September 5, 2001
Boeing Rethinks How It Builds Planes With Help From Its 'Moonshine Shop'
By J. Lynn Lunsford
Staff Reporter of The Wall Street Journal
RENTON, Wash. -- Not far from the steady blatt-blatt of the rivet guns on its 757 assembly line just outside Seattle sits what Boeing Co. calls its moonshine shop: The people here distill work-saving ideas into contraptions that make it easier to build jets.
Consider the hay loader next to an almost-completed 757. Normally, this cross between a ladder and a metal-spiked conveyor belt would be dumping bales of hay onto waiting trucks. But to veteran mechanic Robert Harms, the hay loader is the perfect way to get bulky passenger seats from the factory floor up 13 feet to the door of a plane without having to use an overhead crane. "It might look funny, but when you see it work, you wonder why we didn't do it this way all along," he says.
Moonshine shops -- so named because they work outside traditional channels and use whatever materials are available -- are the essence of Boeing Chairman Phil Condit's campaign to boost profits by driving out costly manufacturing techniques and the decades-old thinking behind them. From using materials developed for military aircraft to putting its big planes onto moving assembly lines for the first time, Boeing is retooling itself to confront tougher times.
Boeing's struggle to streamline the making of one of the biggest and most complicated industrial products mirrors what's happening on factory floors across the country, as manufacturers confront the economic slowdown. The difference for Boeing is that it's trying to accomplish this while still cranking out planes, not in the downtime between models.
Boeing executives are counting on this revamp to enable the company's commercial-airplane division to continue posting double-digit profit margins despite the slowing world economy and sharp decline in aircraft orders from the major airlines. At the same time, Europe's Airbus is increasingly becoming a formidable competitor. At the end of July, Airbus had a backlog of 1,602 orders, compared with 1,451 for Boeing, according to the companies.
Both giants are developing major new models, but they are based on different views of where the market is heading. Airbus believes that increasing congestion at airports will give its planned 555-seat A380 the edge with customers. Boeing's big bet for winning back market share is a radical new airliner called the Sonic Cruiser that would carry around 230 passengers at just below the speed of sound. But the Cruiser will never fly unless Boeing can cut the fast plane's fuel guzzling by making it cheaper, lighter and aerodynamically superior to current aircraft.
The Writing on the Wall
For Mr. Condit the writing is on the wall. "It is hard to make big changes when you are the leader," he says, " ... until somebody starts eating your lunch."
Boeing has been gradually adopting "lean" manufacturing techniques since the early 1990s -- a decade after the U.S. auto industry began emulating the Japanese approach. The basic philosophy: Everything from the design of a component to the machine used to build it is examined with the goal of making it as easy as possible for workers to boost output using less space and fewer movements.
Since late 1998, when the company began applying lean activities on its newest model, the 777, the time it takes to assemble the major components into a finished aircraft has dropped to 37 days from 71. And just since April, the company has trimmed two days out of what was a 20-day final assembly of its best-selling plane, the 737.
The impact of these moves can be seen in the operating margins of the commercial-airplane division, Boeing's largest and the source of 61% of its 2000 revenue of $51.32 billion. In 1998, the unit's profit margin was 1%. For the first six months of this year, margins hit 10.2%, despite falling revenues. Although some of the gain comes from Boeing's increasing unwillingness to get into price wars with Airbus, executives also say lean manufacturing has made a big impact. Says Mr. Condit: "You can see some very dramatic shifts."
Seattle-area workers got their strongest taste yet of where Boeing is going in April. That's when the company began converting one of its three 737 assembly lines in Renton to a moving line from the traditional bays in which planes are parked among fixed catwalks and other machinery for days at a time. Now, once the wings and landing gear are attached, each plane is dragged by a giant tug toward the door at two inches a minute for two shifts a day. The goal is to shove an aircraft out the door in about five days, down from the 11 days it now takes.
The workers move with the airplane on a float-like contraption. Rather than having mechanics waste time walking back and forth to retrieve tools or parts, specific items for each job are wheeled to waiting spots along the line.
"The moving line adds a sense of urgency because you can look at the airplane and tell when the work is even just a few minutes behind schedule," says Carolyn Corvi, 737 program manager. At several places along the line, devices resembling emergency call boxes with traffic lights on top have been set up so that workers can alert support departments to problems that might slow or stop the line. In one engineering group, the flashing light is accompanied by a recording of Aretha Franklin's "Rescue Me" to bring help running.
Hundreds of Millions on the Floor
It's all about reducing the expensive inventory that once sat around for weeks. Up until a year ago, it was common to see shipping containers loaded with everything from seats to $15 million engines stacked in every corner of Boeing's factories. For Boeing, that translated into hundreds of millions of dollars a year that was sitting idle on the floor.
Today, the engines are delivered when they are needed. Overall inventories have been reduced by 42%, and small "feeder" lines are assembling components that once were brought to the airplanes in hundreds of separate pieces.
Over the next three to four years, Boeing says it may use some form of moving assembly line to help speed up production on all of its jet models, including the dowager of its fleet, the 747 jumbo jet. In June, workers painted a white stripe down the center of the 747 assembly bay in Everett, Wash., highlighting the path that the moving line would follow. Then in July, the 747 nearest the factory exit was aligned with the stripe, and crews began experimenting with new techniques for getting parts and people up to the towering aircraft. They are now finishing their second 747 in this position, creatively employing everything from food catering trucks to giant lifts in a bid to make the process more efficient.
