CASE STUDY

Boeing 787: Global Supply Chain Management Takes Flight

Leveraging Global Partners to Maximize Customer Value

Company Profile

Worlds leading aerospace company and

the largest manufacturer of commercial
jetliners and military aircraft combined
Goal

Leverage global partners to reduce cost,

speed time-to-market, and increase
customer value while maintaining the
highest level of safety
Challenge

How to maintain visibility and control while

transitioning from a vertically integrated
manufacturing model to a global partner
model that leverages providers of best
value components and technology
Solution

Exostars Supply Chain Management

Solution powered by E2open software to
provide end-to-end management of the
order, inventory, and planning processes
executed across multiple tiers of supply
partners
Expected Results

Eliminate latency in communicating

demand /supply changes and change
impacts across partner tiers
Ensure continuity of supply while
minimizing supply disruptions
Improved on-time delivery and ship-tocommit date with end customer
Provide global visibility to all partners
involved in the delivery of the completed
assemblies
Reduce total manufacturing cost by
leveraging best price and value
partners globally

The new Boeing super-efficient jet liner is the 787 Dreamliner. Scheduled for
delivery beginning in 2008, the Dreamliner provides passengers with a better
flying experience and operators with a more efficient commercial jetliner.
Because it uses 20 percent less fuel per passenger than similarly sized
airplanes, the 787 is designed for the environment with lower emissions and
quieter takeoffs and landings while traveling as fast as todays fastest wide
bodies, Mach .85.
In order to achieve this exceptional performance, Boeing established a core
team of the worlds most capable aerospace companies to design key
components of the airplane. As an example, Boeing partnered with General
Electric and Rolls-Royce to develop engines for the new airplane and
expects that advances in engine technology alone will contribute as much as
8 percent to the increased fuel efficiency of the new airplane.
Boeing has worked collaboratively with its partners to engineer the new
Dreamliner, and has also adopted a completely new manufacturing model to
produce the airplane. Boeing will leverage its extended supply chain and
partner manufacturing resources as a competitive advantage to improve
time-to-market and reduce total cost. For the first time in Boeing history, the
majority of the airplane will be fabricated by global partners and will be
delivered as major subassemblies which Boeing will assemble and test at its
facility in Everett, Wash.

Copyright 2013 Exostar LLC. All rights reserved.

Boeing 787: Global Supply Chain Management Takes Flight

In addition, the ability to have a

common view with our partners of
real-time, supply chain performance
reduces risk, improves cycle times
and ensures compliance with agreed
processes, said Tim Opitz, director
of 787 Production and Support
Tools in Boeing Commercial
Airplanes. By helping us
proactively flag any business process
exceptions as they occur among our
network of partners, and providing a
consolidated view of all
material movements across the supply
chain, the Exostar solution is
expected to tighten our efficiency in
the way airplanes are
manufactured.

With Boeing now operating as the final assembler of the airplane,

coordinating the many structural and systems partner locations spread
around the globe is paramount to the manufacturing success. Boeing has to
synchronize demand/supply and logistics information across multiple partner
tiers so key components arrive at the Boeing Everett, Wash., facility at just
the right time for final assembly over a three-day period.
Strategy for Achieving Results
Leverage best in class component and technology providers from around
the world
Establish shared risk model between Boeing and its supply partners
Synchronize demand/supply, order, and inventory information across all
supply partners
Establish a highly coordinated set of logistics processes and
transportation mechanisms to ensure on-time delivery of all assemblies
How the Strategy was Executed
Move to partner-led manufacturing and fabrication model for the 787
Dreamliner
Establish partner managed inventory programs with Boeing managed
contracts to share risk and improve supply availability
Implement common tools to provide global visibility to all demand/supply,
order, and inventory information across multiple tiers of partners
Invest in logistics visibility tools and specialized transport mechanisms to
reliably move large subassemblies globally

