October 2005 
Volume 04, Issue 6 
Commercial Airplanes

Going—but far from gone

717 innovations live on long after production


The final 717 makes its way this month through preliminary production, en route to completion in May 2006. But if not for unconventional action at the program's outset, the economical airplane might never have been. With steadfast resolve, the 717 team twice reinvented its business model—and the results just might look familiar.

Bob Stanger and Pat McKenna talk with Cal Merrill in front of Commercial Airplanes' first moving assembly lineCurrent demand for jets in the 100-seat category won't support continued production, but the airplane has been highly profitable for its operators. Developed by McDonnell Douglas as the MD-95 and renamed 717 after the merger with Boeing in 1997, the airplane was a low-cost concept modeled after the company's successful DC-9.

Back in 1994, at the program's outset, the market forecast for 100-seaters looked encouraging. Yet no matter how leaders crunched the numbers, there simply was no profitable way to launch and maintain an airplane program following a blueprint from the past. The team needed to change its approach—and do it quickly.

The program looked first to supplier relationships. At the time, the majority of the airplane was produced in-house and the rest of the work subcontracted. However, the team recognized that a new approach with suppliers could forge a unique and mutually beneficial partnership and drastically reduce costs. 

"We started a concept in which we gave more work to the suppliers and had them take more risk up front," said Pat McKenna, 717 vice president and general manager. "In return, we involved them more in managing and developing the program."

Today, partnering with global suppliers and sharing development risk is seen throughout Boeing Commercial Airplanes, most notably on the revolutionary 787.

With supplier partners on board, the 717 program launched in 1995. The 717 made its first flight in September 1998, and by the first delivery a year later, the program had accumulated almost 100 orders.

Yet questions lingered about the program's future. In the years after Boeing and McDonnell Douglas merged, customers and investors were uncertain whether the airplane would fit into the company's product family. Boeing decided that the burgeoning program had a lot of potential, but something more needed to be done to obtain a reasonable return on investment. The 717 team again looked to overhaul its approach.

In  1999, the program launched the Strategic Business Transformation. This initiative touched all aspects of the 717 business, with a determined focus to drive out costs. The team consolidated manufacturing into a single factory that significantly improved efficiency. Other Boeing programs have since followed this tactic—most notably, the 737 "Move to the Lake" factory consolidation in Renton, Wash.

One of the most dramatic changes the 717 instituted—and introduced to Commercial Airplanes—was the moving assembly line. Manually repositioning airplanes between production stations was time-consuming and expensive. The moving line, where mechanics work from a set production station, resulted in continuous one-piece flow throughout the factory.

"It wasn't perfect," said Bob Stanger, director of 717 Manufacturing. "Nobody had ever successfully implemented a moving line for commercial airplanes before, but we did a lot of things right." And, true to its goal, the program began to realize savings attributed to the moving line.

In its quest to work smarter, the 717 program also added measures to facilitate employee involvement. Integrated Production Teams, featuring people from numerous disciplines such as Production and Finance, played an integral part in the factory reorganization. These IPTs collocated key organizations in the factory building so everyone could work together more closely.

The 717 program's numerous departures from tradition have been incorporated into other Commercial Airplanes production lines. It achieved breakthrough cost reduction, not just incremental improvement. But perhaps more important is the change in thinking that allowed its existence.

"We have grown a mindset in all members of our team that continuous improvement and doing things differently is not only OK, but the key to Boeing's long-term success," McKenna said. 



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