Do it again

AUCKLAND - One more item to mention from the other side of the world.

A few months back we talked here about the fact that Boeing would be keeping a close eye on the market to see whether we needed to announce a further rate increase for production of the Next-Generation 737.

Today we decided to “do it again,” so to speak. We’re raising the production rate to 38 airplanes per month in the second quarter 2013.

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The 737 line in Renton - ramping up production over the next several years.

The popularity of the Next-Generation 737 and the surging demand for single aisles is continuing - with every sort of airline in every part of the world - and that’s the reason behind our announcement.

This step continues the measured approach we talked about in May, and then again in June.

The approach begins with an increase from the current rate of 31.5 to 35 in early 2012. Then we increase from 35 to 38 per month after a stabilization period of about 15 to 18 months.

Needless to say, the 737 team continues to study how to meet increasing demand - based on airline fleet renewal and growth - so we can provide the airplanes they need sooner rather than later.

Airlines placing orders now will get 737s mid-decade. Of course, our customers have a long planning horizon, which means they’re able to place orders well ahead of their projected need. But as you can imagine, airlines can wait only up to a certain point.

So, the answer to this “dilemma” is to increase our rate so that we keep the backlog manageable.

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The overall plan in the Renton factory includes a combination of capital investments, additional tooling and continued pursuit of Lean improvements by Boeing as well as our suppliers.

The 737 team is at the highest production rates ever and yet managed to introduce the 737 Boeing Sky Interior into the production system this summer. We’ll be delivering that great new interior to five airlines later this year.

Not only that, our Next-Generation 737 customers will gain from a 2% reduction in the airplane’s fuel consumption by early 2012 through a combination of airframe and engine improvements.

Given all they’ve done so far, I can’t think of a better or more capable team than the folks on the 737 Program when it comes to increasing efficiency - and doing it again and again!

Comments (5)

Gopi (Schaumburg, IL):

As per Boeing market outlook, Single Aisle demand is 21,160. If we (Boeing) need to capture atleast 50% of this market segment, we need to deliver 10,580 in 20 years. That means we need to deliver 529 per year (44 per month).
As per airbus, they have plan to increase the production rate up to 40 per month.

I would like boeing to further increase the production rate up to 42 in 2014 and 44 in 2015. This being said, we still need to assess the market condition and fleet growth every year and adjust the production rate accordingly.

By the time we reach 38 in 2013 as per the current plan, 2013 CMO will require us to further increase the production rate beyond 44.

So it will be good to create additional facilities, tools and resources well in advance to cope with the future demand.

Moreover if we show our customers that we can deliver our 737 well in advance, I would expect more orders for 737.

Norman (Long Beach, California, United States):

The innovations made to the 737 has made the plane the best selling airliner in history with a production lifecycle that is paralleled by few other consumer commercial products. The 737s economics, reputation and reliability is what drives the sales of the worlds best selling airliner now more than ever.

Gary (Sydney, NSW, Australia):

Randy,

Excuse my cynicism but this blog article effectively hides today's earlier blog article on the WTO decision. Conspiracy theorists might suggest you were trying to hide the WTO article whilst still being able to claim credit for having blogged it.

Must admit I don't know the time between the posting of the two blog items.

Keep up the good work!

Phil (Wokingham, Berkshire, UK):

A timely increase that will assist in countering EADS's planned monthly single aisle production of forty units from 2012

Residing in Europe you can imagine most single aisles I fly in are Airbus 320 varients, of particular interest to me is that the new 737 interior should offer a quieter cabin similar to the current 320 family.

Patrick McArdle (Boeing Field, Seattle, Washington, USA):

My first assignment at Boeing was supporting the 737NG product line. A key co-worker was an engineer who had spent many years as a machinist on the line in Renton. He would take us newbies out to the factory floor, ranging from the start of the production cycle to the hangar door, showing us how Lean+ production had been implemented, and how well it worked. The clean factory floors, the sense of pride emanating from machinists who built these amazing airplanes quickly, inexpensively, and safely, and the steady stream of complex products coming flawlessly off the line -- all of this really impressed us with the high values of our new employer.

Although I cannot name names, I do know of one very significant potential customer who became a new customer only upon learning of the 737NG's extremely sturdy, low-maintenance construction, and superior operating characteristics. It truly is a product that can help to sell itself -- no disrespect intended to our host here! :-)

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