Boeing_a Case Study On Jit And Lean Operations 6w4x67

BOEING A case study on JIT and Lean Operations

Mark Louie Baluyut Candy Anne Patoc

October 10, 2017

Table of Contents About the Company............................................................................................................... 3

I.

A. Brief Background ............................................................................................................... 3 B. Overview of the Advanced Operations in Boeing .............................................................. 4 II.

JIT and Lean Operations .................................................................................................. 5

A. JIT and Lean Manufacturing Defined ............................................................................. 5 B. JIT and Lean Operations in Boeing ................................................................................. 7 C. Effect of JIT and Lean Operations in Boeing ............................................................... 10 III.

Conclusion ........................................................................................................................ 12

Table of Figures Figure 1 Lean Principles .................................................................................................................. 6 Figure 2 Toyota Production System ................................................................................................ 8 Figure 3 Boeing Production System ................................................................................................ 9 Figure 4 Boeing before and after CBO .......................................................................................... 10 Figure 5 Boeing Renton Wasington site ....................................................................................... 11

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I.

About the Company A. Brief Background Boeing is the world's largest aerospace company and leading manufacturer of commercial

jetliners and defense, space and security systems. A top U.S. exporter, the company s airlines and U.S. and allied government customers in 150 countries. Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and performancebased logistics and training. Boeing Commercial Airplanes is committed to being the leader in commercial aviation by offering airplanes and services that deliver superior design, efficiency and value to customers around the world. There are more than 10,000 Boeing commercial jetliners in service, flying engers and freight more efficiently than competing models in the market. Boeing Defense, Space & Security is committed to providing customers around the world with the right capabilities, at the right time, at the right cost. As one of the two main business units of the world’s leading aerospace company, BDS specializes in innovative, capabilities-driven solutions across platforms, services and , and information and technologies. Headquartered in St. Louis and with significant operations in many states and several countries, Boeing Defense, Space & Security is a $30 billion business that has approximately 50,000 employees worldwide. Boeing Global Services delivers complete, cost-competitive service solutions for commercial, defense and space customers, regardless of their equipment's original manufacturer. With engineering, digital analytics, supply chain and training spanning across both the government and commercial service offerings, Boeing Global Services is uniquely positioned to keep engers flying, and nations safe. (Our Company, 2017) 3

B. Overview of the Advanced Operations in Boeing a. Design 

use of Computer- Aided Design (CAD) to design airplanes

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Avoids cost of the mock-ups

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Shortened development time

b. The Production Process 

JIT inventory of parts and materials

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Monitoring by expediters of the progress of replaced parts

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Boeing owns a machine shop that manufactures parts

c. Testing and Quality Control 

Test pilots before production using computerized wind tunnel

d. Reengineering 

Lean production- reduce production time and inventory

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Late-stage customization or delayed differentiation

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Delivery of assembled parts or kits instead of separate parts

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Reduced number of suppliers

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II.

JIT and Lean Operations A. JIT and Lean Manufacturing Defined Many confuse the concepts of Just In Time (JIT) and Lean Manufacturing. Scott

Thompson, journalist for the Houston Chronicle outlines the differences between the two. Thompson writes, “Just-in-time manufacturing is focused on efficiency, while lean manufacturing is focused on using efficiency to add value for the customer. Just-in-time manufacturing can be practiced on its own or as one step in the lean manufacturing process.” (Lean Manufacturing vs. Just-in-time, 2016) Just in Time (JIT), as the name suggests, is a management philosophy that calls for the production of what the customer wants, when they want it, in the quantities requested, where they want it, without it being delayed in inventory. So instead of building large stocks of what you think the customer might want you only make exactly what the customer actually asks for when they ask for it. This allows you to concentrate your resources on only fulfilling what you are going to be paid for rather than building for stock. Within a Just in Time manufacturing system, each process will only produce what the next process in sequence is calling for. (Just-in-Time (JIT) Production, 2017) On the other hand, Lean Manufacturing is a term that has been around now for many years, originally spawned within the MIT study that led to the book “The Machine That Changed the World” by Womack and Jones in 1990. However if you search through the many publications and web sites looking for a lean manufacturing definition you will find a myriad of differing definitions for Lean, partly because lean is a continuously developing philosophy and because it’s application is different for each and every company.

