On 15 December 1996, Boeing and McDonnell Douglas disclosed plans to merge into the world’s largest aerospace company. The following month, Boeing pulled the plug on development of the 747-500/600 and then-chief executive Phil Condit commissioned a new team to transform how the airframer designed, manufactured and marketed aircraft. The Aircraft Creation Process Strategy (ACPS) laid conceptual groundwork for the 787’s global production system and business model.
Boeing's Everett 787 final assembley line
At its helm was master engineer Walt Gillette, responsible for the transition from the 737-200’s cigar engine to the high-bypass CFM56 fans on the 737-300 and the systems architecture on the clean-sheet 777. His mandate – and that of 110 other engineers from Boeing and 50 suppliers – was to slash the time and cost of bringing a new commercial aircraft to market by half. Boeing leadership concluded that the up-front development cost, believed to be double the $7 billion first budgeted, did not make returns quickly enough. Gillette and his team looked to standardise processes and platforms, make digital information sharing ubiquitous, increase use of monolithic assemblies and shift fabrication responsibility to suppliers which would share pre-certificated scalable technologies.
The ACPS acronym was dubbed “faster-better-cheaper” by suppliers vying to earn a spot as sole-source suppliers on the next new Boeing aircraft. If the airframer was to continue producing new commercial aircraft, it would have to find a way to shift and reduce the costs associated with clean-sheet designs.
Following creation of the ACPS, Boeing explored a series of concepts, contemplating its next big move after the 777 and Next Generation 737 – and pondering another variant in the 747 family, while building the 717 inherited through the McDonnell Douglas merger, along with the 737-900, 757-300, 747-400ER and 767-400ER derivatives, and developing the 777-300ER and -200LR.
By February 2000, ACPS has been merged with the New Small Airplane (NSA) study under the revamped Product Strategy and Development (PS&D) organisation, which spawned “Project 20XX”. With assistance from its Phantom Works division, this mutated into three code-named projects: Glacier, Redwood and Yellowstone. Each represented a different middle-of-the-market configuration. Glacier would become the high-speed Sonic Cruiser, Redwood a blended wing body, and Yellowstone a 777-style configuration.
Shelving a 747X effort, Condit would reveal 20XX’s existence in January 2001, announcing Boeing’s intention to focus on a 757/767-sized replacement, days after the Sonic Cruiser’s existence – as revealed by a patent – was reported by The Wall Street Journal. Boeing made the Sonic Cruiser’s debut official in March, with Gillette as programme manager.
The Sonic Cruiser met a cool response from the market in 2001, and after the 11 September attacks, airlines – facing economic slowdown and the possibility of further attacks using commercial aircraft – shifted their focus from speed to survival. Boeing’s Sonic Cruiser technology development team would become the primary first-tier 787 suppliers.
In January 2002, Boeing named Japan-based suppliers Mitsubishi, Kawasaki and Fuji Heavy Industries as 787 technology partners. In February, Italy’s Alenia Aeronautica and Vought Aircraft Industries came aboard and, in April, Boeing de Havilland of Australia and Boeing’s commercial unit in Wichita, Kansas.
As commitment to the Sonic Cruiser began to wane, Boeing introduced a conceptual “reference” aircraft against which the M0.98 jetliner was measured. The “Super Efficient” concept envisioned an aircraft that would fly 15-20% faster than then-contemporary aircraft while reducing fuel burn by 20%.
Sonic Cruiser met its unofficial demise on 26 October 2002, when Boeing assembled in Seattle representatives from blue-chip customers from around the world, all of whom voted for efficiency over speed. By December, Sonic Cruiser was dead, but the team Boeing assembled to build it remained together. Project Yellowstone became the majority-composite 7E7 family, led by Mike Bair.
Boeing’s desire for an aircraft that pushed performance “higher, faster and further” had lost to a “faster, better and cheaper” model in the eyes of customers, which deemed the business case incompatible with the modern operating environment of declining yields and price competition. Boeing’s mid-size long-range jetliner took on a conventional configuration to bolster the bottom lines of its customers, but the supply chain was designed to retain the “higher, faster, further” DNA.
When the 7E7 was given its official go-ahead on 16 December 2003, granting authority to offer the new twin to airlines, Boeing revealed its selection of its Everett, Washington, facility as for final assembly, continuing the tradition of building legacy widebodies at Paine Field – and beating out competition from Kinston, North Carolina; Charleston, South Carolina; and Mobile, Alabama.
The 7E7 – which would become the 787 when Boeing received a 60-aircraft order from Chinese airlines in January 2005 – was to have a significantly different line from the 777’s. Arriving fully completed from suppliers, the sections – stuffed with all the necessary systems – would be joined on a pulse line. Boeing imagined the factory building 10 787s a month by the end of 2009.
The 7E7 programme’s supply chain foundations drew conceptual inspiration from a business model employed by McDonnell Douglas on the MD-95, and later by Boeing on the 717. Known as return on net assets or RONA, the ratio compares bottom-line profit with the overall scope of the programme’s assets, to identify how much money is being made in terms of the work required. Boeing’s chief at the time of the 7E7 launch in late 2003 was RONA advocate Harry Stonecipher.
