787. Oh When Will It Get Better?

There is no need to pour more fuel on the Boeing 787 woes. it has a lot of them. The frequency and the amount of rework is beginning to pile up. I think on an early post I opined that Boeing will probably have to throw away a few samples. At the moment there are 20 aircraft in some stage of final or completion. This is in addition to the 6 test articles.

The 6 test articles in my view will never see conventional revenue service. Of the other 20 there is so much to do that Boeing has halted the flow new production elements from its vast and now very complicated supply chain. In the end this is the perfect storm of bad design, poor quality and bad supply chain management. Fixing the issues are not as easy when you have an integrated complex set of services coming to an aircraft manufacturer who has only done this on a limited scale before.

Current Estimates of the rework items from the Seattle Times are just under 150,000.

I suggest you read the article to get a sense of the depth of the issues. It is pretty much across the board.

If we run some math on it - let's say that on average each rework takes a day. That would require about 9 years and 3 months of one person working full out @2000 hours a year. But the tasks are both likely to be longer to fix and the skills are in short supply in some of the critical areas. So again - humour my weird maths, lets say there are 500 guys who can work on this effort and they have about 25 hours a week to focus on this. That represents a 12 week, 3 month effort to get these poor puppies out the door. In my view therefore based on the current known issues Boeing is looking at a 6 month delay to right the issues - addressing the fixes so that new and corrected production quality items start arriving at the 787 line in Everett. Couple that with another attempt at a rolling start to production and that means we are looking for few if any deliveries in 2011.

Remember how last year we were hoping that Boeing would get a symbolic single copy delivered to ANA.

Boeing just needs to take the time and get it right. The curve just moves to the left.

Farewell 787-3 I hardly Knew You And Also..

Boeing has finally agreed to shut the door on the short range 350 Pax 787-3 aircraft specially designed as a Japan only aircraft for JAl and ANA. ANA formally changed its orders to the longer range 787-8 yesterday.

This also frees up some resources and may indeed spell the end of another Boeing Model - the 777.

With the A350-1000 making inroads the formerly Seattle based manufacturer now has to decide whether to develop the 777 eating 787-10 or stick with two competing products. My guess at this stage is that the 777 lifecycle just got one heck of a lot shorter. Boeing cannot afford to run 4 product lines. It should rationalize on 3 really 2 mass produced lines Narrow body 737 and 787 and a boutique product the 747.

With Boeing now almost certainly going to do another model refresh to the 737 (geared fan) rather than the brand new build aircraft predicted the overlap between the 777 and the larger 787s is too great. And which way will Boeing go, a larger 737 or a smaller 787 to plug a gap or two?

Interesting question. In the mean time Airbus has a more flexible product line with the A318 to A321 and more growth possible out of the 321.

I do believe that we will see both players rationalize around 2+1 models with the Jumbos being boutique hand built products and just 2 lines - widebody and narrow body.

But watch out below... here come the new planes from Bombardier and Embraer not to mention China and Japan.

Cheers

787 #2 flies

 

 

767: I'm Not Dead Yet!

While the 787 has been stealing a lot of the limelight (and not all of it complementary) the 767 the plane that the Dreamliner was supposed to replace had garnered only 2 orders and 5 cancellations for a net of -3 orders on the year. But today ANA (the launch customer for the 787) redressed the insult and put the 767 back into positive territory. (Unlike the other Seattle Team - the Seahawks who had a disgraceful showing yesterday).

With the certification process now underway for the 787 and a target of nearly 9 months to obtain approval - the Chicago based plane maker needs to keep things positive. The 787 after one of the most aggressive sales programs in history and a very healthy order book actually experienced a net loss of 70 orders this year. Airbus correspondingly gained 22 orders for the year for its A350 family.

I suspect we may see a resurgence in orders for the 767 as a stopgap to replace existing short falls of 787. But the likely continued winner will be the A330. The Airbus wide twins (OK and the smattering of 240s) have a backlog of nearly 900 aircraft.

