To survive in an increasingly competitive market, Boeing Co. has completely revamped the way it builds the 737 aircraft.

Lean manufacturing is often described as a journey. And at Boeing Co. (Chicago) that journey has been comprised of a number of smaller journeys, not the least of which is the short trip each 737 airliner takes through the company's 760,000-square-foot assembly facility in Renton, WA.

In production since 1966, the 737 is the world's most successful commercial aircraft program-by far. More than 4,000 of the aircraft have been built. Even as you read these words, some 1,200 of the aircraft are airborne, carrying passengers to destinations ranging from New York to the island of Zanzibar in the Indian Ocean. Every 4.6 seconds, a 737 takes off from an airport somewhere on the globe.

Still, in spite of this success, Boeing has not been resting on its laurels. For one thing, much has changed since the first 737 rolled off the line. Deregulation has turned commercial aviation into a cutthroat world with spectacular bankruptcies, wild swings of boom and bust, and razor-thin margins. The 9/11 attacks that affected the entire U.S. economy hit aviation especially hard, resulting in massive layoffs for aircraft manufacturers.

Then there is a certain European organization that goes by the name of Airbus (Toulouse, France), beneficiary of billions of dollars in direct subsidies from the governments of Germany, England, France and Spain. The aviation consortium is not only in a position to offer sweetheart deals to customers; it is also building some very good airplanes, not the least of which is the spectacular new A380 double-decked jumbo, which took its first flight on April 27. In 2003, Airbus outsold Boeing 305 airplanes to 281-a first. The company has been on top ever since and looks to continue that streak in 2005.

In response to these pressures, Boeing has been developing new technologies and a new airplane-the largely composite 787 Dreamliner. It has also completely revamped the 737. Today, the company is selling what it calls its "Next-Generation" 737, four new models that fly higher, faster and farther than the original, all the while burning less fuel and making less noise. In addition, Boeing has completely changed the way the plane is assembled, rethinking the process from start to finish in a way that is nothing less than revolutionary for commercial aviation.

In years past, the company's Renton facility would be cluttered with a couple of dozen aircraft in various stages of completion taking up nearly every square inch of available space. Today, there are just four fuselages receiving prep work at one end of the plant and five airplanes slowly rolling nose-to-tail down a moving line.

In-house inventories have been cut dramatically. Just-in-time has become a way of life. The number of suppliers has been reduced, and those suppliers are providing ready-to-install subassemblies as opposed to raw materials. In fact, so great have been these inventory reductions that the space previously used to store parts and materials is now used to house engineering and managerial offices. The building that previously accommodated these personnel has been torn down, the land sold.

The bottom line: In 1999, it took 22 days to assemble a 737. Today, that number has been cut to 11. Boeing hopes to eventually have each airplane out the door in a little over a week.

Still, company officials say Boeing has a long way to go.

"In terms of our maturity level, I'd say we're in the third inning of a nine-inning game," says Larry Loftis, director of manufacturing operations for the 737 program. "As you get there [on the lean journey] you see so much more opportunity... We'll be decades making improvements. And that's a good thing."

First Steps

Teasing out the beginnings of this revolution-Boeing is the only commercial airliner builder in the world that manufactures its product on a moving line-means going back over a quarter century, to when Boeing first began to suspect that it needed to find a better way of building airplanes.

According to William Gillette, vice president in charge of the 787 Dreamliner program, the process began in the early 1970s, when the company was in crisis trying to make the 747 program profitable. At the time, Gillette says, Boeing survived by doing its "homework," perfecting core technologies like fatigue-free aluminum structures and honing individual build processes. The result was that in the early 1980s, Boeing was able to simultaneously introduce two new airliners, the 757 and 767, something no aircraft company had ever done before.

Then came deregulation and an increasingly robust Airbus. To ensure profitability, Boeing executives realized they needed to improve productivity and efficiency in assembly. Clearly, it was time to do some more homework.

Like many companies, Boeing started out trying to cherry-pick from a host of management strategies du jour. In essence, the company was looking for a silver bullet, a quick fix that would solve its quality and productivity problems in one fell swoop. Then in the early 1990s, the company discovered lean manufacturing and the Toyota Production System-discovered in the sense that executives and managers came to realize Toyota's success couldn't just be duplicated with kaizen events and company songs.