© Jon Ostrower/Flightglobal
Boeing took control of centre-fuselage integration
Boeing sought to reduce its industrial footprint, retaining only manufacturing of the 7E7’s vertical stabiliser in Frederickson, Washington, forward fuselage in Kansas, wing-to-body fairing in Winnipeg, Canada, and movable trailing edges at Boeing Aerostructures Australia. This amount to a 35% value share. And Boeing would conduct final assembly, as a large-scale systems integrator. “Clearly, we were way too focused on not having assets on the , and having the right level of assets is the right way to run a business,” reflected Bair in a 2011 interview.
Boeing continued to shrink its footprint, in the process creating the world’s largest aerostructures manufacturer in February 2005. Boeing’s Wichita, Kansas, commercial division – already responsible for the same work on the 777, 747, 767 and 737 programmes – would develop the forward fuselage Section 41. But Boeing divested its Wichita and Tulsa, Oklahoma, operations to Onex and Goldman Sachs, netting $1.2 billion.
Vought Aircraft Industries, responsible for fabricating the 787’s aft fuselage Sections 47 and 48, established a 35,400m2 (381,000ft2) facility at Charleston International Airport in North Charleston, South Carolina. And Alenia Aeronautica – responsible for making the Section 46 barrel and Section 44 bonnet fuselage structures, which covered the centre wing box, in Grottaglie, Italy – partnered with Vought to create Global Aeronautica.
With a 31,000m2 facility, the 50:50 joint venture in Charleston would be responsible for structural integration and systems installation of the centre fuselage, made up of Kawasaki Heavy Industries’ Section 43, and Fuji Heavy Industries’ 45/11 centre wing box and main gear wheel well, as well as Alenia’s Sections 44 and 46. Alenia would supply the horizontal stabiliser from Foggia, Italy.
Boeing’s Japanese partners – major suppliers to the 767 and 777, representing 15% and 20% of the aircraft by value, respectively – would account for the single-largest workshare of any one country: 35%. Fabrication and assembly of the wing boxes were assigned to Mitsubishi Heavy Industries, in Boeing’s first outsourcing of wings. With the Wichita divestment, Boeing was left with a 23% share of 787 aerostructures; only the vertical stabiliser would be built in thePacific Northwest.
TRIALS AND TRANSFORMATIONS
There followed a three-year, multibillion-dollar trial by fire. A sputtering supply chain delivered a partially complete first aircraft to final assembly in spring 2007. Boeing’s woes, driven by widespread design changes, spread back to its suppliers and their suppliers. Without adequate visibility, oversight and design authority, Boeing would wrestle with incomplete tasks and workmanship issues.
In March 2008, Boeing paid $55 million for Vought’s half of Global Aeronautica. Teetering on the financial brink, Vought was provided with much-needed cash to stay afloat. And Boeing gained much-needed oversight into the operations of 787’s centre fuselage integration facility. South Carolina would later become home to Boeing’s first non-legacy final assembly line outside the Pacific Northwest.
In December 2008, Boeing launched its round-the-clock Production Integration Center to tie together the airframe’s global network of suppliers through seamless digital communications, monitoring everything from natural disasters to shipset progress.
Boeing would acquire Vought’s aft fuselage fabrication facility in July 2009 for more than $1 billion and complete its takeover of Charleston in December by buying Alenia’s remaining 50% of Global Aeronautica. The $1.2 billion the airframer had earned from its Wichita divestment had been almost entirely spent on creating a South Carolina division. And Boeing had returned its share to 35% by value.
In the wake of the September-October 2008 International Association of Machinists and Aerospace Workers union strike, Boeing selected Charleston for its 92,900ft2 second 787 final assembly line. “The overriding factor was not the business climate, and it was not the wages we’re paying people today. It was that we can’t afford to have a work stoppage every three years,” Boeing Commercial Airplanes chief executive Jim Albaugh would tell The Seattle Times shortly after the selection.
The maiden flight of Boeing's 787 took place on 15 December 2009
The airframer established a secondary vertical stabiliser fabrication line exclusively for Dreamliners assembled in South Carolina. The 3,250m2 line is expected to deliver its first tail to the North Charleston line for the third 787 to be assembled there. The Charleston line, operational since mid-2011, will build three of 10 787s per month by the end of 2013, with the balance shared by the primary Everett line and a companion surge line.
For its larger 250–290 seat 787-9 and its late 2013 entry into service, Boeing has continued to redraw supply chain lines, bringing around 70% of engineering work back within its own four walls. Frustration with issues at Alenia, coupled with fundamental architecture changes in the 787-9’s horizontal stabiliser, prompted Boeing to take back both design and early fabrication work in 2011. Further, Boeing will initially build the -9’s horizontal stabiliser at its Seattle Developmental Center and move the work to a yet-to-be defined vendor operating alongside Alenia, which retains responsibility for the -8’s stabiliser.