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The order backlog for both 737 and 787 Dreamliner aircraft today is important for Boeing. What effect does the delay have on its production plans? What could the company do without sacrificing quality to increase the production?
Boeing Take over production capacity, which further leads to their declining demand, existing demand and increased aircraft traffic. The backlog led the organization to adopt ways to increase efficiency without increased costs or to extend its facilities. The company is now working on faster and more effective manufacturing methods in order to meet their increasing repercussions and the increasing demand for their aircraft. For example, a production team decided to change the sequence of tasks involving painting parts which save 10 minutes per employee on painting jobs. Other members of the production team determined that preassembling some groups of hydraulic tubes before mounting them on the wheel saves up to 30 hours of working on a Boeing 737.
Boeing values quality since in this case, poor quality could mean life at stake. The company has combined a fixed position layout, highly skilled professionals, and quality testing in the process to ensure highly efficient production. Part of this involves reducing defects by employing preventive measures during the process, for example, putting a canvas on wheels until the aircraft is ready for release.
Do you agree that a just-in-time inventory system is appropriate for Boeing’s 787 production? Explain your answer.
The just-in-time inventory system involves receiving goods from the suppliers when they are required rather than having them in store at once. Many large manufacturing firms adopt the just-in-time inventory management system in stock control because it reduces storage costs as less space is needed to store inventory since the stock held by the company is only the fast turnaround stock. JIT inventory system also helps a company maintain healthy cash flows since the firm only invests in short term stock allowing it to free up funds to finance other aspects of the business.
The just-in-time inventory system is not suitable for the production of Boeing’s 787 aircraft since it does not cater for unforeseen design and assembly glitches as well as the shortage of parts; major contributor to the current Boeing’s 787 backlog. All the same, adopting this method of inventory management will expose Boeing to the risk of running out of stock for production especially if its suppliers are not very efficient.
One production team suggested changing the sequence required to paint parts and saved 10 minutes per employee per job in the paint job. How do suggestions’even those that result in small improvements in the production process’ improve the company’s ability to meet customer demand, improve quality, and increase profits?
Improving the manufacturing process reduces the amount of time and resources that necessary in production by making the general manufacturing process more efficient and effective. A faster production system allows a company to handle more demand while offering better quality products all the same. Such boosts its sales while reducing costs of production, therefore, increasing profits.
Financial Summary.
Income statement
2016 2015 2014 Total Revenues $94,571,000 $96,114,000 $86,623,000 Less expenses $80,790,000 $82,088,000 $76,752,000 Net income $13,781,000 $14,026,000 $14,010,000 http://www.nasdaq.com/symbol/ba/financials?query=income-statement
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