Lean Manufacturing at Boeing and Airbus Chris Hall and Josh McArthur
Boeing was founded on July 15, 1916 by William E. Boeing as Pacific Aero Products • Became Boeing Airplane Company in 1917 • First “modern” plane, the 247 built in 1933 • Government regulations force a split into Boeing Airplane Co. and United Airlines in 1934 • Built B-17 bombers in WW2, peak production was 350 planes a month • First commercial jet, the 707, introduced in 1958 • 1967 the 737 is introduced, the top selling plane of all time. It is still being manufactured with modern updates • Top contractor for the International Space Station • Lost its market leadership position to Airbus in 2003
Company Background • Airbus was formally established in December 1970 in France. • Company was founded by grouping of leading German aircraft manufacturing firms. • Together the companies had decided to build the A300, the first twin-engine wide body airliner, to fill a gap in the market and to challenge American supremacy in the aviation industry. • In 1972 the Airbus A300 made its maiden flight. • By 1979 their were only 81 A300’s in service. • The launch of the Airbus A320 in 1981 established Airbus as a major player in the aircraft market. • The A320 was move advanced, fuel efficient, and smaller.
Company Background • Through out the 1980’s and up until today Airbus has continued to grow their company through both civilian and military contracts. • Airbus is a EADS company (European Aeronautic Defense and Space) • Currently employee over 57,000 people • President and CEO is Thomas Enders
Competition • Airbus and Boeing are in direct competition with each other year after year. • There are around 5000 airbus aircrafts in service. • There are alone over 5000 Boeing 737’s in service. ORDERS
What is Lean and Why Should You Care? • A set of tools to reduce waste and create process flow • Developed by Toyota • Includes value stream mapping, 5S, kanban, and error-proofing ( poka-yoke ), and production leveling • Reduction of 3 types of waste: • Non-value-added work ( muda ) • Overburdened systems ( muri ) • Unevenness ( mura ) • Incorporates JIT and “smart automation” • Inventory turns are a common lean measure
Boeing Goes Lean • In the early 90’s Boeing realized it needed to improve its process flow • Executives were sent to Japan to study JIT, error free production, and process flow • Consultants were hired from Shingijutsu Co., a group of former Toyota executives • “To make planes is to make and develop people” – Chihiro Nakao it’s all about training
The Apache is a Bit Chubby • Boeing took over manufacture of the Apache in 1997 • Cycle time was increasing and quality slipping • 22 aircraft in inventory for a 2 per month delivery • Huge inventory costs
The Apache Slims Down • Manpower reduced and more direct work on the helicopters was achieved • Factory floor redesigned by building wood and styrofoam models • Tools and parts arranged for minimal movement • Support cells moved alongside the aircraft • Process targeted for 75% reduction, 72% was achieved in the first year • Takt time is 2.75 days, calculated from customer demand, creating a “pulse line”
The Results • 85% reduction in hours to assemble an Apache, 54% in total build time • 218% increase in build rate • 87 inspectors now working as mechanics, now only 16 auditors remain • Overtime costs reduced from 20% to 3-5% • $8 million per month saved in inventory costs
Lean Training for the Commercial Division • 1500 executives trained in Japan over a 3 year period • 50 master six-sigma black belts, over 100 green belts • 3-400 trained in kaizen • Toyota consultants hired for 350 billed weeks/year, now down to about 100/year
The 737 Line • Boeing worked backward from the plant exit to reorient the line, from a 2 line slant build to a single nose to tail • This change helped implement a moving line system • 60% of the time was spent away from the plane, so point of use kitting was incorporated
Improving 737 Production • Boeing is working with suppliers to use a JIT system on the 737 line • The goal is first contact by a Boeing employee is attaching the part to the aircraft • Flow time reduced from 28 days to 22, 15, and now 11 days
737 Continued • Moving line is set at 2 inches per minute, calibrated to team task times with point of use kits • Crane moves reduced by 39% • Flow times improved by 30% • Inventory levels dropped by 42% • Floor space reduced by 216,000 square feet
Supplier Improvements • Woven Electronics improved inventory turns from 7 in 2000 to 26 in 2006, and will soon achieve one-piece flow • Interior manufacturers reduced flow time for overhead storage bays from 140 days to 4 • Wing production facilities have created a savings of $58,000 per set of wings, and have a goal of $100,000
Non-Manufacturing Gains • Non value added steps being removed allowed a rework of the variable labor scheduling, resulting in a new computerized scheduling optimizer. The Result, $200,000 in initial savings and $40,000/yr in reduced time and paperwork costs • Improved requisition process allows early negotiation with suppliers and customers • New office supplies procurement system tracks thousands of commonly used items at various facilities
Non-Manufacturing Gains • Renton lake facility reorganized after a 2001 earthquake destroyed • Consolidation reduced square footage by 40%, forcing more efficient organization. • Managers and engineers offices overlook the factory floor, with glass and plastic barriers to allow them observation points. Factory sounds filter into the office environment • This setup keeps everyone focused on the final result, a better, more efficient plane
LEAN AIRBUS • The concept that turned Toyota into a powerhouse is now transforming aerospace companies. • Lean cut assembly time for the Boeing 737 by more than half, transformed an Airbus factory, and probably saved Pratt & Whitney from going belly-up. • At its most basic, lean means eliminating waste, defined as anything that uses resources without creating value for the customer. • In four years, the Airbus factory in North Wales, which produces wings for all the company’s airliners, has reduced quality defects by 62%
LEAN AIRBUS • In the 1990’s delivery of its wings to Airbus’s final assembly plant in France, took place on schedule only 18% of the time. • They began leading a formal implementation of lean initiatives that by 2001 had boosted on-time delivery to 100%, where it has stayed ever since. • To achieve these results Airbus appointed Unipart Logistics as a supply chain partner and Lean Logistics Service Partner for the Broughton operation.
LEAN AIRBUS • Unipart had been able to demonstrate a rich heritage in lean operations and a track record of developing and implementing lean logistics solutions for clients in a diverse range of industries. • Working as an integrated part of the Airbus organization, Unipart assumed overall responsibility for a wide range of supply chain operations
LEAN AIRBUS Productivity improved through: • Implementation of Lean Principles and developing Unipart’s culture of continuous improvement • Progressive synchronization of extended supply chain activities. • Supplier capability assessments and improvement programmers. • Airbus manufacturing project planning and support • Improving operational control through introduction of standard operating procedures.
LEAN AIRBUS BENEFITS • Reduction in operational headcount activity allowing for reallocation of staff • Inbound processing time reduced by 70% • 80% reduction in lead time and kitting inventory for A320 Family production • 16,000 man hour savings identified throughout the internal Supply Chain and Manufacturing areas • 30% recorded improvement in stock integrity levels • 51% improvement in internal customer satisfaction score • Consolidation of kitting operations allowing for integration of processes creating cost and space reductions • Improved layout and material flow releasing required floor space