Posted by: knightbird | September 2, 2013

Boeing and Airbus

I have used Boeing as an example for lean implementation in the past. I decided I needed to know more about their lean conversion, so I picked up “Boeing versus Airbus” by John Newhouse. The book gives a fascinating explanation of the competition between 2 strong companies. Boeing has a long pedigree. Airbus is an upstart. Both companies use lean manufacturing as a competitive strategy, but Airbus was first to the table.

Newhouse states that Boeing leadership was a huge impediment to productivity.  Phil Condit, President of Boeing in the 1990’s, was indecisive. His second in command probably made decisions too quickly and focused on sales by wringing unrealistic budget concessions by the production executives, then blaming them for not meeting their projections. Sounds familiar to me. Boeing engaged consultant Jim Womack between 1995 and 1997 to help them with their lean transition. Boeing executives were sent on a rapid leaning trip, both figuratively and literally. At the time, Boeing had $3.5 billion in inventory and more than twice as much factory space as Airbus.  Airbus has a 12-15% cost advantage over Boeing at the time. Boeing suppliers were no better, often unable to deliver product when they had committed to.

Womack wanted them to cut production time in half, reduce costs by half and eliminate a lot of executives. Because Womack was rather blunt in his assessments to Boeing leadership, he left Boeing in 1997. Boeing made a huge mistake, but it was a part of their learning curve and was to be expected. It still had too many traditional business leaders. It took another five years before Boeing because serious about lean.

Boeing has since achieved substantial lean improvements. They assemble airplanes by continuous flow. Their airplanes move at a pace of 2 inches per minute. The understand Takt time and cellular construction. The line is the beneficiary of 5S. Work is handled using carts of inventory delivered just in time. Andons are all around the plant. One story I heard about years ago involved an employee seeing a conveyor used for harvesting vegetables in Eastern Washington and thought about how it might help Boeing install seats during the assembly process. This YouTube video shows how an airplane flows through assembly. The conveyor can be seen stating with the staging of seats at about 3:20 in the video.

As a lean consultant, my primary challenge is to convince executives of the benefits of lean. And then to guide them through the hard work to change their management culture, learn the tools and reap the benefits. In my experience, and it was initially inexperience, the gains can start rolling in within a couple of years. It took me five years to be comfortable that we had achieved a cultural transformation. I am not sure that parts of the gains aren’t being dissipated. I was working on leaning our accounting functions when I left. It takes particular dedication to make progress in improving accounting, but it can be done. I just need to convince potential clients of the huge potential.

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Responses

  1. Thanks to Mark Graban for correcting me on the correct name of Mr. Condit. It is Phil, not Tom. And for also helping me to clarify that Jim Womack was engaged as a consultant and not hired as an employee.

  2. Anxious to read how you addressed sustainability of benefits gained from your own lean start -ups. Once lean implementations have plateaued, surely new lean opportunities will surface.
    ” I am not sure that parts of the gains aren’t being dissipated. I was working on leaning our accounting functions when I left.” Do you feel this will effectively show dissipation from gains?


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