In the wake of Boeing's painfully long delays on filling orders for its new 787 Dreamliner, they have decided to take a closer and more critical look at the production supply chain. In a reactive state for the last few years, Boeing's suppliers have struggled to keep up with production as jet demand surges. According to a Wall Street Journal Article by David Kesmodel, Boeing has hired over 200 engineers and supply chain professionals to assist in the transformation. Boeing will be applying the "stress test" and a number of other critical evaluations regularly to over 1,000 suppliers to see how they perform under various high demand and critical lead time scenarios.

My question is, why are they doing this just now? Some could argue that this is common among companies with plenty of laurels to rest on from hefty government contracts; they were recently awarded a $30 billion contract to supply refueling aircraft to the Air Force. Both Qantas and Virgin Atlantic decided on the Airbus 330 over the 787 based on Boeing's delays, ouch.

While this is a large manufacturing setting with a Fortune 500 company, the same preparation needs to made for a business of any size. You should ask yourself if your suppliers are prepared for critical scenarios. Are your suppliers able to grow with you? Are they adaptable to constantly-changing process and design changes? These are very general questions, but they touch on a subject which I have brought up before: Supply Chain Risk Management. Strategic Sourcing Services from Source One not only identify cost savings and process improvements, but fully evaluate a supplier's ability to grow, change, adapt, and meet customer servicing needs.
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Scott Decker

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  1. As long as Boeing uses medieval measurements that nobody in the metric world understands and uses, it will be in a reactive position. Airbus builds its planes in modern metric units and can source them anywhere without encountering the fiasco Boeing had with the Dreamliner. One would think that Boeing learnt from that very expensive mistake, alas it did not. I am sure Airbus is pretty happy that the US and Boeing are stuck in the middle ages.

  2. I've read lots of articles about Boeing's outsourcing problems. The fatal mistake was to outsource product design which is supposed to be a core competency of the firm.