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OM in the News: Boeing’s Latest Supply Chain Challenge

July 7, 2014

boeing in riverIt’s not every day that we see Boeing  737 fuselages partially submerged in a river, but as the photo shows, the aircraft were severely damaged when a freight train derailed in Montana on the way to the company’s plants in Washington state. “The derailment threatened to throw a wrench in the tightly choreographed, far-flung aerospace supply chain, which depends on just-in-time deliveries of giant parts by train, plane and boat to meet record demand for jetliners,” writes The Wall Street Journal (July 7, 2014).

The train, which derailed near Rivulet, Mont., was carrying components including complete fuselages of 6 single-aisle 737s, fuselage panels for a long-range 777 and wing parts for a 747 jumbo jet. Most of the damaged parts were manufactured by Spirit Aerospace, in Wichita, Kan., where the shipment originated. They were destined for Boeing’s Renton and Everett assembly lines, which piece together the majority of the company’s commercial aircraft.

Three 737 fuselages tumbled down an embankment, two of which were partly submerged in the Clark Fork River below the tracks. A fourth 737 fuselage was torn apart during the derailment and was resting next to the tracks. Boeing’s jetliner supply chain has been disrupted before. Two years ago a tornado struck Spirit’s Wichita factory, shutting down operations for a week. In 2011, a BNSF train traveling through Nebraska derailed when a tornado knocked cars from the track, damaging a 737 fuselage on board.

Major aircraft makers such as Boeing and Airbus spread their jetliner factories across regions and countries, requiring a finely tuned logistics network to move aircraft components around the world. Both also use cargo ships and specially modified cargo jets to speed the delivery of body, wing and tail sections to assembly lines in sites as far flung as China and Charleston, S.C.

Classroom discussion questions:

1. Why is Boeing shipping fuselages across the country by train?

2. Why doesn’t Boeing make the fuselages itself?

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Andreas Wieland’s supply chain management blog for academics and managers

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