"We'd thought it was all about Japanese culture," says commercial airplanes lean enterprise office leader Michael P. Herscher. "Then we figured out that it's not Japanese, it's Toyota. That was a real ‘ah ha!'for us."

Subsequently, Boeing decided to make a serious commitment to lean manufacturing. According to Herscher, between 1993 and 1998 some 1,500 employees traveled to Japan to study the Toyota Production System firsthand. These employees, in turn, started putting the lessons that they learned to work, especially in Boeing's fabrication plants, where the company manufactures subassemblies like wings, control surfaces and fuselage sections.

The reasons for this were not just strategic, but the result of dire necessity. According to Herscher, Boeing's fabrication plants were facing the prospect of having their work outsourced to suppliers that could do the work faster and cheaper. This proved to be an excellent motivator.

"People don't change unless they have to," Herscher says. "Market forces have driven us to the place where we don't have any alternatives... If you're going to exist, you have to be competitive."

In 2000, the company took the additional step of implementing its first commercial aircraft moving assembly line as part of the 717 program at the Boeing plant in Long Beach, CA. Strictly speaking, this was not a "lean" transformation. It didn't incorporate lean methodologies in a truly comprehensive way. It also relied on a huge chain in the floor to move the aircraft down the line-an approach that has since been rejected in favor of individual tuggers attached to each separate aircraft.

Still, the 717 effort served as a valuable test bed, a chance for the company to try out new approaches and new ideas. And these lessons were not without their benefits. In fact, according to Herscher, Boeing's new way of doing business was crucial to its ability to pull through recent economic hard times.

"Had we not started this journey when we did and been well on our way when 9/11 happened, we wouldn't have survived," Herscher says.

Getting in Tune

In contrast to the 717 effort, the 737 upgrade and moving line were part of a comprehensive lean effort. Again, the 737 itself was redesigned from top to bottom. Wings, engines, landing gear, auxiliary power units and state-of-the-art flight deck, or cockpit, controls: Everything was brought up to date, an effort that continues to this day as the company seeks additional operating economies and performance upgrades.

Suppliers were brought in both to help develop the products they were providing and prepare themselves for the just-in-time demands that would be placed on them as part of the new regime. (Some 16,000 parts arrive at the Renton plant every day.)

Perhaps most importantly, Boeing managers and executives made a concerted effort to include the program's hundreds of shop-floor workers-or mechanics as they are called in Boeing parlance-in this new approach. Indeed, almost as impressive as the revamped 737 workspace is the regard executives at Boeing have for the people actually doing the hard nuts-and-bolts work of putting together the airplanes that make the company what it is.

"These guys take an incredible amount of pride in their work. It's a lot more than the equipment you see [on the shop floor]. It's the people working with it," says Loftis.

"They're the only ones actually making money for us," agrees Herscher. "They're like the surgeons. The rest of us are the supporting cast."

This is not to say there wasn't some skepticism. In fact, the process is one that continues to this day. Still, as the lean manufacturing mindset became more deeply entrenched-and as its benefits became increasingly apparent-it began gathering a momentum all its own.

"When we first started out only a handful of people got the concept.... In the last couple of years we've had a much greater acceptance," Loftis says. He notes that in many cases, mechanics would be skeptical watching another team in the vicinity undergoing lean training. After seeing the benefits of the new approach, though, they would often approach their supervisors asking when it would be their turn.

"More repeatable, reliable processes mean you don't have to come in on the weekends to get caught up or fix things," Loftis says. "Overtime is at an all-time low. Injuries go down when you get a chance to rest up."

Today, employee-involvement teams and value-stream teams are helping to further hone the assembly process, often taking the initiative in making their work environment efficient and waste free. An excellent example of this kind of initiative is a conveyor-type loader for carrying seats up into the aircraft fuselage for installation. Based on the same operating principals as a hay bale carrier, it does the job in about 25 minutes. In the past, this same chore would take hours.

The end result is a build sequence that looks deceptively simple: a smooth, steady flow of technology and expertise that seems to just naturally end up in a finished airplane at the end of the day.

The process begins with the receipt of a prefabricated fuselage section from Mid-Western Aircraft Systems (Wichita, KS: The plant was recently sold by Boeing to Onex Corp., Toronto.) This section includes the nose and tail sections, and travels some 2,100 miles strapped aboard a railroad flat car.