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Lean has had a number of names over the years, developed primarily from the Toyota Production System (TPS) it has been called World Class Manufacturing (WCM), Continuous Flow Manufacturing, and Stock-less production to name a few. Today you will even here Lean Sigma and Agile Manufacturing. Although developed mainly within manufacturing, Lean is equally applicable within your office based istrative functions or within service industries such as healthcare where it is seeing a huge amount of attention. Lean Manufacturing Tools include 5S, Jidoka, Kaizen, Process Mapping and TPM. (What is Lean, 2017) In their book “The Machine That Changed the World” Womack and Jones define 5 principles of Lean Manufacturing. These Lean Principles define the philosophy of lean.

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Figure 1 Lean Principles

There are other ways JIT and Lean differ. Lean is a complete system that can be used across business departments including manufacturing, production, marketing, distribution, etc. You can use Lean to create a JIT process but JIT is the piece of the Lean method that eliminates the waste of excessive inventory.

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B. JIT and Lean Operations in Boeing As early as World War II, Boeing employed methods to build the B-17 that would be considered Lean today. The driving need for planes and the restricted resources for manufacturing necessitated streamlined processes with minimum waste. The sense of urgency faded after the war, and so did the use of Lean methods. In the mid 1980s Boeing began its Lean journey with the introduction of Quality Circles or Productivity Circles. This was followed by World Class Competitiveness training, 5S, and Justin-Time workshops. Learning to use individual Lean tools like accelerated improvement workshops, or AIWs, provided the foundation on which Boeing Commercial Airplanes created an integrated Lean strategy. The whole of The Boeing Company was embracing Lean by 1999. The strategy for becoming a Lean operation is called the 9 Tactics. A visual representation to show the entire company how all the elements of Lean fit together has evolved. Based on the Toyotal Production System, it is called the Boeing Production System. 5S was the next corporate push, which may be the first corporate-wide step that was recognizably Lean. The 5 S’s are Sort, Simplify, Sweep, Standardize, and Self-Discipline. Every area was required to progress from level 1 through 5 of 5S. Massive amounts of material were surplused, recycled, or otherwise removed from areas. The Boeing Surplus Store in Puget Sound became a great shopping place for the public. Work processes became documented and standardized through 5S team meetings in office and factory areas. Boeing had three primary business units, Commercial Airplanes, Aircraft and Missiles, and Space and Communications. All the managers in this huge merged company are trained together in St. Louis at the Boeing Leadership Center. The Coffee Game was developed for the Boeing

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Executive Program. It is a simulation of the entire Value Stream, from coffee growers, through roasters and transportation companies, distribution and finally, to coffee drinkers at the Boeing Leadership Center. A primary lesson is the importance of cooperation between suppliers and customers. This Coffee Game has since been incorporated in the Boeing Six Sigma Black Belt Navigator training at the Leadership Center. Moreover, the Boeing Operations Council (BOC) formed a Process Action Team (PAT) for Lean. They have regular face-to-face meetings as well as frequent virtual meetings, to share ideas and plans. They make sure that training is standard across the enterprise, and strive for the Lean ideal of standard work. On the other hand, Toyota uses a visual display to show how all the elements of a Lean production system fit together. They call it the Toyota Production System (TPS), shown below. It looks like a house, with a roof, two pillars on the left and right, internal structure, and a foundation.

Figure 2 Toyota Production System

Boeing, like other companies that are incorporating Lean, customized the TPS house into the Boeing Production System (BPS) house. This visual aid showed the entire company how the

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various pieces of Lean all fit together. The latest version of the BPS house re-emphasizes the elimination of waste in the foundation.

Figure 3 Boeing Production System

Boeing departed from the Toyota model when they developed the Tailored Business Stream (TBS) approach. TBS divides Commercial Airplane products into three ‘streams’, to arrive at simpler, more usable, cost-effective processes and solutions. Instead of deg and producing every airplane as if it were unique, they now divide all the elements of work (e.g., parts, processes, activities, data) into three categories: Basic and Stable, Reusable (including available options), and Custom. (Pilla A Leitner, 2004) To Boeing, Lean has much more substance than any trend or phrase. Simply put, Lean is a systematic way to identify and eliminate waste, as well as streamline processes in a more efficient and cost-effective manner. Lean helps spark new ideas to improve quality and reduce costs and

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cycle times with an eye on how to drive innovation and change forward rather than remain bogged down in past mistakes, red tape or time-wasting redundancies.

