opportunity to do more of this work.
Eventually, 737/757 employees also hope to develop engineering policies that will drive standard interfaces for optional parts and components. Having standard interfaces or attachment points for optional components or parts will ensure that the basic structure of an assembly can remain the same regardless of the option selected.
"The most exciting part of 737/757 Transformation is the fact that this is not a new direction or a new idea," Lawrence said. "We are building on the foundation that began with Define and Control Airplane Configuration/Manufacturing Resource Management, and tailored business streams concepts, and it works hand in hand with Lean Manufacturing. This is the next logical step in our journey in becoming a lean global enterprise."
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