Monday, June 1, 2015

Boeing On The Production Cusp Of Greatness

Boeing fires off 787 production beyond its expectations of ten a month, by the end of Month Five, 2015. January experienced only seven 787 delivered, as per normal, during its first of the year factory regrouping.  It has delivered 54, 787 before even the annual midpoint arrives at the end of June. The item of note is how well the 787-9 is blending into production without any seeming interruptions going from 787-8 to 787-9 production and back. This is the same condition at both facilities.  All of this shows that even with a slow January start, and a two model production flow, Boeing is ready to project twelve a month before 2016. As in reality it will try to go further with 14 787 a month on some monthly occasions, until it has smoothed into a solid 14 a month by 2018.


Having summarized this notion of 14 a month by 2018, it will have to include the introduction of the 787-10 by 2017. Boeing may opt in two years to go with an exclusive 787-8 production, and 787-10 production in Charleston only. There are about 205 787-8’s currently in backlog and 142 787-10’s on order, totaling about 347 787’s for Charleston using this balance. Everett would take on the load for the 787-9 backlog, now standing at 477 787-9’s.



Going all-in with the 787-9 in Everett, it would show mastery for the 787 program while optimizing both facilities in this manner. After considering the 777X program needs the former 787 surge line in Everett for the breeding of the 777X development, all the production pieces fit together. This would be also true since the 777-300-ER remains on its current production line for customer delivery. Additional sales in the interim can be absorbed easily once the backlog goes within 600 in number of 787’s remaining after the next 18 months in time has passed. Having under 700 in numbers with the 787 backlog, matches Boeing's production capability with a customer's five year plans and needs. it allows for additional and continuous purchases of fifty units a year during a production cycle.

Twelve A Month Scale:

  • (5 years) x's (12 787 a month delivered) = (720, units delivered in five years)
  • (Current Back Log of 823)- (720 units factored in the window ) = (103) 787 until it reaches the buyer's manageable 5 year waiting back log number of 720.
  • Adding any sales during the year, 35 so far, production backlog becomes a static number over-all. 
There remains one problem for both the customer and Boeing. Urgency for these aircraft  is high as airlines are planning expansion and it needs to grab routes while they remain hot. Long legged routes have a finite availability.  As if this were a "Gold Rush" of the air at this time. The prospecting airlines need the 787, and 777 now. Both are booked up beyond the impulse and opportunity windows for the customer. Airbus has filled its A-350 window with 779, A-350 orders. Playing off of each air-frame builder for available instant gratification or immediate build slots, is a dicey and uncertain result and frustrates the planners. This is the Golden era for those who seized the opportunity at its beginning in 2007.

Boeing should be able to make Six 787-9 a month in Everett while in Charleston, SC three 787-8 and three 787-10’s a month, balancing its backlog and increasing productivity in some kind sensible flow for twelve-a-month over-all for its three types during 2017. If Boeing goes to 14, 787 a month, (during 2018) for all three types, more schedule shuffling will occur at both facilities. It will be a strategy Airbus will have to address if it wants to keep up with Boeing for its own customer’s sake of competition. “The early bird gets the routes and airplane sales”, during the World of Air Wars for routes, passengers, and airplanes.


Data Sources: All Things 787; Boeing.Com: Winging IT Analysis