Boeing: Making Lean Manufacturing Fly

Lean Manufacturing is the systematic elimination of waste by focusing on production costs, product quality and delivery, and worker involvement where waste is defined as anything that doesn’t add value to the production and supply-chain process. In the 1950s, Taiichi Ohno, developer of the Toyota “just-in-time” Production System, created the modern intellectual and cultural framework for Lean Manufacturing and waste elimination. Largely, Lean Manufacturing represents a fundamental paradigm shift from traditional batch and queue mass production to production systems based on pull production.

Batch or queue manufacturing represents manufacturing large quantities of inventory with predicted customer needs. This is also called as the “push-system” of production. “Pull-system”, in contrast, is a manufacturing process where the inventory is manufactured based on customer demand. The demand from the customer is called as the pull. Under this process, the manufacturing process waits for the request from the customer or the pull from the customer and only then is the manufacturing process started. Pull processes depend on the reactions of the customer. On the other hand push processes are not actual demand.

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 verify 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.

Here’s a comparison of the status of Boeing before and after the implementation of the CBO system from the “Boeing frontiers”:

With the lean manufacturing process being so tremendously advantageous to the supply chain of the company while being environmentally sustainable, the question is when are other manufacturing giants going to consider this manufacturing process a necessity for their improvement?

Sources:       

•  http://www.boeing.com/news/frontiers/archive/2004/september/i_ids1.html
• http://www.boeing.com/news/frontiers/archive/2002/august/cover.html
• http://www.lean-manufacturing-inventory.com/pushvspull.aspx
• http://en.wikipedia.org/wiki/Toyota_Production_System