Thursday, October 23, 2014

787 Mid Month Report - October, 2014

With 10 days left in the month, Boeing seems to be struggling to get production airplanes into the air for testing prior to delivery by the end of this month.  Thus far Boeing has delivered 5 787s this month but I do expect 1 more to deliver by the end of this week.  With those deliveries Boeing will hit 199 deliveries and I believe the 200th delivery will go to Qatar Airways when ZA475 (LN 207, A7-BCP) is delivered to the carrier around October 27.  Boeing is trying to deliver a total of 11 787s this month including a -9 to United Airlines.  Production flight testing seems to have slowed though it's unclear why.There are still a number of aircraft that still need to perform further Boeing and/or customer flights before they're ready for delivery within the next 10 days.

On the production front Boeing has rolled out 8 787s and started final assembly on another 8.  They will end rolling out a total of 11 787s from final assembly this month.  The inventory backlog sitting on the flightlines at Everett and Charleston won't change this month.  The schedules for many 787s deliveries have been pushed to the right.  For example, Avianca's first 787 was supposed to have been delivered in September.  It is now scheduled to be delivered in mid November.  As we move into November Boeing will change the final assembly line slightly in 40-24 (the surge line).  Instead of the 6 positions that are currently in use (0, 1A, 1B, 2, 3, 4), Boeing will go back to 5 positions starting around October 29th. (0, 1, 2, 3, 4).  I believe this is in preparation of winding down the surge activities by 2016 and moving all Everett 787 production to 40-26.

Production is slow and 787 inventory is growing.  While I don't have any concrete information as to why 787 deferred production costs are rising ($25.2bn through the end of the third quarter), I feel that it is undoubtedly due to the traveled work following all these airplanes.  For a 787 to go from the start if final assembly to delivery takes almost 4 months and therein lies the problem for the increase in deferred production costs.  These airplanes, going through the production system at Everett and Charleston, have to spend a lot of time finishing assembly tasks after final assembly is completed.  The promised efficiencies on the final assembly level have yet to materialize but Boeing insists they will start turning profitable on the 787 program in 2015. Part of the increase in production cost is due to the introduction of the 787-9.  These aircraft had to spend time at the EMC undergoing change incorporation as well as finishing traveled work.  As the aircraft is more integrated into the 787 production system and change incorporation is no longer necessary, cost to produce the 787-9 should come down  and should aid the overall reduction of deferred production costs in 2015.

I believe that in order to gauge that is to closely examine the time it takes for Boeing to get a plane from start of final assembly to delivery.  We need to see the aircraft coming out of final assembly without any traveled work.  This means that the 787 goes from the final assembly hall to the paint hangar then directly to the flightline to start production testing.  It also means that Boeing minimizes company and customer test flights which indicates improved build quality.  Currently Boeing has 32 787s (including the the "Terrible Teens" but not including those that are in production) in Everett.  This rising inventory needs to be cleared faster than the current rate which can be tracked on the production Trends spreadsheet.  Simply, Boeing needs to deliver 787s faster than then they are rolling them out at the factory.

787 Full Production Table


agincourt said...

This was just the point i was making on the last page and Charleston seems better at it than Everitt

Kaitian said...

Well the point you're trying to make is very confusing. It gives the impression you're trying to say that Charleston builds airplanes slower than Everett. Yes, they do build airplanes slower at a rate of 3 per month currently.

However Everett has most if not all first 787 airplane customers more so than Charleston does. So the demands from those customers are quite high expectations at first.

However Everett has to deal with working out of the EMC for reworks on their own airplanes including working with terrible teens such as the KAL 11.

agincourt said...

I'll try again. Everitt had 14 planes built yet to fly the other day. Charleston had just two built but yet to fly. i.e. Charleston gets its planes into the air faster after having built them. Is that easier to understand?

Andrew Boydston said...

Uresh you have identified exactly the cost of producing over the goal. Traveled work, insufficient parts and timely progress in workmanship all contribute to the 25 billion dump into the 787 project. Add battery retrofits and problem solving Boeing needs to achieve its production potential by the end of 2014 without any traveled work or temporary work and human resource applications mitigating the 787 production lag. Boeing must and should break its own production issues before 2014 ends.

1coolguy1 said...

The traveled work from Charleston is still occurring and is a significant reason for the slowed production at both plants. As this continues and they are at unit # 200, it would seem to make sense for Boeing to call a spade a spade and have the fuselage sections flown to Everett, have them finished there and send those stuffed units back to Charleston.
Reverse the process and take advantage of the better work force in Everett.