In this report, I reflect upon the challenges that an established firm such as Boeing faces in doing innovative activities, and how it tackles them. As the world’s leading aerospace company, Boeing was one of the largest US exporters in terms of sales, with revenues in excess of $50billion. The rising success of competitor Airbus meant that Boeing was fighting to stay on top.
It wasn’t enough for the company to merely cut costs. Bringing innovation to its business processes was the key to survival. It had to streamline processes while improving quality, becoming nimble while responding quickly to customer demand, and empowering employees while increasing profits.
Boeing pursued two main strategies that helped it retain its share in the market. One was to do Lean Manufacturing and second was opening The Moonshine Shop.
With the adoption of a lean manufacturing culture, the immediate-term measures revealed a newfound “connectedness” between employees and the aircraft, earlier and better problem solving, a higher sense of urgency to improve, and greater satisfaction when planes go out the door. This reduced space occupancy by 40% and made engineers partners, side by side, in the production process. Using space and existing assets more efficiently is significant in helping break down blue-collar and white collar barriers that previously stood in the way of real collaboration.
It allowed Boeing to make superior use of intellectual assets, too. It’s a lesson that many manufacturers may consider. Just-in-time and sub-assembly outsourcing creates a lot of excess manufacturing space. It presents an opportunity to evaluate space differently and consider ways to bring organizations closer to the products they make. A lot happens in smaller, more interactive settings. Conveniently located meeting spaces allow for impromptu discussions while staying focused on the airplane.
The “Moonshine Shop”, a group of savvy creative generalist’s plants, is helping a large industrial company become more innovative. I describe its successes and failures, and the innovations that have helped put in place. The group usually saves equal to a multiple of their own move through process innovation front lines and support staff on the floor.
Lean, a concept that designs, manufactures, delivers and supports products more efficiently and at lower costs — while systematically identifying and eliminating waste — all the way through the product life cycle. It uses a “just-in-time” system that gives internal and external customers what they want, when they want it, and at the lowest possible cost. At its root, Lean is about remaining competitive in a rapidly changing global marketplace.
In order for Boeing to survive as an aerospace leader, continue winning new business across the enterprise, and create and sustain jobs, it constantly must find ways to make its products cost-competitive. In the case of commercial airplanes and Boeing’s ongoing competition with Europe-based Airbus. “The marketplace is demanding lower prices for our products,” said Ross Bogue, Commercial Airplanes vice president of manufacturing, “and costs need to be below price to run a healthy business. Airbus reduces price points to chase market share to provide jobs, technology, a tax base, and all the other values they are responding to in Europe.”
But aerospace companies are taking the lead “on launching into the non-shop floor arena” on Lean, said Deborah Nightingale, co-director of the Lean Aerospace Initiative, a consortium composed of corporations, government, labor unions and the Massachusetts Institute of Technology. Boeing, as well as its major military and space competitors, are Lean Aerospace Initiative members. “We’re finding you really need to look at the enterprise as an integrated system,” she said. “This is where Boeing is really doing some great things.”
“Lean is a race without a finish line,” said Roy Graham III, Lean Implementation manager for Integrated Defense Systems in St. Louis. “Sometimes it’s an all-out sprint; sometimes it’s a marathon. But the goal has to be to positively affect the bottom line.” The implementation of Lean tactics across Boeing isn’t merely a cost-cutting strategy, say company practitioners, but a philosophy of growth. And it’s one that requires a seismic culture shift away from the old ways of designing and manufacturing products, executing business processes — and of managing and developing people.
The Moonshine Shop
The purpose of The Moonshine Shop was ‘to be creative, to solve problems, be creative with solutions’. The best people from all functions were selected to form a team that had to discover new ways to decrease cost and time required to build Boeing jetliners. The obstacles it faced were that it did not receive the respect/trust from other employees. They were given a mission without directions on how to move forward. They couldn’t see how to make money as they were given so much waste and material. But during the downsize of Boeing, Moonshine took over and stimulated revenue growth and market response.
Below is an example of one of the innovations that Moonshine made that changed the history and future of Boeing – Hay Loader on the assembly line- plant engineers struggled immensely with a time-consuming bottleneck in the 757 assembly line: the lifting of the plane’s heavy seats up to its doorway and inside for installation. Once the seats came to the plant, they were fitted with wheels, lifted by an overhead crane to the airplane doorway, unloaded, rolled into the cabin, divested of their wheels and finally installed. The process took 12 hours. Members of Moonshine began looking for a speedier process. But they knew the cranes would have to be replaced by some sort of conveyor system.
So they attended county fairs and studied Ferris wheels. They looked at ski lifts, automated roofing carriers, but nothing quite fit the bill. The team persisted and one member mentioned the hay loaders he often saw on farms near his home. The team began studying hay loaders and finally found a rancher who could develop one to their exact specifications, adding safety guards. Within a few months, every Boeing plane assembly line was using a modified hay loader, and cutting a full 10 hours off seat installation.
Boeing is focused more on process innovation than product/service/outcome innovation as its production system was in serious disarray. Lack of communication, continuity and efficiency led to wastage of time, space and money. It embraced continuous improvement as it borrowed the concept from Japanese lean manufacturing, and it has paid off handsomely for the company. It never stopped striving to make things better, faster and easier. This kind of creativity had direct positive impact on the financial result of Boeing. They need not do product/outcome innovation as their market segment orientation was well identified and market opportunities/needs were met.
However, a company that wants improved ways of designing and producing services or wants to introduce a new/improved product should use product/service innovation. Any kind of innovation would be competitive in respect to its industry, function and competitors. Boeing definitely has critical success factors and several lessons for any company seeking to innovate:
a)Give freedom yet be persistent. Many of the Boeing solutions were achieved after earlier efforts had failed. Many required tinkering and refinement. So company must not stop before the goal is achieved. The intent was to let the moonshine team explore every processing department and then generate ideas to improvise. b)Collaborate to develop teams to address innovation issues. Boeing’s “Moonshine Shop” works full-time to address lean manufacturing productivity concerns. You may not need full-time innovators, but project teams can accomplish similar results with the right guidance.
‘Everybody listens to everybody’ and ideas are out in the open. c)Keeping track of the things that didn’t work. The moonshine shop team made a ‘wall of shame’. So as you go the way, you know exactly what went wrong and then next time not to repeat the mistakes. It saves time, energy, it build knowledge, expands the way one thinks and approaches task. It results in No fear of failure. To try out something, and is it doesn’t work, it can be changed real quickly. As long as it is a controlled failure, failure is good.