The Supply Chain Matters blog provides a further update on the ongoing production quality, corporate reputational and cultural challenges that collectively surround commercial aircraft producer Boeing.

In our last two reader updates, we addressed both the financial and operational challenges for Boeing if it moves ahead with the speculated internal re-integration of fuselage major components supplier Spirit AeroSystems. Prior to that our update focused on Boeing’s overall production quality challenges being assessed as systemic in scope.

Since these updates, recent developments reinforce the growing scope and implications related to these multi-faceted challenges.

 

Criminal Investigation Underway

The U.S. Department of Justice has reportedly opened a formal criminal investigation concerning the blowout that left a hole in the side of an Alaska Airlines 737 Max 9 aircraft in January.

The development, initially reported by The Wall Street Journal citing informed sources, involves the interviewing of passengers and crew members who were on-board the aircraft at the time of the incident. Alaska Airlines has indicated in a statement that it is normal for the Justice Department to be conducting such an investigation and that the airline is fully cooperating. The airline also pointed out that it does not believe it will be the target of the investigation.

In its reporting, the WSJ indicated that the investigation is occurring in tandem with the justice agency’s ongoing review of Boeing‘s compliance with a previous settlement sparked by two fatal crashes involving separate 737 MAX aircraft in 2018 and 2019 that killed nearly 350 people. Thus, there is likely a long tail involved in the scope.

Industry and business media has voiced some concern that the shadow of such an investigation may hamper the willingness of Boeing or respective supplier workers to want to share additional information regarding production and quality conformance processes.

Regarding the latter, Boeing indicated to investigators late last week that the company cannot locate specific documentation indicating what door related work was performed on the subject Alaska Airlines aircraft that was involved in the door blowout.

 

Notion and Challenge of Traveled Work Again Surfaces

Yesterday, The Wall Street Journal published a report: Behind the Alaska Blowout: a Manufacturing Habit Boeing Can’t Break. (Paid subscription).

This report accounts for the notions of unconforming quality repair needs that are termed traveled work. The term connotes that the assembly flight line carries designated aircraft assemblies with non-conforming added work requirements. It is a means of documenting such needs and being able to certify that such added rework has been completed before the aircraft is determined to be ready for customer delivery.

Chronicle of Events

The chronicle of events described is that when the alleged completed fuselage destined for Alaska Airlines was first received and inspected at the Boeing 737 production facility, workers reportedly spotted bad parts related to the rear door assembly. The account notes that because of the highly managed timing sequence of the aircraft assembly process, there was not adequate time or resources to perform an immediate fix because the fuselage was destined for its initial assembly sequence. Thus, the required fix was logged with traveled work, with the expectation that such work would be completed at a later, more opportune time in the production process.

The report indicates that it was 19 days later before workers had allegedly completed the repair, but what has been unclear or undocumented is whether the four fastening bolts for the door were installed.

This report additionally cites Boeing CEO Dave Calhoun as directly indicating that line workers know what traveled work is and: “It’s uncomfortable. It creates opportunities for failure.”

An Ongoing Challenge

Further noted in this report, four years ago in the aftermath of the two fatal airplane crashes involving the 737 MAX, Boeing had outline five values central to improving overall aircraft safety, and traveled work was number three on the list.

Workers reportedly indicated that addressing traveled work has remained challenging because production lines are geared to an output cadence where there is little tolerance for added delays. Ongoing supply chain disruptions related to late arrivals add to the pressures for maintaining a monthly output cadence. Instead, such work is scheduled later and according to some interviewed and cited in the WSJ report, performed in less than ideal locations such as a post-assembly aircraft storage parking location with less than ideal working conditions.

Multi-Industry Production Methodologies

Once again, our readers who have either auto industry assembly line or discrete manufacturing assembly line experience also know of such challenges.

There are tenets of the Toyota Production Line and other production systems methodology that have successfully addressed such challenges.  They involve manufacturing and product engineering managers resident at production facilities to assist in either an immediate assessment of the non-conforming issue to determine impact and fix, or recommending movement of the assembled product to a non- production repair area for needed rework.

The challenge for large aircraft manufacturers are that assembly lines occupy cavernous production line facilities and that moving an aircraft off the line involves considerable logistical, timing and added worker challenges.

Rival Airbus, in designing its newest production line facilities for the A320/A321 product family have incorporated augmented factory line automation to be able to more readily and flexibly move complete aircraft assemblies within the production facility.

Solving traveled work further brings to the forefront the criticality of inspecting aircraft at the final acceptance stage at the designated supplier’s facility, such as Spirit AeroSystems.

 

Change in Corporate Bonus Structure

A further related development last week involved Boeing announcing a change in the plane maker’s existing employee bonus performance compensation program.

According to a Boeing communication, workers within the commercial aircraft business unit will now have upwards of 60 percent of their annual incentive bonus score predicated on safety and quality metrics.

Prior to this announced change, upwards of 75 percent of the bonus score for non-unionized workers was predicated on the company’s financial performance metrics while the remaining 25 percent were based on operational milestone performance.

Keep in mind that Boeing’s production facilities span both unionized workers in the 737 MAX production complex in Everett, Washington, and non-unionized workers at the South Carolina based production complex assembling the 787 Dreamliner aircraft family.

In either case, this revised bonus structure sends a clear message regarding what behaviors and focus need to change and have added emphasis. That stated, strong leadership is a further determinant, and that includes whether bonus performance targets change at the highest executive levels.

 

Final Note

As a final note, there will surely be added developments and further implications brought to light in the coming weeks and months. The stakes are high, both internally for Boeing and externally for this industry and its extended supplier networks.

 

Bob Ferrari

© Copyright 2024, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.