Supply Chain Management: Coordinating the puzzle to fit together at the perfect time and place.

June 3rd, 2010 at 09:42am David Bush - Iasta

I recently had a conversation with one of my employees about his trip to Seattle where he shared about his trip to the Boeing museum and a tour of their facilities. This immediately made me think of a video story I watched about Boeing’s supply chain.

The news story went into detail about the lessons they have learned about managing a supply chain and its risk while building the enormous 787 jet aircraft. Here are the highlights of the story.

Boeing global supply chain builds nearly every component of their planes outside the US. Hundreds of suppliers are coordinated like a fine orchestra to build a 737 efficiently and on time. Boeing is an expert in getting all the parts in the right place at the right time, and then putting them together quickly. As they fully understand, it is a fine balance to understand how much to outsource in parts production and how much to build local. This balance is key to maintaining budgets and productions schedules. The video points out that Boeing is all too familiar with this lesson with their very, very late release of their 787 jumbo jet.

They relied on more internal production of the plane and less on outside suppliers. As with all changes from incumbent to a new supplier, there was a price associated with that decision. Their internal production could not keep up with the schedules demand to have a finely-timed project which pieced the aircraft together. With every late shipment of parts the project was stalled and extended until the project was significantly over budget and several years past its delivery date.

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Entry Filed under: General