And with an acknowledgement to Mr Idle and Company for the image and quote.

Cheers

787 Power on - FINALLY

So Boeing managed to turn on the lights. Finally one built (and rebuilt and rebuilt...) 787 actually works with electricity. I wonder if they can turn it off ;-)

This is very good news for Boeing if for no other reason than it is a great morale booster.

There are challenges ahead. The most significant is that all the customers are being told to plan for significant delivery delays. In the case of a small airline - though an early buyer - the date for delivery for Monarch is now 2013. Ouch!

The gap between the projected deliveries and the full on production is a gaping hole. There is a significant capacity gap in the 767/330/787 sector, new builds are scarce and Boeing is being tight-lipped about any 767 production rate ramp up. With the Tanker decision again about 12 months away, Boeing is going to be in no hurry to add capacity to this sector. As Airbus has seen with the recent inability to reach Wave 2 for the A380 - this logistics thing is not easy.

What can be learned from this? Lots of things. Now I guess we all understand why Microsoft is/was always late with its versions of Windows.

Cheers

Timothy

Another 6 Months for 787 possibly longer

Bowing to pressure and reality - Boeing will tomorrow (Wednesday) announce a further delay to the 787 program. The Seattle newspapers are predicting a further 6 months. Unfortunately we think it will be longer.

Boeing's problems with the plane should not detract from the final product but there will continue to be issues during the early build run. Boeing is going to be under a lot of pressure to open up the key milestones to public scrutiny for the 787 program.

Specifically the following issues will be with the program:

1. Fully automated production services will not be effective until long into the first year of production.
2. There will be a slower ramp up of the production line than was anticipated. This BTW is very wise.
3. Boeing will be bringing more and more of the integration services in-house
4. Fabrication issues remain with key parts of the plane. The most noticeable issue is the wingbox strengthening
5. Weight will be a problem restricting range for ultra long haul traffic.
6. 787-3 will be pushed to the background while more -8 and -9s are added. This means a major headache for ANA. The Japanese airline may indeed start looking at Airbus products to replace its aging 767 fleet. It is the leading contender for the A380 in Japan.
7. Design freeze for the -10 model will be pushed back until the existing major version -8 and -9 are stable.

The cost to Boeing will be significant in penalties and delayed revenue. However in the longer term this should not be an overall issue when considered in the overall scheme of things. For short traders they can make money out of Boeing's near term misfortunes.

As a frame of reference the A380 took an 18 month delay. So far (assuming the 787 is delayed 6 months) and I think my calculations are correct - it will be 14 months in total. If I am right and the delay goes a little longer then we will have a similar situation of overall late delivery for both the Airbus and Boeing flagship programs.

There is a lesson here. The 777 was an aberration rather than the pattern for production and delivery timings. Bear that in mind Airbus and Boeing next time you set dates.

Cheers

Timothy

787 Program still not out of the woods - Bair points a finger

The outgoing, recently ousted, Boeing 787 Dreamliner program manager Mike Bair has publically pointed the finger at the much vaunted Global Supply Chain system for delay problems with the new wonder plane. At this week's scheduled quarterly meeting of the Snohomish County EDC, Bair kept a pre-arranged date to give a breakfast address in Everett. He didn't hold any punches.

Much like then head of Boeing Commercial, Alan Mullay's famous comment on Washington State' competitiveness in 2003 (Quote "We suck"), Bair pointed the finger at key players in the supply chain. Afterward, Bair declined specifically to name the suppliers Boeing "won't use again." He said he was referring not just to the six first-tier airframe partners — Alenia of Italy; Mitsubishi, Fuji and Kawasaki of Japan; Spirit of Wichita (spun out from Boeing), Kansas.; Vought of Texas — but also to some of their suppliers in the second tier.

