Regular readers know I reserve a special place in my heart for Rube Goldberg supply chain convolutions,
such as Boeing’s Dreamlifter and the Airbus Beluga. Fundamentally when you have to spend vast amounts of development and manufacturing resources on a product or tool that just enables you to transfer knowledge to suppliers (who may become competitors) and lengthen your supply chain, then something is wrong. It takes on an added dimension when you spin off one of your core operating groups, which then implements lean and becomes a very profitable supplier.
I had intended to simply post several photos of the Dreamlifter since, as the they say, a picture is worth a thousand words. I figured that those of you that try to slug through my thousand words every day would probably appreciate the break. But then an executive at Boeing had to go and actually brag about the Dreamlifter on his personal blog. That put me over the edge, again. As Randy Baseler, VP
Marketing, said,
You know, I often get questions – including a recent one in our comments – about whether we plan to take the Dreamlifter project into a full-fledged freighter line. But Boeing has no plans to do so. This is a special-purpose aircraft designed specifically to support 787 production.
That wasn’t the bragging comment I mentioned, but just a comment that would make a normal lean person jump up and exclaim "say what??" And Boeing is supposedly lean, at least in their own minds. Don’t bother leaving comments on his blog… they "welcome all comments but all comments are
moderated." Non sequitur indeed.
The Dreamlifter does look cool. It’s a marvel of engineering. And like most marvels it becomes a gleam in the eyes of kids… which is why there is already a toy version. I bet I know what the kids of Boeing employees are getting for Christmas!
Ok, I still haven’t gotten to the photos. Because our friend Mark at the Lean Blog sent along a related news story, which our new blog buddy Ron at the Lean Six Sigma Academy has also just commented on.
Boeing has outsourced most of the 787’s manufacturing to firms in Japan, China, Italy, South Carolina and elsewhere, while the company itself is concentrating on putting the plane together at its cavernous main facility in Everett, near Seattle.
Yes, that’s something to be proud of. Your core competency becomes snapping six pieces (ok, six very large pieces) together. But then Boeing’s warped understanding of lean, especially the metric of cycle time, comes into play.
Boeing said it will take about seven weeks to assemble the first plane. By the 100th plane, the company expects to lower that to six days and, ultimately, Boeing said a new 787 will roll out of its factory every three days. By comparison, Boeing said it takes an average of 14 weeks for the 777 to move out the factory door because much of the manufacturing is done by the company.
Using that logic I could assemble a Dreamliner in about 10 minutes if everything came complete except for painting the black dot on the tip of the nose.
I wonder what would happen if you added up the assembly time at each supplier, then the transport time, then the final assembly time. I also wonder what would happen if you added up total supply chain cost, including the cost of development and manufacture of that wonderful Dreamlifter fleet, the monster MOATT (mother of all tool towers) that is used to snap everything together, a room full of accountants to monitor foreign currency fluctuations, presumably a building full of supply chain analysts (and probably a team just to monitor and "adjust" the ERP… perhaps even SAP), all the multi-lingual training that had to take place at new foreign suppliers, the severance costs for the thousands of domestic workers laid off when work was outsourced, the value of knowledge transferred to those suppliers, the communication cost and cost of miscommunication with global suppliers instead of the subassembly plant next door, and the eventual lost business as some of those suppliers become competitors. I’ll stop there… you get my drift.
Is that lean? At Boeing it is. 
At least Boeing is having a little fun, and painted one of the Dreamlifters to look like a monster Oscar Meyer Weinermobile. If it’s a real photo. But who cares if it’s really real… just like Boeing doesn’t really care about "real lean." If it is, I wonder which final customer ended up paying for the cost, or reduction in delivered value, of that paint job. For that matter I wonder which customers are paying for the Dreamlifters themselves.
I guess all of them. And then ultimately us as the final customer.
Ken says
Did you noticed that our long lost commenter Barry “aka the hillbilly” predicted the Oscar Mayer livery of the Dreamlifter in a comment on the old post you referenced?
http://www.evolvingexcellence.com/blog/2007/01/rube_goldberg_t.html#comment-27429335
Denise M says
So building large contraptions and then taking great pleasure at your accomplishment. Self-pleasuring can be a wonderful thing, but not really productive…
D McMahon says
Holy crap – what the hell is the force on that hinge point on the Dreamlifter opened sideways? And in the air? Those are brave pilots. That other photo looks remarkably like a patient being intubated. Just so he can barf it back up.
Ken says
Kevin and “D” – did you notice that the box with the toy Dreamlifter had a “Warning – Choking hazard” on it? Hmmm… You can choke in more ways than one (and not your way, Denise!).
Rebecca Vanderbilt says
I have to say I disagree with your article. You are minimizing the savings that the Dreamlifter will bring to the supply chain.
Have you considered the logistical cost of shipping all the various parts/components using other methods? What is the cost of those in aggregate?
Boeing is transferring knowledge to the suppliers because these suppliers are willing to spend multiple billions of dollars (literally) to build the infrastructure to build the part. The savings is extremely significant.
