BOEING 767

From Concept to Production

 In Boeing Timely delivery is the utmost priority

Introduction The commercial airplane division consist of the 717, 737, 747, 757,
767 and 777 families of jetliners and the Boeing business jet. Building
family of planes by developing on same platform

Availability of more varians and options including standard, long

range, freighter, flexible design with inherent growth potential

Common family of plane produced on a common assembly line result

in ealier reaching of breakeven point

Expertise in global marketing, technological leadership, customer

suppor and production skills

Having centralised coupled with manufacturing systems and tools for

project management
Company History
• Founded in 1916 by William A Boeing in Seattle
• 1920’s – 30’s market expansion
• Manufactured entire planes
• 1955 families of planes
• Late 1970’s early 1980’s risk-sharing
• 1973 new airplane study 7x7
Background (1/3)
• In 1969 a New Airplane Program
(NAP) study group was formed
• Motive was to learn good things
from prior programs & not to repeat
mistakes done in past
• 7X7 (later named as 767) was
finalized to expand Boeing's Market
growth and to be next aircraft for
next 20-30 years
• New aircraft would be :
• Superior to other planes in market
• Incorporated with latest technologies
• Fuel efficient, could carry 200-300
passengers
• Fitted with 2 person cockpit
• Built with new Wings and Tail
configuration
• Used composite materials
• Able to cater longer range flights
Background (2/3) Agnes Grace
The 767 Program and Program Definition:
The New Airplane Program (NAP) was assembled to study the issues faced with previous major programs – 707, 727, 737 and 747 so
that the problems do not get repeated in the future. The project, called “Project Homework”, came out with a long list of lessons
learned and ideas for development of the next generation plane. The first stage of the development program, called “Program
Definition” looked out for market opportunities, configurations, forecasting future needs of the buyers etc. IT also dealt with issues
regarding tradeoff between fuel efficiency and range, engine type and from whom to buy etc. It also dealt with the technology to be
used and other features which would lead to the overall improvement for the company. Constant reviews of all the significant
elements were done by the Audit Teams, which comprised of experienced managers.

Cost Definition:
After the program definition, the flight was named 767 and the cost definition phase began. This shift indicated an increase in the
commitment level. Cost estimation was done using the parametric estimate technique. This technique estimated the cost of the plane
from its design characteristics such as weight, speed, length etc. These were, however, were carefully fine-tuned to account for the
differences in the programs. Use of computer Aided Design (CAD) and computer Aided Manufacturing (CAM) helped the team to get
better predictions. Similar process was used to design the master phasing plan, which established the schedule and important
milestones of the program.

Supplier Management:
1300 vendors supplied the 3.1 million parts that were used to manufacture the 767. Two program partners and four major
subcontractors were the most important as they built the body, tail sections and landing gear, the most important parts of the airplane.
The program partners were Aeritalia and Japan Aircraft Development Company (JADC) which was a consortium of Mitsubishi, Kawasaki
and Fuji Industries. Aeritalia would produce the wing control surface and tail while JADC would produce the body section. The
participants of both the companies were asked to work together with Boeing engineers, ensuring the work to be done properly.
Background (3/3) Agnes Grace
Production Management:
All the 767s were assembled in Everett, Washington, in the same facility used for assembling the 747s.
Half of the building was devoted for assembling major subsections and the other half for final assembly.
Line flow process was used in the final assembly stages with seven work stations. The critical tasks faced
by the management were: maintaining schedule and ensuring that the learning curve goals are met.

Scheduling and Change Control:

Requests for changes came from internal as well as external sources. Interior settings were negotiated by
the customers while technical changes were proposed by the engineers. All major changes had to be filed
before freezing the basic design. Any changes had to be approved by the Production change board,
chaired by the operation department. Implementation plan was developed only after the approval of the
changes. Three general approaches were used:
1. Incorporating changes into normal flow of production.
2. Installing old parts as per the original plan and then refitting the new parts offline.
3. Expediting changes by assigning additional workers – process called as “blue streak”.

Maintaining the schedule was the most critical task. To ensure this, Boeing employed Management
Visibility System and marathon status meetings took place to discuss the status of the program and
the potential problems faced by the various representatives.
 PROBLEM STATEMENT (AGNES GRACE)
Items Contents
Problems What 1. Boeing had lobbied the FAA for permission to build wide bodied aircraft with two cockpits
2. 767 had originally been designed with three person cockpits
3. Boeing 767 had to be converted to models with two-person cockpits
4. 30 of the 767s were already in various stages of production

Why To build wide-bodied aircraft with two-person cockpits, rather than three-person cockpits

How 1. Making the 30 planes with three-person cockpits as initially planned and then rebuilding them with
two-person cockpits
2. Inserting two-person cockpits into those planes, keeping the flow of production

Opportunities 1. Compared to competitor, Boeing is easily able to lead medium-range market through making two-
person cockpit
 Monopolizing a market during a few years
1. Boeing can be able to achieve another learning curve related to building two-person cockpit
 Saving many labor costs

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9 THE ALTERNATIVES (AGNES
GRACE)

Alternatives 1 Alternative 2

• Made off-line • Made in-line

• Building the 30 planes with three person • Inserting new cockpit into the 30 planes
cockpits as originally planned. without removing them from the flow of
• Then retrofitting with two person cockpits production
in separate rework area
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ALTERNATIVE 1 (AGNES GRACE)

Adventages : Disadventages :

•Neither learning curves nor schedules • Loss of configuration can cause

would be disrupted
•Airplane system would be
functionally tested and problem
would be identified and corrected on
the spot
operating system disruption
• Space problems for parking and
fire regulations
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ALTERNATIVE 2 (AGNES GRACE)
Adventages :
All parts would be installed only once
All activities would be controlled by normal
management procedures
Disadvantages :
• Original production plan would be
disrupted and learning curves woud be
disrupted as well
• Functional testing would have to be done
after full installation
• Problem might not be detected and
corrected immediately and might well be
hidden by systems
 Problem Statement

Should the building of 30 planes Should the changes be made in

Thorton knew that the planes
had to be converted to models
with two person cockpits. But
what was the best way to
proceed?
be done as originally planned & line inserting new cockpits into
then retrofitting them with two 30 planes without removing
person cockpit in a separate from flow of production?
rework area?

