AMERICAN NEWS


Boeing: lean manufacturing key to fastener supplier profits


Special interview by JohnWolz, GlobalFastenerNews.com The Boeing Company executive in charge of the 635 million fasteners the airplane maker is projected to use in 2012, isn’t just overseeing paperwork. John Byrne has toured most of the fastener manufacturing facilities from which Boeing buys. “There are very few I haven’t been in,” the director of common commodities and supplier management for Boeing commercial airplanes noted.


A


nd what has Byrne seen in fastener plants? Opportunities for lean manufacturing, he said in an interview with GlobalFastenerNews.com at Boeing’s Everett, WA facilities north of Seattle.


The first 16 years of Byrne’s 24-year Boeing career were


spent in plant operations, where he found “ample opportunity” for the aerospace giant to cut costs. There are very few industries that have maximized lean manufacturing opportunities, Byrne believes. Labor and energy costs for fastener manufacturers may rise,


but the overall “operations should be able to improve” and thus offset cost escalation through productivity and lean techniques. Byrne cited the transition of the Boeing 737 production to


a moving line, which jumped from 28 planes a month to the current level of 31.5 increasing to 38 in 2013. That production increase was “yielded from just good, solid, lean manufacturing applications,” Byrne declared. Boeing wants suppliers to


Boeing can help level some of those variables, he added. As


a major buyer of titanium and other metals, Boeing has some advantages in the market they can share with suppliers. Byrne emphasized that Boeing knows the difference between


cost and price. “Cost is not the price,” he said in noting the importance of “total value” rather than “low cost.” However, cost is “one of the key contributors to value.” Beyond


buying the fasteners, the total cost includes the assembly cost, he added. Byrne has responsibility for commodities from raw materials


including aluminum, titanium and nickel. As part of his duties he in charge of standards, including mechanical, electrical and fastener standards. “We want to take waste out of the supply chain,” Byrne told


GlobalFastenerNews.com In 2009, Chicago-headquartered Boeing revenue totalled


US$68.3 billion and at the beginning of 2010 the company had a backlog of orders totalling US$316 billion. Innovations are welcome from fastener


manufacturers, but merely suggesting increased capabilities without offering justification on how it will solve a problem is not a way to increase the price of the fasteners sold to Boeing. “We will only pay for value-added activities,” Byrne explained.


Selling fasteners to Boeing What is most important for fastener companies


wanting to sell fasteners to Boeing? “It’s our plane these fasteners are going on,” Byrne


responded. Fastener suppliers “need to understand our customers’ need for consistent, high quality.” There are not likely to be many suppliers of


highly engineered fasteners to Boeing. The multiple engineering requirements for aerospace fasteners “tend to place constraints on how wide a supplier base you can have,” Byrne explained. His staff of thirty conducts a “rigorous qualifying process, which reduces the number of suppliers.” Other industries such as automotive can have wider supplier bases.


make “appropriate profit margins,” but Byrne expects fastener manufacturers to gain through lean manufacturing rather than price increases to Boeing. Byrne said Boeing recognizes the problem of metal price


volatility and other costs to the fastener manufacturer and will work with them on “variable pricing solutions.”


“A procurement agent may prefer 20 suppliers, but that is not realistic in aerospace fasteners,” he said. Byrne does want “two or three qualified candidates for all parts.” An exception could be unique intellectual property fasteners


where there may be a sole source. In such cases licensing may be necessary.


22 Fastener + Fixing Magazine • Issue 67 January 2011


Courtesy of Boeing


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