The Moving Average Of Production-Delivery: March 2014

The monthly moving average is a broader scope of production which takes into consideration both Boeing's production and the customers position for delivery. The customer often adds its own standard before delivery such as interiors, special electronics and other customer standards. Boeing additionally pushes fully assembled aircraft with traveled work, which represents extended periods of time in the EMC or the flight line before delivery. This 90 day moving average is an attempt to reflect a better financial prediction based off delivery per month rather than proposed production counts that contain traveled work to be completed or Customer extended time on the flight line awaiting customer standards installed. The 90 day production delivery moving average is a more realistic view of meeting Boeing's 10 production goal as it struggles to implement production change , customer inputs before delivery and 787 completeness testing before that same delivery. In other words, Production completeness bench mark is captured on day of delivery and customer acceptance.

A moving average smooths those Boeing bumps and customers delays into an average number which incorporates months of high numbers and low numbers from actual production flow out the big doors. It engulfs those EMC and Flight line contributions. Finally any customer delay is incorporate with a more representative production to delivery number.

The below numbers are a quick and efficient view, representing the complexity of a production number that Boeing could  use in over-all performance from inception of parts to delivery. The 10 a month goal for 787 must have all the various time flows through a final delivery number per month, rather than factory production in units. Boeing doesn't get paid until the 787 is delivered. That is the investors point of view. This handy chart below is just a reference point for time valuation of money based on production and delivery benchmarks.


Goal +/-                   12/2013   01/2014 02/2014  *03/2014  *Projected Mo
Month Deliveries            11               4               4              10
3 M-M-avg                       8.7            8.0              6.3           6.0
Production Goal             10             10               10            10
Production Trend (+/- ) -1.3        - 2.0               -3.7        -4.0

The production/Delivery  trend indicates Boeing is currently falling downhill in the first part of the year. My expectation, Boeing is holding a backlog of production examples, through its decisions that it has in the works at South Carolina, and is regrouping the mid-section unit in Charleston. Boeing is also doing some regrouping of effort  in both Everett and Charleston during this part of the year. By third quarter when the 787-9 starts delivery Boeing and its customers begin a strong march towards a + 10 a month number in sucession. The minus  numbers (production trend) a month will evaporate by May and begin a solid position at the 10 level of production and delivery reign, until the backlog is caught up.  By years end Boeing will have 200 flying copies in customer hands. That coincidentally will shadow the A350 entry into service.

Boeing needed a five year head start with its technology leap over the A350. Airbus took the low road to catch up with Boeing on an all new plastic airplane. But it did not catch-up at all with Boeing's overly complex and efficient aircraft. The Airbus fails by using dumbed down hydraulics and not using something similar to Boeing's robust core systems as found on the 787. When Boeing flies its 200+ 787 by years end, its leap in technology will have a completely smoothed out "Technological Gap" over Airbus from glitching. The only change that I can see coming from Boeing is testing and installing a new type of LI-Ion battery as science stabilises the L-I from  labs. That effort is on track at this time with new battery substrates at the molecular level absolutely calming any heat problems.