Challenges Posed by Partner Manufacturing Model

The Boeing 787 Dreamliner represents a fundamental shift in manufacturing
philosophy and approach for The Boeing Company. With 135 structural and
systems partner locations around the world involved in the manufacturing
and fabrication of the airplane, coordinating the end-to-end supply chain
across these partners is paramount to the programs success.
One of the biggest challenges in this production model is ensuring that all
partners have access and visibility to the latest demand information from
Boeing and that Boeing has visibility to the suppliers ability to meet the
delivery schedule. It is crucial that all of the major subassemblies arrive in
Washington at the same time for final assembly. If a subassembly is late or
missing, there is very little time or space for Boeing to store the other large
components. If a partner can not meet an expected delivery date then
Boeing must adjust the schedule and potentially delay the arrival of the other
assemblies.
Another critical success factor is to ensure continuity of supply of component
parts being consumed by the Tier 1, volume partners. Due to the critical
nature and dollar value of some of these component parts, Boeing retained

Copyright 2013 Exostar LLC. All rights reserved.

Boeing 787: Global Supply Chain Management Takes Flight

The Aircraft

Thousands and thousands of unique

parts will be used to build the airplane
50 percent of the primary structure,
including the fuselage and wing, will be
made of composite.

contractual relationships directly with the Tier 2, providing partners. One of

the benefits to the Tier 2 supplier is shorter payment cycles. The challenge
was implementing a pull based replenishment model between the Tier 1 and
Tier 2 partners that could be supported by the commercial relationship and
payment process between Boeing and the Tier 2 partners.

11 major subassemblies will be

delivered to Everett, WA for final
assembly.

Above all else, Boeing and their partners needed a way to quickly identify
potential problems across the supply chain and immediately assess their
impacts on other partners or aspects of the manufacturing process. As an
example, if a component part replenishment shipment was late, will it cause
a potential stock-out at a Tier 1 provider? If it will, then which delivery
schedule will be impacted and against which finished airplane? What are the
other subassembly production schedules that must be adjusted as a result?
Having global visibility to process exceptions across the supply chain is
critical to delivery performance.

First flight is expected in 2007 with

certification, delivery and entry into
service occurring in 2008

The following highlights several business process flows executed between

partners across several tiers of the 787 supply chain:

More than 100 partners across 12

countries on 5 continents are involved
in the manufacturing and delivery
process.

Exostars Supply Chain Management Solution

Boeing turned to Exostar for a solution to help manage processes executed
across multiple tiers of their supply network. The Exostar Supply Chain
Management Solution, powered by E2open software, is used to manage the
complete order lifecycle and returns process across the multiple partner tiers,
while also tracking planning schedules, consumption, and managing
replenishment for the Boeing Partner Managed Inventory program with Tier 2
partners.
The Exostar solution is designed to allow Boeing and its partners to
collaborate on planning schedules, issue purchase orders, track purchase
order changes, exchange shipping information, manage returns, track
shipments, and to manage inventory consumption across the multiple tiers

Copyright 2013 Exostar LLC. All rights reserved.

Boeing 787: Global Supply Chain Management Takes Flight

Challenges in Managing
External Processes

As outsourcing increases, companies

must find new ways to manage complex
processes across multiple supply chain
tiers.
Companies require visibility and
control into demand/supply and
execution processes in order to reduce
complexity, risk and cost.
To facilitate effective collaboration,
partners must have a trusted, single
source of truth to evaluate real-time
performance across the supply
network
Companies require process automation
with performance filters that allow
management by exception and early
identification of potential problems
anywhere in the supply chain
Participating companies in the Extended
Enterprise must be able to trust the
identity of individuals and have nonrepudiation of actions taken