C. Effect of JIT and Lean Operations in Boeing Boeing began implementing lean manufacturing principles in 1993. Consumption-based ordering uses the advantages of just-in-time ordering and the value of close partnerships with suppliers. The result is a more efficient system with benefits for Boeing and its suppliers. The CBO system establishes a minimum and maximum number of items that each supplier needs to maintain in the Boeing inventory. Suppliers check the inventory and ship items in time to maintain that range. To do this, the suppliers check the Boeing inventory to the number and status of their supplied parts. To protect both Boeing and its hundreds of suppliers, the CBO system gives access only to the portion of the inventory with that supplier's parts. (Vidya, 2014) Here’s a comparison of the status of Boeing before and after the implementation of the CBO system from the “Boeing frontiers”:

Figure 4 Boeing before and after CBO

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Figure 5 Boeing Renton Wasington site

In addition, Boeing takes its use of hazardous materials and environmental compliance seriously, and the Everett, Wash., site is stepping up to implementing an international standard called ISO 14001. It provides a framework for managing and demonstrating an effective environmental program. In addition, Boeing’s continuing Lean efforts benefit the environment. Through case-study work done with the Environmental Protection Agency, Boeing has demonstrated a synergy between Lean and the environment. Consider the following: o Lean manufacturing results in a decreased facility footprint as inventory is delivered just in time. This releases resources for use by others. o Smaller footprints decrease energy requirements and water usage, and cut the impact from storm water runoff from building roofs and parking lots. o Lean efforts such as kitting result in decreased chemical usage. Kits contain just what’s needed, and there’s no waste from overstock spoilage. The Boeing Renton (Wash.) site had a significant reduction (more than 20 percent) in chemical use right away as Lean was implemented. (Arkell, 2006) In addition, here are some of the several improvements Lean Manufacturing contributed in the operations of Boeing. Boeing's St. Charles Weapons Enterprise Capability Center and Mesa Rotorcraft site – where the Apache helicopter is built – have been awarded the 2004-2005 Shingo Prize for Excellence in Manufacturing. This is the first time Boeing has won what Business Week has called 11

the "Nobel Prize of manufacturing." They reduced manufacturing time by 60% and floor space by more than 50%. In the Commercial Airplanes parts plants, employees reduced inventory levels by $1 billion in 1999. The 737 program is now giving tours of their moving line to employees from all over the country, suppliers, and customers. Since late 1999, just before Lean implementation began, to the end of 2004, they reduced factory cycle time 46%, store inventory 59%, work-in-progress inventory 55%, and factory footprint 21%. Flow time in Final Assembly have decreased from 22 days to 11 days, with a goal of 8 days. (Pilla A Leitner, 2004)

III.

Conclusion To conclude, the lean manufacturing process have been so tremendously advantageous to

the supply chain of the company while being environmentally sustainable and a great help as well in the other aspects of the company, from design, production, quality control and to the different functions in Boeing. As a result, Lean is an employee-driven philosophy that helps Boeing stay highly competitive and nimble in a continuously evolving global business and technical landscape.

Lean is a concept so critical to Boeing that the company's Vision 2016 mission statement lists it as a core competency.

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References Arkell, D. (2006). Movement Improvement. Boeing Frontiers. Just-in-Time (JIT) Production. (2017). Retrieved from Lean Manufacturing Tools: http://leanmanufacturingtools.org/just-in-time-jit-production/ Lean Manufacturing vs. Just-in-time. (2016, September 15). Retrieved from Online Kettering: https://online.kettering.edu/news/2016/09/15/lean-manufacturing-vs-just-time Our Company. (2017). Retrieved from Boeing : http://www.boeing.com/company/ Pilla A Leitner, P. (2004). THE LEAN JOURNEY AT THE BOEING COMPANY. Seattle, WA: The Boeing Company. Vidya, R. (2014, February 3). Boeing: Making Lean Manufacturing Fly. Retrieved from Blogspot: http://cmuscm.blogspot.com/2014/02/boeing-making-lean-manufacturingfly.html What is Lean. (2017). Retrieved from Lean Manufacturing Tools: http://leanmanufacturingtools.org/34/lean-manufacturing-definition-2/

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