RISK WITHIN BOEING’S RAW MATERIAL STRATEGY
With growing demand for air travel, Boeing is increasing production rates to unprecedented levels. To support these increased rates, Boeing relies on suppliers to deliver millions of parts on time and at an acceptable quality in order to assemble its airplanes for on-time delivery. If one structural part is missing, the plane cannot be delivered to the final customer and placed into service. This makes assessing risk within the supply chain a critical part of Boeing’s strategy.
The Tauber Team first performed a risk analysis of aluminum and titanium mills in order to re-architect the risk assessment process. Since it was determined there was minimal risk with mill production, the team decided to broaden the scope of the project to identify other opportunities for improvement in the rest of the raw material strategy. The student team identified areas that contained costly risks to Boeing, including forecasting errors and distributor capacity constraints. In addition, the team discovered an area of opportunity for increased savings with titanium scrap recycling. By improving these select areas, Boeing can expect cost savings of millions of dollars per year.
Read the 2017 The Boeing Company-Supplier Team Project Executive Summary in the 2017 SPOTLIGHT! book.
William Chen–MBA & MSE Industrial and Operations Engineering
Tamara Craven–EGL (BSE & MSE Industrial and Operations Engineering)
Shannon Watt–Master of Business Administration
Andrew Burgess–Senior Manager-Supplier Performance for Aircraft Materials and Structures
Terry Finley–Director of Supplier Performance
Prakash Sathe–College of Engineering
Andrew Wu–Ross School of Business
About Tauber Team Projects:
The 2017 Tauber Team Projects resulted in $575 million in savings according to sponsoring company calculations, an average of $18.5 million per project over 3 years.