Boeing boss voices concerns over supplier capability

29 July 2010

29 July 2010 | Lindsay Clark

Supply chain capacity is a “key question” for Boeing’s ability to boost output, according to the plane manufacturer’s chief.

As demand for Boeing aircraft revives after the end of the recession, James McNerney, chief executive, said that the firm had more visibility of its market beyond 2012 than it did of its supply capacity.

“We have better clarity on the market than we do on the supply chain's capability to go higher than they've already committed,” he said during a conference call following the company’s financial results.

Boeing said in May that it planned to increase monthly production of its 737 aircraft from 31.5 to 34 in early 2012.

But this has now increased. On the call, McNerney said the aerospace giant would be producing 35 of the 737s per month, beginning in early 2012. Beyond that, the firm would be increasing production further, he said, but supply capacity was “the key question” in achieving this. This would mean, “making sure … that we have properly facilitized [sic] suppliers with the right manning and capability and material commitments to get there”.

“There are some suppliers that would have to make investments in plant and equipment to meet significantly higher rates. There are others who would need some additional training. There are others with whom we'd have to come up with a new business deal,” he said.

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