Lean Manufacturing Initiatives at Boeing

Boeing began implementing lean manufacturing principles in 1993. The company employed a Japanese consulting firm to assist in the task at its commercial aircraft division. However, because of Boeing's decades-old operational inefficiencies, it failed to reap the benefits of lean manufacturing. Analysts felt that Boeing's corporate culture was one of the reasons for the above failure. Though executives knew about the manufacturing problems, the company-wide attitudinal problems thwarted any corrective measures. This attitude was due to the environment in which the company was doing business for a long period. Its major customers – mostly state owned airlines, protected by regulation, and the free spending US Department of Defense – never cared about the prices.

As a result of the above initiatives, Boeing was able to reduce its inventory levels by $1 billion since January 1999, and was also successful in reducing the manufacturing time by 60% and manufacturing floor space by more than 50%. This helped the company to lower the production cost and also freed the manufacturing capacity. Boeing utilized this opportunity by entering into contracts with Delta Airlines and Alaska Airlines to manufacture replacement floor panes for their airplanes.

Boeing was able to release tens of thousands of square feet of floor space for new business production...