Two viable options were:

Before 11 months of first scheduled
In August 1981, Federal Aviation Make changes in-line without removing planes
delivery of 767 aircraft Boeing had to take
Administration rendered 2 person from original flow of production or Make
a decision for changing cockpits from 3
cockpit as safe as 3 person cockpit changes off-line, by retrofitting 2 person
person to 2 person for 30 planes which
for wide bodied aircraft cockpits in separate area once original
were in advanced stage of production
production was completed
Analytic Hierarchy Process
• Comparison Matrix for Parameters
Performance Parameters
for Best Alternative Delivery Time Learning Curve Hidden Risk Technical Difficulties Labor Hours
Assessment

Delivery Time 1 2 3 4 5
Learning Curve 0.5 1 2 4 5
Hidden risk 0.33 0.5 1 3 2
Technical difficulties 0.25 0.25 0.33 1 3
Labor Hours 0.2 0.2 0.5 0.33 1
Analytic Hierarchy Process
• Geometric Mean, Weightage & Eigen Value
Geometric Mean Weightage Eigen value
Delivery Time 2.6051 0.409169 5.460602
Learning Curve 1.8205 0.285936 5.307808
Hidden risk 0.9999 0.157049 5.388546
Technical difficulties 0.5743 0.090202 4.891815
Labor Hours 0.367 0.057643 5.210682

• Calculating Consistency Ration

Power of matrix n 6
Mean Eigen value 5.251890737
Consistency index CI 0.06297
Random index RI for n 1.2479
Consistency ratio CR 0.056226
Analytic Hierarchy Process
• Final weights & Ranking
Alternative 1 Alternative 2

Delivery Time 4 3.5

Learning Curve 3.8 3
Hidden risk 3.6 3.2
Technical difficulties 3.8 3.4
Labor Hours 4 2
Final Weights 3.8619 3.2144
Ranking 1 2

We choose Alternative 1 as the Final Solution to this as per AHP.

 Reasoning for Assigned Priorities in AHP

Delivery Time Learning Curves Hidden Risk Labor Hours

• Delivery time is • Disruption • Higher and • Least value is

important cause huge loss unidentifiable desirable from
• Penalty for late both time and risk is not Cost and time
delivery time labor acceptable frame

• Identification
and correction
of Risk most
Important
 Process Flow

Generation of
Calculation of
Purchase Design Retrofitting Of Final
Labor Hours Delivering for
Orders of Modification Two Person Functional
required for Flight Test
Electronics Programs Cock-Pit Testing
Retrofitting
equipment
 Parametric Estimates For Retrofitting
• Labour hours required for Completion of retrofitting- 10,00,000
• Permissible Delay Period – 1 month
• No. of Shifts – 3 Shifts
• Orders & Purchase of Newly required Electronic Equipments –
Assume 3 days
• Time for establishing new Workstation for Retrofitting – Assume 5
days
Learning Curve For Retrofitting
Learning curves were developed for each work center based on
historical experience. Optimum crew size was defined for the
operation at the beginning based on available work space,
tooling to be employed etc. The learning curve indicated the
decrease in the number of days required to produce another
unit of the 767 after the first, since the learning had taken place
and hence, time taken should be reduced. This was followed
and parametric estimates indicated the same. Learning curves
were also applied to change management. The three tools used
to make sure the targets were met are:

1. Specific work-station goals

2. Stand-up meetings with first line supervisors
3. Management Visibility System
Agnes Grace
 Retrofitting
Arrangement of Parking Lots for Planes waiting for Retrofitting

Equip the Parking Lot with Safety Precautions

Removal of existing Three Cock Pit Crew

Modification & Repairing from Three Crew to Two Crew Cock Pit

Functional Testing of newly installed Two Crew Cock pit

Conclusion
From above analysis following points are favorable for choosing completion
of production & subsequent modification:
• Less number of Labor Hours are required
• Neither learning curves nor schedules would be disrupted
• Functional Analysis of flaps, ailerons, landing gears would be done while
final assembly
• No problems will be hidden by system
Mr Thornton should go with offline retrofitting with two person cockpit in
separate rework area
 RECOMMENDATION (AGNES GRACE)
There are several conclusion of this case :
• The second alternative might not detect and correct problems immediately, so we can
conclude that the first option is preferable than the second one
• If boeing complete scheduled production of the 30 planes with 3 crew cockpit as it will
ensure better control on one of only two possible airplane configuration rather than the
many configurations
• Boeing had plans for incorporating the plan for 2 person cockpit since inception of
design and it would be feasible to bring this change to existing configuration. The
learing curve is designed such that every subsequent aircraft takes lesser time and
changes in the production will hamper this. This also suggest taking the post production
change approach

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