involved in the manufacturing process. The system also monitors events

and process exceptions that occur between partners and evaluates the
impacts of these events against the master schedule using synchronized
time-sequenced information. The solution includes reporting capabilities that
allow Boeing and its partners to track overall performance of the supply
chain.
Exostars Software-as-a-Service delivery model and existing network of
connectivity into the A&D supply chain enabled Boeing to go-live with the
solution in less than 90 days from project kick-off. Boeing was able to
leverage its investment in enterprise systems to quickly connect to Exostar in
order to enable its supply chain processes across the extended supply chain.
Exostars solution was configured to meet Boeing current process
requirements, and can evolve as process requirements or partners change
over time.
Leveraging the Exostar Supply Chain Management Solution to manage the
Boeing 787 program was a logical decision for Boeing who has standardized
on Exostar for managing their external information flow with supply partners.
Exostar is a well established technology and service provider to the
Aerospace and Defense community, currently managing demand and supply
processes between 20,000+ companies in the industry. The Exostar Supply
Chain Management Solution is powered by E2open software. E2open
software currently powers some of the worlds largest supply chain hubs in
various industries including electronics, telecommunications, automotive, and
heavy equipment.
The following highlights the solutions deployed by Boeing, Exostar, and
E2open:
Multi-Tier Order Management
Manage the complete order lifecycle from order issuance through invoice
and payment across partner tiers
Align order information and partner commitments against planning
schedules
Synchronize payment with consumption of partner managed inventory
Manage and track inventory through the returns process
Reporting and Analytics
Provide ability to report on key performance indicators and to track
process against defined metrics
Provide reporting on parts inventory, delivery performance, schedule
changes, returns and replacements
Community Management and Support
Includes existing connectivity to over 23,000 companies and robust
partner enablement program
Supported 24/7 by call center, technical operations, and on-line training
as outlined in industry leading service level agreements

Copyright 2013 Exostar LLC. All rights reserved.

Boeing 787: Global Supply Chain Management Takes Flight

About Exostar

Exostar powers secure collaborative

supply networks helping manufacturers
and suppliers work together to gain
visibility, control and integration of critical
business processes, speeding time-tomarket, increasing profitability and
reducing risk. Exostar was founded to

Multi-Tier Demand/Supply Synchronization

Communicate planning schedules and changes across partner
community
Evaluate impacts of partner commitments on delivery schedule to end
customer
Highlight demand/supply imbalances and schedule mismatches
Partner Managed Inventory
Provide visibility to partner managed inventory balances, consumption,
and replenishment plans
Track projected inventory balances and supply availability against
production schedules
Measure supplier performance in fulfilling replenishment targets

support the complex trading needs of the

worlds largest aerospace and defense
companies, including BAE Systems, The

Security and Identity Management

Protected by role based single-sign on and best-in-class identify
management framework
Secured with end-to-end data encryption and non-repudiation

Boeing Company, Lockheed Martin Corp.,

Raytheon Co. and Rolls-Royce. Today, its
on-demand solutions provide business

Benefits
Boeing again is leading the way in commercial aviation with the introduction

collaboration, secure infrastructure and

of the 787 Dreamliner. By leveraging a world class, global team of partners,

supply chain execution capabilities for

they are able to provide unparalleled value and advanced technology to their
customers. By leveraging a world class supply chain management solution

34,000 trading partners worldwide.

from Exostar and E2open, they are able to minimize waste in the supply
chain while managing on-time delivery to the end customer.

For more information, please visit

www.exostar.com.

Some of the anticipated benefits of the integrated supply chain solution

include:

Copyright 2013 Exostar LLC. All rights reserved.

Eliminate latency in communicating demand/supply changes across

multiple partner tiers
Ensure continuity of supply and minimize supply disruptions through the
real-time synchronization of demand with available supply
Improve cash flow for supply partners participating in partner managed
inventory programs
Early identification of potential demand/supply imbalances and their
impacts on other partners or aspects of the supply chain
Improved on-time delivery to the end customer while minimizing logistics
costs
Eliminate many of the manual activities associated with communicating
new delivery schedules and order changes across multiple tiers
Reporting and analysis for continued process improvement over the
lifecycle of the program
Move to exception based management of the end-to-end process across
partners and partner tiers