Furthermore, you probably get much higher quality with parts from Japan than coming from USA. The fact of the matter is, we all know quality in the US is very poor even thou the labor unions would say otherwise. We no longer live in a bubble like those union workers.
Ed Dyson says
Rebecca – I think you miss a lot of points. Let’s run down your list:
– shipping cost. If they built planes like they did up until a few years ago, shipping would be minimal because the suppliers were factories literally next door, all Boeing (or immediate subcontractor) owned. True just-in-time could be created.
– transferring knowledge. What is the value of that savings when those suppliers become competitors? The Boeing joint venture in China just announced they plan on building their own non-joint venture commercial planes within 10 years, competing directly with Boeing. What is the reduction of future value to Boeing, especially since the Chinese government will probably encourage domestic airlines to purchase those new planes?
– quality. Wow, I can’t believe you actually said that. Tell that to any number of companies in the U.S., including the ones at numerous Toyota plants. Do you know that GM’s quality is now very close to Toyota’s (although their designs and cost of production still suck…)? Unions are usually a product of poor management, and there are numerous examples of unions working with management to create top notch product. This blog has mentioned several of them… search on Joseph Abboud for one.
I suggest you read this blog more often!
Rebecca Vanderbilt says
Not sure I will continue to read if the blog does not pertain to aviation.
I do not think you understand the total lifecycle cost of development. You are looking at all the wrong places on your argument against outsourcing. Nowadays, it’s just not practical to build everything yourself. Having thousands of non-accountable union people building aircraft “parts” is extremely expensive. Furthermore, those labor cost will only increase over time making Boeing uncompetitive.
The fact of the matter is, 787 is estimated to cost Boeing approximately $16-18 billion in pure development cost if Boeing were to do it on its own. But with the many large partners around the world sharing the cost, Boeing does not have to foot the bill while getting all the financial benefits.
You have not demonstrated here why the Dreamlifters along with the new tooling are more expensive than the current model shown by Boeing. It’s all here say from you. You need to compare the cost of Dreamlifters vs. the conventional methods.
GM, Ford, and Chrysler’s vehicles still suffer from serious quality issues. If you are referring to JD Powers’ quality survey, you would know that survey is flawed. It does not distinguish the severity of vehicle problems.
walt says
Boeing very well understands ‘lean’ and has a decade of intense tranfer of knowledge of the TPS via in country Japan study missions, lean conversion coaching by Shingijutsu sensis like Mr Nakao – instead of pot shots why don’t you look for the positive in the way we are transforming the commercial airplane airfame business? it seems our tough minded CFO centered customers like what they see
( unprecendented backlog of orders for ALL our commerical aircraft ; investors see value in our performance ( highest stock price in history of company ); and we have a solid base of lean learning ( 737 and 777 pulse/moving lines ) – we aren’t worried about no skin in the game nay sayers – our intent is learn-do/ find a way – we’ll let market demand and the quality of our products decide who knows what about how to adapt lean (TPS) to aerospace…
Stacy says
Walt- your statement sounds remarkably similar to what GM and Ford were saying in the early ’80s… stock price high, world leader, record production. I’d tack on that they thought their new Asian competitors had too high a hurdle to become world class.
Well we know what happened. That’s why your comment on this particular point in time is rather irrelevant, if not outright dangerous. Remember how fast Boeing’s fortunes turned from good to bad to now good again? They’ve transferred a tremendous amount of core technology to foreign “partners”, including in China. One of those “partners” has now decided to begin building full airliners for the Chinese domestic market. The confidence hurdle to sell internationally is huge… or is it?
I wish Boeing all the best, I really do. As a shareholder I’m also very happy with their current success. But leadership is about looking 20-30 years from now, and I think they will have a problem if they continue down their current course.
Stacy
Bill M says
Very well said Stacy. History can provide powerful lessons but you sometimes have to take off the blinders of current success to see them.
walt says
re replies – Boeing is a company with a VERY long view – our 2016 vision was created in 1995 ( 20 plus year span ) – and has served us via 3 key stategies ( one of which is to be a operate a lean and efficent production system ) – without ‘adjustment’ across three CEO’s, major market down and upturns and the emergence of many new competitors ( some of whom we are or have been in partnership with ) – no organization can either fully predict or ‘control’ the future – what Boeing is doing is positioning our current and future business mix to meet customer needs and strive for global aerospace leadership ( whatever market swings, technology breakthroughs, ‘new’ global competitive threats, etc,etc, etc ) –
– our vision is to keep inventing and reinventing ourselves and our products and services to make sure the markets we serve (now and emergent ) see us as the value leader for those products and services –
– we are much more likely to respect GE than American auto companies as our long view benchmarks
George says
Good site! I’ll stay reading! Keep improving!
Bettieclaire says
The Boeing joint venture in China just announced they plan on building their own non-joint venture commercial planes within 10 years, competing directly with Boeing.
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