Due to surging demand for air travel over the past decade, Boeing has more than doubled its annual aircraft production from roughly 300 planes in 2005 to over 800 in 2018 . Scaling production has proved challenging due to the extreme complexity of commercial aircraft: Boeing’s smallest commercial model, the 737, is comprised of 367,000 individual components, while the larger 747 contains millions of parts . Boeing’s primary competitor, Airbus, has struggled to keep pace with industry growth and has missed numerous delivery deadlines for new planes, primarily due to supply chain constraints. Boeing, on the other hand, has been able to avoid any major customer issues to date.
What has enabled Boeing to achieve this remarkably consistent performance? While some Wall Street analysts attribute the company’s success to strong management and deep operational capabilities, I believe additive manufacturing has played a significant (and underrated) role.
Boeing was an early innovator in additive manufacturing, and it has become integral to their manufacturing process. The company first began researching additive manufacturing over 20 years ago and continues to invest heavily today due to the ability of 3D printed components to alleviate supply chain constraints, cope with short lead times from customers, and save costs. As of 2017, over 60,000 3D printed parts were in use across Boeing’s commercial fleet. And these components come in all shapes and sizes; in fact, the 3D printed wing trim for Boeing’s upcoming 777X aircraft, which measures 17.5 feet long and weighs 1,650 pounds, will be the world’s largest solid 3D printed item in commercial use .
Given the supply chain, customization, and cost advantages of 3D printed parts, Boeing expects their use to continue to increase going forward. According to Kim Smith, vice president and general manager of Boeing Commercial Airplanes Fabrication, “Additively manufactured components are [currently] incorporated into stow bins, sidewalls, ceilings, furnishings and crew rests. These parts include lanyards, seals, spacers, as well as premium fairing closeouts and sign bezels. Boeing continues to develop ideas internally and with suppliers and customers as the technology and materials mature” .
Looking longer term, Boeing has also decided to make a variety of venture capital investments in companies that are developing novel applications for 3D printed materials. Boeing has invested in four additive manufacturing start-ups thus far in 2018 alone: Assembrix, Morf3D, Oeklikon, and Digital Alloys. Announcing the investment in Digital Alloys in August, Brian Schettler, managing director of Boeing’s HorizonX Ventures division, summed up the goal of these venture capital bets: “Our investment in Digital Alloys will help Boeing produce metal structural aerospace parts faster and at higher volume than ever before. By investing in companies with emerging additive manufacturing technologies, we aim to strengthen Boeing’s expertise and help accelerate the design and manufacture of 3D printed parts to transform production systems and products” .
As additive manufacturing technology continues to advance, my recommendation for Boeing would be to invest even more aggressively to replace third party components. In 2017, the FAA approved the first 3D printed structural aircraft component, which manufacturer Norsk Titanium estimates could save Boeing $3 million on every jet built . Given the notoriously thin margins of the airplane industry, this development would likely be lauded by investors. I would also suggest that Boeing considers selling the 3D printed parts they create to competitors (including Airbus) since Boeing is a leader in developing this technology and may be able to generate significant incremental revenue from sales of these components.
There is no doubt that Boeing has made incredible advances in additive manufacturing, and in doing so given themselves a meaningful competitive advantage. However, I wonder if Boeing should be using this technology more creatively, perhaps to deliver even more differentiated airplane designs than we’ve seen to date? For example, with the FAA approving the use of additive manufacturing for structural applications, it may be possible to develop lighter, faster planes than ever before. Furthermore, there may be other applications for this technology beyond airplanes that Boeing could explore. Perhaps Boeing could even consider entering other advanced manufacturing industries such as automotive? While aerospace has been the company’s core competency historically, these advances in additive manufacturing may enable them to expand their product portfolio and generate incremental value for shareholders.
1 – Robert Wall and Doug Cameron, “Boeing, Airbus Strain to Deliver the New Jets They Have Promised,” Wall Street Journal, July 15 2018, www.wsj.com/articles/boeing-airbus-strain-to-deliver-the-new-jets-they-have-promised-1531652400, accessed November 2018.
2- Allison Linn, “Hundreds of Suppliers, One Boeing 737 Airplane,” NBC News, April 28 2010, http://www.nbcnews.com/id/36507420/ns/business-us_business/t/hundreds-suppliers-one-boeing-airplane/#.W-YUg5NKg2w, accessed November 2018.
3 – Boeing, “Boeing: One for the Record Books.” https://www.boeing.com/features/2016/08/record-books-08-16.page, accessed November 2018.
4 – Kerry Reals, “Boeing Expects 3D Printing to Help Airlines Customize Cabin Interiors,” Runway Girl Network, June 26 2018, https://runwaygirlnetwork.com/2018/06/26/boeing-expects-3d-printing-to-help-airlines-customize-cabin-interiors, accessed November 2018.
5 – Boeing, “Boeing HorizonX Ventures Invests in High-Speed Metal 3D Printing Company Digital Alloys.” http://investors.boeing.com/investors/investor-news/press-release-details/2018/Boeing-HorizonX-Ventures-Invests-in-High-Speed-Metal-3D-Printing-Company-Digital-Alloys/default.asp, accessed November 2018.
6 – James Vincent, “3D-printed Titanium Parts Could Save Boeing up to $3 Million per Plane,” The Verge, April 11 2017, https://www.theverge.com/2017/4/11/15256008/3d-printed-titanium-parts-boeing-dreamliner-787, accessed November 2018.