Lean Manufacturing Initiatives at Boeing
| Case Code: OPER014 Case Length: 12 Pages Period: 1993 - 2002 Pub Date: 2002 Teaching Note: Available |
Price: Rs.300 Organization: Boeing Industry: Airplane Manufacturing Countries: USA Themes: Production management, manufacturing |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Lean Manufacturing at Boeing
Boeing began implementing lean manufacturing principles in 1993. The company employed a Japanese consulting firm to assist in the task at its commercial aircraft division. However, because of Boeing's decades-old operational inefficiencies, it failed to reap the benefits of lean manufacturing. Analysts felt that Boeing's corporate culture was one of the reasons for the above failure. Though executives knew about the manufacturing problems, the company-wide attitudinal problems thwarted any corrective measures. This attitude was due to the environment in which the company was doing business for a long period. Its major customers – mostly state owned airlines, protected by regulation, and the free spending US Department of Defense – never cared about the prices.
Also, Boeing never had an efficient competitor challenging its market share. When Airbus came into the picture, Boeing believed that Airbus was doing well because of the government subsidies it was receiving from the European Union rather than its engineering efficiency...
Reaping the Benefits
As a result of the above initiatives, Boeing was able to reduce its inventory levels by $1 billion since January 1999, and was also successful in reducing the manufacturing time by 60% and manufacturing floor space by more than 50%. This helped the company to lower the production cost and also freed the manufacturing capacity. Boeing utilized this opportunity by entering into contracts with Delta Airlines and Alaska Airlines to manufacture replacement floor panes for their airplanes. Boeing was able to release tens of thousands of square feet of floor space for new business production...
Extending Lean Manufacturing
In 2000, Boeing introduced an innovative manufacturing technique called 'Moving Line' that further improved its production efficiency and quality levels (refer Figure II). Though Boeing had used this technique earlier, the new aspect of this technique was the fusion of the moving line techniques with the lean manufacturing techniques...
Exhibits
Exhibit I: Exhibit I: About Lean Manufacturing
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