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Boeing has been dealing with a bit of a problem this summer - where to park unfinished jet airplanes. Kinks in the supply chain of the company's popular 737 led the airline to park many of those planes without engines on a taxiway at the tiny Renton Municipal Airport outside of Seattle. NPR's David Schaper reports.
DAVID SCHAPER, BYLINE: Boeing's 737 is the most successful commercial airliner in history. Considered the workhorse of the industry, Boeing has delivered more than 10,000 of the single-aisle jets to airlines. The goal at its factory in Renton is to crank out 52 of these planes a month. That's almost three aircraft a day. But this summer, that pace slowed way down.
CONNIE KELLIHER: The problem came from suppliers who couldn't keep up with the increased rates.
SCHAPER: That's Connie Kelliher, a spokeswoman for the machinists' union in Seattle. She says it's a problem when certain parts don't get to the factory in time.
KELLIHER: Our people may be doing work that's out of sequence where it wouldn't normally be installed on the plane. It might be in a different location now that they're having to do the installation.
SCHAPER: Workers are putting in overtime, and the company called back retirees to help catch up. At one point, Boeing reportedly had at least 50 half-finished 737s scattered around the Renton plant and another 35 parked at the airport. That's close to 100 incomplete jets. At about $100 million each at list price, that's tying up nearly $10 billion for Boeing. At an investors' conference last week Boeing's CEO, Dennis Muilenburg, acknowledged the problems.
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DENNIS MUILENBURG: You see some pressure points in our supply chain as we've been ramping up.
SCHAPER: Muilenburg says Boeing increased its target production rate at the same time the company shifted gears from building mostly next-generation models to more fuel-efficient MAX versions of the plane.
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MUILENBURG: We've had to take some particular actions to beef up our supply chain, improve some of our processes and work through some recovery actions.
SCHAPER: Muilenburg reassured analysts that the fuselage manufacturer and the engine maker who were struggling to keep up are now back on track. The engine delays in particular were caused by one supplier of castings and forgings for turbine disks, a relatively tiny part of a big jet engine.
MIKE GOULDER: Who'd have thunk it?
SCHAPER: Mike Goulder is a supply chain consultant who also teaches management at John Carroll University outside of Cleveland.
GOULDER: This little, tiny thing that had this little, tiny problem then cascaded. The cascading was amplified by lean global supply chains and turned out to be this enormous problem.
SCHAPER: Goulder says the just-in-time supply chain does reduce costs and improve efficiencies by eliminating the need to stockpile goods and materials, but a little kink can create big bottlenecks. Nonetheless, he says it's a system worth fixing.
GOULDER: Just don't throw out the baby with the bathwater because the things that have evolved to operate in this fashion are safer, cheaper and better, and we don't want to give up on that.
SCHAPER: Boeing is just fortunate that Airbus, its chief competitor, is also experiencing supply chain hiccups at a time when demand for their planes remains strong. David Schaper, NPR News. Transcript provided by NPR, Copyright NPR.
