Operations management is indeed about continuous improvement and this WSJ article illustrates the point brilliantly with Boeing. What they do is applying principles of Kaizen to their processes. Shaving off 15 minutes from an activity may not seem much in the context of aircraft production but things do add up. What is interesting about the article is the numbers.Here are some excerpts:
Workers here recently boosted 737 output to 35 jets a month from 31.5, and Chicago-based Boeing aims to produce 42 planes a month in 2014. Executives said they are studying ways to eventually reach 60 a month as they plan a retooled version of the plane called the 737 Max, a jet that Boeing expects to begin delivering in 2017. The company is trying to pare an order backlog of some 3,700 jetliners, including about 2,300 of its best-selling 737s.
“How do you produce more aircraft without expanding the building?” is the question Boeing managers in Renton continually focus on, said Eric Lindblad, vice president for 737 manufacturing operations. “Space is the forcing function that means you’ve gotta be creative.”
Boeing today takes about 11 days for the final assembly of jets at the Renton plant. That’s down from 22 days about a decade ago, but the company has for years set goals to go even lower. Mr. Lindblad said the company’s near-term goal is to whittle that number to nine days.
First of all, 11 days to assemble an aircraft is impressive. I’ve been following the development of a new Russian passenger jet SSJ 100 and I suspect they are dreaming about this kind of numbers – since April’11 just 6 have been delivered so far – which is about 2 aircrafts every 3 months. Boeing produces 35 a month. Moreover they want to produce even more. And here comes my question – do they know operations? The answer is –
– YES. There is a simple way to check feasibility of their expansion plans – Little’s Law. According to it, process inventory is proportional to throughput rate times flow time of the process. For Boeing, throughput is 35 jets/month and the flow time is 11 days, which gives that on average there are about 13 737s in production at the plant at any given time. Now, space is indeed a constraint, so it’s unlikely that they squeeze in one more jet on to the plant floor. So if they want to increase throughput, they have to decrease flow time, or assembly time for a 737. Their near term goal is 42 jets per month. By Little’s law the assembly time should be 13/42=0.3 month or 9 days! Right on, Mr. Lindblad!