What could Boeing take in-house next?
“It’s bigger than what many people realize,” says Kevin Michaels, managing director of the consulting firm AeroDynamic Advisory. “They’re reinventing the supply chain and there’s a lot more vertical integration to come.”
Michaels says the company is essentially working its way through the aircraft, assessing each component by three parameters: Is it strategic technology that Boeing should take control of? Is Boeing getting good value on it from suppliers? Would making it in-house provide an opportunity for higher-margin after-market service revenue?
Here are some of the leading candidates:
The airframe: Boeing pushed outsourcing to an extreme on the 787 Dreamliner, with 65 percent of the airframe farmed out to a medley of suppliers in the U.S., Europe and Japan. The result: years of production snafus and delays. Boeing was forced to buy out some partners, including two fuselage suppliers. With the forthcoming 777x, it brought the wings back in-house.
Timely, incisive articles delivered directly to your inbox.