Arena Blog

Without Supply Chain Oversight, Boeing Flew Blind

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Boeing Supply Chain ManagementManufacturers without visibility across their supply chain can heed the warnings of Boeing. The airline manufacturer faces an indeterminate grounding of the Dreamliner because of both a 2013 mid-flight battery fire on a 787 in Boston and a smoldering battery on a following flight in Japan.

How could a system failure this dangerous occur?

In a compelling 2013 report by the Seattle Times, company engineers blame the 787’s outsourced supply chain, saying that poor quality components are coming from subcontractors that have operated largely out of Boeing’s view. In essence – when it came to its suppliers – Boeing was flying blind.

A Boeing engineer, who chose not to be identified, said the company’s lack of visibility into the outsourcing and delegation to multiple tiers of suppliers had come back to haunt the jet program. Although the engineer did say the company eventually made tardy attempts to rein in oversight of its suppliers, it was deemed to be dangerously too little, too late.

What was the specific problem? How could this happen?

The 787 power distribution panels, which control the flow of electricity to the plane’s many systems, were described as being of “Radio Shack”-like quality with parts termed “cheap, plastic and prone to failure.”

Specifically what happened was Boeing contracted with approximately 50 top tier suppliers, handing them absolute ownership of the design of their respective piece of the plane with each top tier supplier responsible for managing its own subcontractors. But in cases like this when something goes wrong – it’s not the supplier who is at the pointy end of that stick – it’s Boeing that pays most of the associated costs to rectify the situation. This damage also includes brand damage via nightmarishly bad publicity. And it’s Boeing that the FAA holds responsible.

To give companies greater visibility into their suppliers’ suppliers, Arena developed Arena Exchange, a revolutionary new product that offers OEMs a secure, flexible and traceable environment for collaboration with multiple users at different supplier levels throughout their global supply chain.

Arena Exchange Helps Control Supply Chain Quality

With Arena Exchange, more long distance stakeholders are brought in earlier, so changes and improvements are made earlier in the design process. Arena Exchange is secure, requires no supplier licensing or provisioning, and works with any enterprise product lifecycle management (PLM) system that uses PDX.

Arena Exchange Boeing

Using Exchange, global supply chain partners collaborate on efforts like transferring product data for quick turn prototypes, determining the cost or schedule impact due to a change order (ECO), proposing alternative solutions to a component shortage, and soliciting competitive quotes on new or existing releases.

Exchange enables supply chain team members to share and collaborate on the original product record with no user provisioning. Zip. Suppliers can review build package data, provide feedback through an integrated commenting stream, and approve/reject objects such as change orders. Now, instead of being able to afford but a few suppliers to engage with, a savvy global outsourcer can cost effectively communicate with hundreds – even thousands.

Outsourcing has leveled the playing field in terms of commerce and streamlined processes; however, it has also introduced a host of new vulnerabilities. For example, OEM loses visibility into the quality of the components and parts supplied by their extended supply chain team.

Had a company like Boeing had greater control on their supply chain with better ability to manage their suppliers’ suppliers, this problem could have been averted.

Arena Exchange allows OEMs using any PLM system to forward and share build packages across the supply chain without burdensome user provisioning; this enables more secure and robust team collaboration, resulting in better new product introductions.

Arena Exchange makes flying the friendly skies safer for everyone. Take Arena Exchange for a test flight – get your free demo today.