Already on edge since the company announced that it would be moving its headquarters to Chicago from Seattle this month, rank-and-file workers were at first reluctant to accept the changes in the Renton plant, venting some of their frustration at the moonshine workers. The union has filed several grievances against work turned out by the moonshine shops, alleging that the freewheeling nature of the shops' operations has resulted in the failure to use union electricians and toolmakers to do specialized work. The company says it is working to resolve the union's complaints, but it contends that the ability of the hand-picked moonshine teams to move quickly is paramount.
Mr. Harms, the 52-year-old mechanic who led the effort to modify the hay loader to move seats, recalls the day when he arrived for work and found a note attached to his contraption. It read: "Idiots running amok."
"That sign kind of serves as our inspiration because once it started running, that loader has made believers out of people," he says.
Gordy Laborde, a 48-year-old mechanic who has been installing interiors in Boeing 757s for 13 years, counts himself among the converted. "I looked at that hay loader from every angle and I could not see how it was going to work. You do something for so many years one way, and something like this really takes you out of your comfort zone."
To some degree, the workers' unease can be attributed to the fact that the moonshiners' contraptions aren't as beefy as those fabricated by the official Boeing tooling shops. Many of the prototypes are cobbled together with components and hardware that was cast aside as useless junk. The hay loader is powered by a heavy black 1920s-vintage electric motor that once ran an air-compressor belonging to team member Kim Cherban's grandfather.
Moonshine team member Rick Trujillo came up with a highly maneuverable 100-pound pneumatic machine the size of a go-cart that slides behind the nose wheels and uses high-torque motors to push a 75-ton 757. He named the machine Garf, after his dog. When the team first tested Garf in March, skeptics were lined up along the mezzanine level above the factory floor, waiting for it to fail.
"I pulled the trigger and the motors started running and the plane just sat there, not going anywhere," says Mr. Trujillo, an engineer. "I about had a heart attack until somebody noticed that we still had chocks blocking the main landing gear." Today, Boeing believes that the machine is promising enough that it is seeking a patent for possible uses throughout the aviation industry, where heavy planes are typically moved with 20,000-pound tugs.
Before moving to the moonshine team, mechanic Mike Garcia spent years loading kitchen, or galley, assemblies into the back of 737s, a job widely considered to be one of the worst assignments on the floor. The 500-pound units come from the manufacturer fully assembled to cut down on shipping costs and damage, even though they must be split in two pieces to fit through the rear door of a 737.
To unbolt the contraption, wrestle it through the door and assemble it again takes an experienced crew two days. Recently Mr. Garcia and other team members proposed redesigning the galley assemblies so that they would split into three pieces, a process that could make them easier to ship and assemble. To prove their point, they built a mock galley of cardboard boxes exactly the size of a real one. They then invited in representatives from the manufacturer, Driessen Aircraft Interior Systems of Garden Grove, Calif., to watch the moonshine team load it into a real plane and "install" it in about half the normal time. "We showed there was probably a better way to do it," he says. "Now it's up to the engineers to work out the details."
Boeing executives acknowledge that many of the improvements so far have been the result of picking low-hanging fruit -- changing practices that were obviously wasteful but had endured because of longstanding habits and bureaucratic resistance.
In many cases, the design of the airplanes dictates much of the inefficiency in production. For example, on all of Boeing's planes, smaller workers are trained to crawl into confined spaces, such as fuel tanks, to attach wires and paint sealant. In other parts of the factory, workers can spend their entire careers sandwiched inside a labyrinth of jigs holding parts together while they repeatedly drill and set rivets. For Boeing, the Holy Grail is replacing these traditional, labor-intensive production methods with new, cutting-edge materials.
Across the country at the Boeing Phantom Works research facility in St. Louis, scientists and engineers are experimenting with some of the latest composites and metallurgy. One aim is to take subassemblies such as the dome-like rear pressure-bulkhead, which keeps the plane pressurized, and reduce it to a single part, eliminating hundreds of components and thousands of rivets.
"The whole concept is to look for quantum leaps in efficiency, to the tune of 50%," says David Swain, president of the Phantom Works division. "We are looking for whole new ways to build airplanes."
Through its development work on the proposed Joint Strike Fighter and the latest version of the F-18 fighter plane, Boeing says it has made big jumps in the use of carbon fiber composites for use throughout the aircraft. Engineers are experimenting with new resins and ways of layering the cloth-like carbon composite fibers that might someday make building with aluminum and rivets obsolete. Such construction is already common in the boat industry, where large boat hulls are routinely built as single pieces.
Ultimately, Boeing's big test will be whether it can incorporate all it has learned from its dozen or so moonshine teams, lean-thinking and new technologies into a single platform: the proposed Sonic Cruiser.
Preliminary drawings and models of the delta-winged machine unveiled in March have triggered intense industry debate over whether Boeing can actually pull it off by the 2006 to 2008 target it has set. Potential airline customers have made it clear that they will be interested in the high-speed airplane only if it can be built and operated cheaply enough to make it competitive against existing aircraft.
"If we don't build the Sonic Cruiser better than we do today, we won't build the Sonic Cruiser, period," says Mr. Swain.
Write to J. Lynn Lunsford at [email protected]