BOEING IN SUPPLY CHAIN IMPROVEMENT
Moreover, there are several ways to improve supply chain management and from one of them Boeing has tried to improve the transport for their ultimate customers as well as the passengers. The aerospace manufacturer has been used composite material which is made with carbon fiber, titanium as well as aluminum instead of using traditional aluminum making process for the aircraft. Thus, this improvement allows in increased with humidity as well as the pressure that has to be maintained with the passenger cabin and eventually this will improve the flying experience.
Furthermore, Boeing has aimed to improve the value of its immediate customers by improving the electrical system by using the lithium – ion batteries. That change has been found in improvement of 20% of less fuel for the comparable flights as per the cost per seat mile which is in turn 10% lower than the other aircraft. In addition with the 787 Boeing aircraft manufacturer uses the fuselages which are based on the composite materials and that would reduce maintenance as well as the replacement costs for the airlines.
It is also found that while doing the implementation of the latest supply chain procedures and that reduces the cash operating cost almost by 15%. Besides sales, there are stock market has responded in favor with when Boeing has launched the “game-changing” program in the year 2003. In the period of 2003 to 2007, the stock price of unit share of Boeing has also increased by $30 which indicates a slight increment over $100 per share (Denning, 2013).
In spite of all the above, Boeing has found some major risks that includes the innovation risk as well as the outsourcing risk. In that scenario, to avoid those risks, Boeing’s outsourcing has been modeled with Toyota’s supply chain in partially as there is a record number of 70 percent vehicles are successfully outsourced by Toyota. In contrary, it has been found Boeing has adopted the superficial structure specific to Toyota’s tiered outsourcing model without the values as well as the practices on which it has rest. In spite of that, Boeing has relied upon the poorly designed for contractual arrangements and that is created for perverse incentives while working with the speed of slowest supplier and that provides the penalties for the delay.
Therefore, it has been confirmed that Boeing aerospace has involved in the dramatic shifts in the supply chain strategy which is different from the traditional methods in case of aerospace industry (Jenkins, 2002).
Christopher, S. T., Zimmerman, J., & Nelson, J. (2009). Managing New Product Development and Supply Chain Risks: The Boeing 787 Case. Supply Chain Forum: An International Journal, 74-86.
Denning, S. (2013, 01 21). What Went Wrong At Boeing? Retrieved from https://www.forbes.com: https://www.forbes.com/sites/stevedenning/2013/01/21/what-went-wrong-at-boeing/#43563f8c7b1b
Jenkins, M. (2002). Across the enterprise Boeing is attacking waste and streamlining process. The goal? Cost competitiveness. Retrieved from http://www.boeing.com/: http://www.boeing.com/news/frontiers/archive/2002/august/cover.html