On April 9, 2008 Crain's reported that Boeing is now more than a year behind its original production schedule of the new 787. This is fourth delay with the 787, coming less than three months after the last one and further undermines Boeing's credibility on the program. Boeing currently has more than 50 airlines that have placed nearly 900 orders for the top-selling plane. It is expected that buyers are likely to seek compensation for the delays.

Boeing has employed an unprecedented jetliner manufacturing process that assembles a jet from components manufactured largely by other companies and as such has run into multiple problems related to outsourcing involving contractors in numerous countries. The company said that while significant progress has been made assembling the first airplane (what else would you expect them to say), it is rescheduling the first flight. The story cited an analyst who stated Boeing could face extra costs exceeding $4 billion because of the delays and late penalties to the airlines. The company earned $4.1 billion in 2007. 

This story intrigues me because it does exhibit the fragile nature of a companies supply chain and the enormous cost and public image hits a company faces when it breaks. It also shows that lean alone is not enough to control costs and assure high levels of customer service. In our prior posting, we discussed how Boeing bought a 50% stake in one the companies that were creating problem in order to directly apply lean manufacturing principles within the supplier. It appears that the problem extends beyond the one supplier and is epidemic across the entire supply chain.

Now I want to be certain our readers do not assume that I am asserting that lean is not a critical manufacturing strategy – it is and should be adopted fully at all companies. However, if all the parts both within and outside of your organization are out of synch, an inter-lean implementation does little if your suppliers our out of whack.

All this is generating a string of other thoughts that I will be writing about in the near future. But first my next post will be related to chapter 12 in the book “The World is Flat” by .about Dell’s supply chain which is a great example of a fully synchronized supply chain.