Boeing

'As It Prepares to Boost Product, Jet Maker Steps Up Scrutiny of Vendors' Materials, Finances and Even Tools'

Article Synopsis:

Chicago-based Boeing has won a series of big contracts for its best-selling 737 jet and is sitting on a staggering backlog of 3,500 commercial jets, valued at more than $270 billion. The company aims to boost output by 60%, one of the biggest production increases in years. Boeings production struggles with its 787 Dreamliner taught it to regularly stress-test suppliers, a skill that is coming to the forefront as it tackles a mountain of orders for its best-selling 737 jets. Boeing has bolstered its ranks of supplier examiners with about 200 engineers and other supply-chain specialists in the past 18 months. Its teams visits vendors more frequently and conduct evaluations that can take days to complete. Boeings test regimen has prompted the vendor to make changes in their supply chain to replace their shop-floor management software. The intensified scrutiny is a key component of Boeing's strategy to speed up production of nearly all of its commercial jets without the kinds of costly bottlenecks and delays that hobbled it in previous major ramp-ups.

Airbus has capitalized on some Boeing production delays, Airbus is aiming for record output, as airlines increasingly demand more fuel-efficient jets and air travel expands in Asia and the Middle East. Airlines like Qantas Airways Ltd and Virgin Atlantic Airways Ltd have decided to buy Airbus 330 jets because of Boeings delay in delivering the 787 Dreamliner. Quality issues are on the rise as suppliers scramble to meet the growing demand for aircraft. "We're definitely seeing tension in the supply chain," including longer lead times for ordering parts, Marc Ventre, deputy chief executive of French jet engine supplier Safran SA, told analysts recently. Airplanes are one of the biggest and most complex industrial products, they have millions of parts. Problems in the supply chain, such as...