Way back in June 2007, the Wall Street Journal published an article titled “Boeing’s Nuts-and-Bolts Problem” that highlighted how Boeing was facing a shortage of fasteners at the time to complete its first orders of the 787 Dreamliner.
“The unexpected lack of fasteners marks the sort of test Boeing will face in coming years as it moves to fill a press of orders for the 787 and other aircraft amid an aerospace boom,” the authors wrote.
I highlighted this story in an October 2015 Talking Logistics post titled, “You’re Only As Good As Your Worst Supplier.” The title came from a Wall Street Journal article published at the time about supply issues Pratt & Whitney (a unit of United Technologies) experienced that summer that almost brought its engine production operations to a halt. In the article, United Technologies’ Chief Executive Greg Hayes said the following:
“People always ask, ‘What’s the one thing that keeps you up at night?’ It’s the ramp. The technology, I’m very confident we’ve got that right. But you’re only as good as your worst supplier. When you’ve got 8,000 parts in an engine, if one of those parts isn’t there, you’re not building an engine.”
Fast forward to today and Boeing is back in the headlines experiencing a similar problem (albeit for different reasons). As Sharon Terlep reported in the Wall Street Journal last week (“Boeing Seeks Plan B After Fire Destroys Key Supplier’s Plant”):
A fire tore through an airplane-parts factory last month in suburban Philadelphia, decimating the century-old plant…Equal in size to about 10 football fields, the factory, operated by Berkshire Hathaway, was the sole supplier of some critical fasteners [emphasis mine] used in Boeing planes…Boeing is searching to find alternative suppliers, but replacing the parts isn’t an easy task.
Ah, being dependent on a sole supplier of a critical part. I haven’t heard that one before (wink, wink).
Wasn’t “You must diversify your supply chain across suppliers and geographies” one of the big lessons learned from the Covid pandemic, when many supply chains came to a halt because companies couldn’t import critical components or raw materials from sole suppliers in China?
This Boeing story underscores, yet again, the growing importance of supply chain mapping and risk management. Which components, products, or nodes in your supply chain would take a large bite out of your sales and profits if a disruption occurred? If you can’t immediately answer that question and quantify the potential financial impact, you have serious work to do.
Any bets if there will be another Wall Street Journal in the future about Boeing having another supply issue with a single-sourced part?
