Boeing fires warning shot at sub-par suppliers

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Boeing has launched a top-level review of the supply chain to drive down costs and punish vendors that have performed in bad faith.

The supply chain review has already led to sourcing changes with the introduction of the 737 Max programme, the fourth derivative of the original 737-100 introduced in 1967, says chief executive James McNerney.

McNerney, speaking during a Boeing investor conference in Charleston, said the new strategy would also be applied to a limited degree on the double-stretch 787-10X and with more freedom on the re-engined and re-winged 777X.

Suppliers that abuse positions on particular programmes, to charge what customers consider to be unfair prices, or fail to improve performance, will face repercussions across Boeing's supply chain.

"There will be a corporate no-fly list," McNerney says.

The strategy is partly enabled by Boeing's growing commercial and defence revenues, which provide the company with greater leverage in negotiations with suppliers on new programmes, he says.

McNerney, however, acknowledges that suppliers are not entirely at fault when programmes face cost and technology issues.

"I'm sounding like Darth Vader here," he says. "But we are collaborating. We realise we part of the problem."

Boeing's review, to be handled at CEO level, follows an effort launched last year by its Commercial Airplanes division to reduce the level of single-sourcing in programmes like the 787 and 737.