Navigating Through Supply Chain Turbulence With Additive Manufacturing at Boeing

Boeing has turned to additive manufacturing to avoid supply chain bottlenecks and save costs in an increasingly fast-paced industry.

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 [1]. 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 [2]. 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 [3].

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” [4].

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” [5].

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 [6]. 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.

(708 words)

References

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.

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10 thoughts on “Navigating Through Supply Chain Turbulence With Additive Manufacturing at Boeing

  1. Great essay! I certainly wouldn’t want to see Boeing get into fields outside of aerospace, I totally agree that AM should allow Boeing to explore new shapes. For example, maybe it’s possible to vary the camber and angle of the wing as it moves from root to tip to be more efficient at high speeds while retaining low-speed stability and lift characteristics.

  2. “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.”

    While it seems clear that Boeing is a leader in this space, what do you think Airbus’s perspective might be on relaying on their largest competitor for key components? I imagine Airbus would frown upon the idea. But given Boeing’s historically low margins, and the high value add of this technology, might Boeing consider transitioning away from airplane assembly, and towards this field? Or, more realistically, spinning off the 3D mfg unit into a stand alone, independent company, to better serve Boeing’s competition?

  3. A well-written and insightful piece. The author attributes Boeing’s success to the development of additively manufactured components. I think one implication of this argument worth clarifying is the apparent adeptness with which they have integrated these components into their production processes. I would be interested to learn more about their strategy in this regard; given technical similarities between aircraft and their relatively long duration of production, I wonder if and how Boeing is leveraging additive manufacturing to minimize work-in-process inventory.

  4. Fascinating read! I love the way the author frames Boeing’s recent success and Airbus’ recent struggles around its adoption of additive manufacturing.

    I wanted to share one question and one thought:
    1. How does Boeing think about which parts to 3D manufacture and which parts to source from traditional suppliers? Is it parts that have many small pieces that can be consolidated into a single piece? Is it parts that their suppliers aren’t able to deliver reliably? Is it parts that have a lot of variation between their different plane models?

    2. I love the idea of Boeing using their expertise in 3D manufacturing as a springboard to innovate the traditional airplane design. In addition to the all the cool amenities and comforts one could imagine them incorporating, I was wondering if it could allow them more flexibility in creating planes of different sizes. One could imagine, for example, a situation where engines were so complex and involved so many parts, that it was too expensive to manufacture small ones for commercial use. However, with 3D printing, perhaps 30 – 40 seat planes become economically feasible. This could increase seat utilization, and help increase their suite of product offerings to different airlines that might better suit their needs. It could also enter the market for private jets.

  5. Very interesting reading about how Boeing has used 3D manufacturing, and used it effectively compared to rival Airbus. However while this is definitely an advantage, I had a couple questions that required food for thought.

    1) The author recommends selling these components back to Airbus? Wouldnt this be a disadvantage, since Airbus then could use and replicate this technology, and develop this competence in house.

    2) While Boeing has not had many customer issues, it did have huge delays in its 787 dreamliner. One of the Japanese airlines that used this aircraft had to ground the airplane, because of issues with Lithium Ion batteries.

    3) Are additively manufactured components, structurally suitable for the aerospace industry, with all its regulations?

  6. Initial investment required to set up 3D printing equipment for large components (such as the air foil) may be bigger than the non-additive, traditional manufacturing equipment (such as molds or press), but because the 3D printer can be used for subsequent models (not bound by the physical shape of the mold), it may end up costing less in the longer term.

    One thing I found very intriguing was the fact that most of the components and sub-assemblies for aircraft manufacturing is done in a geographically dispersed manner, such that parts have to fly into Renton/Everett/South Carolina. The transportation cost must be significant. The fact that it is a very complex, expensive(USD 80-200mil per unit) product does not justify such dispersion, because shipbuilding and offshore oil & gas construction (USD 80-5,000 mil per unit) has a more geographically concentrated manufacturing base. Automobile manufacturing also has a cluster system where the factories of sub assemblies and parts are adjacent to the main assembly factory. Perhaps additive manufacturing could reduce the complexity of manufacturing for aircraft and bring the manufacturing sites closer to each other, thus result in reduced cost?

  7. Fascinating look at an under-reported part of Boeing’s supply chain! It strikes me that many of the parts Kim Smith mentions as currently 3D printed for Boeing commercial aircraft are internal or passenger facing components: stow bins, sidewalls, furnishings, etc. I would be curious to learn more about the inherent limitations of additive manufacturing and its ability to create components that have the requisite tensile strength and resilience to serve as structural components for aircraft. You note that the FAA has approved the first structural additively manufactured part; is it feasible that one day all parts could be additively manufactured?

    I also wonder, as larger and more complex parts are created through AM, are there still meaningful supply chain improvements over subtractive manufacturing? It’s not clear to me that additively manufacturing an entire wing results in lead time or transportation efficiencies over subtractive processes.

  8. Great article and really appreciate your perspective on Boeing’s under-reported part of the business.

    I was surprised to read about Boeing’s investment in 3D printing in their current manufacturing process, but also on their venture capital investments in companies that are developing novel applications for 3D printed materials. If the theory holds true, given the cost advantages of 3D printed parts, and the improvement of technology, I expect to see Boeing perform really well in the near-medium term.
    I do wonder if their bets on 3D printing are paying out if currently all that is being used for “stow bins, sidewalls, ceilings, furnishings, and crew rests” which doesn’t seem like the heaviest cost part of their manufacturing process. Those components simply don’t seem like high-cost components so how much savings are they really getting? I wonder why 3D printing isn’t applied to structural parts of the aircraft?

    Also, I challenge the idea of selling those 3D printed parts to competitors. As an Airbus, I wouldn’t necessarily want to source my component from the competitor. I could see them supplying 3D printed parts to an aerospace company – such as SpaceX or Blue Origins.

    Overall, great article and very logical arguments.

  9. Insightful article on Boeing! I find their successful incorporation of additive manufacturing to be fascinating, and as noted above, think that this could be useful to other companies looking to incorporate additive manufacturing.

    You did a great job mentioning that Boeing should potentially test new designs or structures to improve performance or reduce costs. An additional consideration that I think Boeing should look into is the ability to quickly try and test whether using different types of materials to strengthen, improve aerodynamics, or reduce costs. 3D manufacturing seems to have the capability to promote rapid prototyping at lower costs.

  10. Solid read! It’s fun thinking about all the other ways Boeing may be able to implement additive manufacturing to their product development life cycle. Another idea is for Boeing reduce the plane maintenance throughput time by creating an on-demand maintenance service that would allow for plane engine parts to be printed in the hangars. The airlines would likely find value through increased plane utilization and ease of managing the maintenance process.

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