Once again, its time for another supply chain related announcement associated with Boeing, but this one should be viewed somewhat as positive in nature The Twitter #supplychain forum was actively re-tweeting articles summarizing the latest remarks from Boeing CEO Jim McNerney, who specifically cited concerns related to supply chain as potentially hampering Boeing’s ability to meet increased new aircraft orders, and potentially hampering future business needs.

I found a Financial Times article (free preview sign-up account may be required) as the most insightful commentary to this story.  The FT article cites McNerney as noting that a industry-wide growth across the entire aerospace industry, including Airbus,  has constrained many of the key suppliers to this industry. Boeing wants to up production of its 737, 777, and 747 models during the next two years, but suppliers are obviously raising cautionary notes.  Unmentioned, and in my view succinct to this situation, is that past delays, setbacks and communication issues on Boeing’s 787 Dreamliner program have made aerospace suppliers rather wary and cautious.  Key suppliers are now faced with important decisions on whether to invest in added capacity, or may demand more financial safeguards from Boeing and other aerospace OEM’s.

Boeing also continues to deal with specific supplier issues.  The FT article notes that it will no longer source aircraft seats from Japan based supplier Koito, after that supplier admitted it had falsified test results on as many as 150,000 seats provided to Boeing.  The company is also coming to grips with previous attempts to outsource major portions of production work to external suppliers without balancing all the various product design, engineering, and production risks, and without a seamless two-way flow of communications and expectations. Boeing also continues in its plans to ramp-up a second final assembly facility for its 787 Dreamliner production near Charleston, South Carolina, and adjacent to its major fuselage assembly supply.

From were we sit, the Boeing CEO acknowledgement of the critical importance that the supply chain will provide to Boeing’s future business is a rather noteworthy acknowledgement that Boeing senior management now gets it- supply chain matters!

Bob Ferrari