Upon arrival, it is brought inside the plant where mechanics spend about 4 days installing wiring and ventilation equipment. Then it is moved to a wing-join position, where the aircraft's wings and landing gear are put in place.

In many ways, the most impressive part of this operation is what you don't see-the huge, stationary monument frameworks that once required multiple, time consuming crane lifts to move the aircraft from station to station. These kinds of jigs are still being used on the 777 program at the company's Everett plant. (Although they are being phased out as that program also converts to moving line.) Consisting of massive metal frameworks, complete with stairways and fully enclosed work areas, these jigs can hide an entire aircraft from view.

Once the wings and landing gear have been attached, the aircraft is attached to a track-guided tugger vehicle that pulls the aircraft down the line at a speed of 2 inches per minute. This tugger, which also pulls the scaffolding by which mechanics gain access to different areas of the aircraft, stops for employee breaks, shift changes and the occasional work stoppage. In the latter case, a series of red lights go on in the area of the problem so the entire plant knows the source of the delay-strong incentive not to be the one causing the problem.

As each aircraft makes its way down the shop floor it passes dozens of carefully delineated workstations, the locations of which are painted on the floor. It also passes hundreds of caster-mounted work kits. In the past, mechanics brought their own tool boxes to work, but no more. Everything a work team needs is immediately at hand and in its correct place-blue kit boxes contain tools; green boxes contain chemicals; gray boxes contain parts.

If anything is missing from a kit when it returns to the kitting area, the kit is put in "jail" until a supervisor or mechanic find the errant tool or part. For more serious problems, mechanics can go to the nearest "barge," a desk manned by employees whose job it is to resolve production problems before there is a stoppage. As soon as an issue is logged, it is displayed on a screen, describing the location and nature of the problem. A yellow light also appears at the desk, indicating that something is going on. If the problem isn't resolved in 30 minutes, that light changes to purple and the moving line stops.

Part of the lean approach to the shop floor, these visual indicators-coupled with the fact that engineering and other support staff are housed in the same building with a huge plate glass widow overlooking the production area-mean that supervisors can see at a glance if all is well.

Loftis notes that the moving line also keeps suppliers-both internal and external-abreast of how things stand. For example, a company supplying circulating fan assemblies will know the point at which its product is attached to the fuselage. If a Boeing manager calls up to say the part is defective or missing, the supplier knows exactly how much time he has to provide a part and ensure he doesn't gum up the works.

"The moving line creates a sense of urgency all the way up the supply chain," says Loftis, describing it as a kind of embodiment of the overall value stream that results in the production of a Boeing 737 aircraft. "Everybody knows where they stand."

"The concept is that when you walk into a Toyota facility... it's easy to tell if things are running well or not," says Herscher. The same is true at the 737 plant at Boeing.

Finally, as each aircraft makes its way down to the final assembly position where the two engines are attached to the wings, it passes a number of feeder lines. In these areas, mechanics perform complicated subassembly work previously performed on or in the aircraft, where they would be subjected to difficult work in often cramped conditions. By doing so, mechanics are not only able to perform the same work in far less time; they are far less susceptible to injury.

For example, in the past, mechanics would spend 8 hours installing interior flight deck components while working within the confines of each 737 cockpit. Today, a mechanic performs 35 minutes of prep work on a feeder line, which cuts the resulting installation time to about 2.5 hours.

Similarly, mechanics used to install more than 900 separate parts of a fuel tube assembly inside the wing, in a space measuring just 14 by 22 inches. Today, most of the assembly is built outside the wing on another feeder line. Although, a mechanic still has to assemble about 140 parts, the overall installation takes 25 percent less time, cutting down substantially on worker wear and tear.

Again, the end result is a clean, well-ordered space suffused with the sense of purposeful activity. This unruffled surface appearance, however, has nothing to do with complacency. On the one hand, it is possible only through hard work and well-thought-out organization. On the other, Boeing continues to refine and improve both its process and products, across the company's many product lines.

"Boeing is organized as a matrix. Not only is each program an experiment, what they learn gets moved around," says Gillette. "We're continually learning...There is no ‘best'way to do something. We're continually doing things better."

Clearly for Boeing, the journey is far from over.