Bair made his comments pointedly at the key global supply chain partners and of course Boeing's own management of it: "That whole production system is built for 1,200 pieces. ... Everything about it was designed for 1,200 parts," he said. "We threw 30,000 at it, " indicating the Chicago based company's misunderstanding of the complexity of the processes.

It has been well understood by industry insiders that Boeing's management process was built around a system of delegation and responsibility of the individual supply chain partners. IE that the partners had to be totally responsible for design, fit and functionality of each of their chunks of the process. Boeing would then have hit teams who would act as fire fighters flying to supply chain hiccoughs and fixing the problems. The idea looks great in the boardroom and on a white board. Not so easy in practice as Airbus has learned throughout the years.

So who are the guilty parties? While we have no definitive information, we can speculate through process of elimination. Sources inside Boeing have indicated that there has been a lot of activity of Boeing engineers making European trips. With the Japanese partners being well show cased by Boeing we can only imagine that there has been less than satisfactory performance from other of the vendors.

So what is the impact on the 787 program and Boeing for the future?

Immediately we anticipate that Boeing managers will be taking a hands on role in resolving some of the issues at the problem partner/suppliers. At this stage they cannot bring the production facility back in house because there is no "in-house" facility to bring it to. With Spirit (Formerly Boeing Wichita) a separate company - there are no production capabilities that could be added without long lead time and factory facilities being created. As for a reason, " ...some of them proved incapable of doing it," Bair said. In the interview after his speech, he expressed frustration that some partners seemed "unwilling, for whatever reason." "They just didn't do what we thought they could do," Bair said. "Who knows why?"

For the long term future his will impact the 737 Replacement narrow body designed for launch and in-service by approximately 2015. Some news reporters regarded this as a boost for the Puget Sound (Seattle) region. Not so fast. For a 2015 date, selection of the manufacturing site would likely be made at least five years earlier. At one point, explaining the reason for the 787's global supply chain, Bair said it was difficult to ask the Japanese to invest money and then build their sections somewhere else than Japan.

So is the supersite concept that he outlined — supplier factories located alongside final assembly — really practical? "I don't think it's outside the realm of what may have to be done," Bair said in the interview afterward. "Toyota builds as many cars here in the U.S. as in Japan." A supersite approach would make the next aircraft assembly operation a bigger prize than the 787 plant, which has not attracted many supplier jobs to Washington. Boeing has spent millions in hiring in ex-Toyota managers as well as sending engineers and managers to Japan to understand a car like production platform for its aircraft.

So we can expect for the next 2 years a lot of PR war of words flying around as Boeing is courted to build the next gen production facility for the 737FG (Future Generation) aircraft. One thing is for certain - it won’t be Renton. I will lay bets on that one. There just isn’t enough space at the current production line for that. Since the sale of land nearby for a shopping mall and office development; only if Paccar (ironically builders of Mack and Peterbilt brand trucks) could be persuaded to move would there be anything like the room for such a supersite. Highly unlikely when there are so many other competing and suitable sites. Plus with many states itching to land the supersite - we can be assured that Texas, Alabama and California would be in the running.

"The right way to do this would be to have all those big parts across the street so you could just roll them in," Bair told his audience. "We'll see on the next airplane programs whether we can accomplish something like that." And who says it has to be in the USA?

Boeing - Delay on 787 - More indepth analysis

So the smoke has cleared and as we predicted as far back as May (well spotted Addison) Boeing did not make its overly ambitious schedule for the 787. Lets dive a little into the Boeing situation.

The 777 program - much less complex and very little integration issues arrived exactly on time promised delivery with a suitable gestation period occurred to United on the day promised.

The 787 is several orders of magnitude more complex. For example 4x the lines of code in the software. Vendors from all over the world with not just components but major subassemblies (like Wings and Fuselage barrels etc etc).

An overly aggressive delivery schedule

Supply chain issues that range from raw materials to specific parts such as fasteners.

However perhaps the biggest challenge remains just learning how to run a business such as Boeing has set themselves up for. It is clear by the amount of "travel work" that there have been and will continue to be significant issues in the integration of this just in time production capability. Boeing is probably guilty of believing it’s on Bullshit. The 787 is not the Smart Car type production they thought it was. No manner of Toyota engineers is going to make an inherently complex process any easier.

So from our vantage point, the following issues remain with the aircraft:

1. The learning curve is steeper than the Company ever imagined.
2. The amount of time for learning while now extended is still not going to be enough.
3. The amount of "travel work" indicates it requires an overhaul of the assumptions that were created in the design of the production schedule - particularly where the Italians are concerned. Building the schedule on the basis of the relationship to Spirit was somewhat optimistic.
4. Single sourcing has long term ramifications that need to be revisited. Boeing needs to consider how to ensure long term supply of its critical finished and raw supply chain. In this case they cannot blame the procurement process of the Government (a la C17) as a root cause.
5. Raw materials access beyond the direct provision of the supply chain interface is a cause for concern. The significant rise in the price of raw materials (whether plastics for the composite sections or Titanium) is going to cost Boeing dearly in future years.

We believe that the early customers such as ANA, JAL and Qantas are going to see significant in service issues particularly at some airports where Ramp Rash is well known. Those and other 787 customers would be well advised to learn from Boeing's issues in doing a gentler ramp up of the new aircraft. It should be remembered that it has been a long time since we saw a generational change in aircraft introduction.

And finally - let’s not forget Airbus. They better learn also. AND given the long term contract lock down of certain components that Boeing has already made - they better get their supply chain right for the A350XWB.

Is Boeing pushing too hard on the 787? Words of warning

http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html

I live in Seattle and am a huge fan of the hometown manufacturer. They have scored what seems to be a Grandslam with the new 787. But a word of caution seems to be creeping in. At the Boeing Future of Flight Center, there is a section of the 787 not too far away from a cross section from a 747-100. What a difference. One is immediately struck by the composite frame’s thin skin vs the conventional metal skin. It did somewhat un-nerve me to look at it. http://www.boeing.com/companyoffices/aboutus/tours/

But it seems that there are some out there that also feel that something may not be right with the design of the new fuselage. http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html

In this article a former Boeing engineer has drawn industry fire over 787 composite fuselage crashworthiness alarm.

While I don’t want to be an alarmist – it does somewhat worry me. With a backdrop of the fastener problem and the first flight being pushed back from the original Late August time frame into possibly as late as December, i am now worried that Boeing may be just rushing into things. A cautionary tale to be sure.

Am i right? I am not sure I want to be on the plane to find out if I am.

Brace yourselves - 787 delay story coming

Boeing is playing down rumours (now fact in our opinion) that the 787 program is running behind schedule.

With May delivery dates looking increasingly shaky, the Boeing spin machine is in full force. On Wednesday the scheduled 787 quarterly briefing should be an interesting affair.

While we doubt we shall see 787s parked in Everett with concrete blocks instead of engines (like the 747 early stage program) there is a now a clear likelihood that the first customers will not be getting their full complement of planes on time.

The culprit(s) the process of reinstalling fasteners for the prototype and yes our old friend software integration are probably the candidates for the delay. We personally believe that the 787 will fly in 2007 Q4 with deliveries coming in before the start of the second half of 2008. Even so that is a very aggressive schedule.

Boeing is not infallible and this goes on to just show that launching a new aircraft is no trivial exercise. Airbus is probably not going to be able to take advantage of this situation. But at least they can take some comfort that they are not the only player to suffer. (No comments please on Embraer's recent melt down of its supply chain).

Coming up - likely that Boeing will shortly formally announce the 787-10 to compete with the higher end A350XWB. Boeing is not shy in letting the new aircraft cannibalize the market for the older model 777-200s.

Stay tuned people. Spin at its finest coming your way.