Division:
§ Current Commercial Revenue: $30,000,000,000
Product:
§ 300 seat duel aisle, twin engine, wide bodied aircraft – 190 ft long, wing span 180 ft
Factory (Seattle):
§ 100,000 sq ft production space and parts storage
§ 10,000 sq ft administrative space
Current Seattle Workforce:
§ 1,000 – Production (800 union, 200 industrial, mechanical, stress engineers)
o Production employees are paid on average $25 per hour
§ 200 – Management (design engineering, purchasing, quality, finance, R&D)
o Managers are paid on average $100,000 per year
§ Shifts:
o 1st shift - 600 workers, 110 management, 150 engineers (at capacity)
o 2nd shift - 200 workers, 90 management, 50 engineers
Factory (Charleston)
§ 40,000 sq ft production space and parts storage
§ 4,000 sq ft administrative space
The information provided herein was created for the sole purpose of this case study. It does not contain data relating to any of
The Boeing Company’s products.
Current Charleston Workforce
§ 425 – Production (375 union, 50 industrial, mechanical, stress engineers)
o Production employees are paid on average $15 per hour
§ 50 – Management (design engineering, purchasing, quality, finance, R&D)
o Managers are paid on average $76,000 per year
§ Shifts:
o 1st shift - 375 workers, 50 management, 50 engineers (at capacity)
Suppliers:
§ 250 - 20 suppliers represent 60% of $ purchased
§ 200 North American
§ 30 Euro Zone
§ 20 Asia
§ (80%) of the assembly work is completed by Boeing; remainder is outsourced
• Outsourced Assemblies: Main Cabin Access Doors, Landing Gear Doors
• Outsourced Sub-assemblies: Wing Leading Edges, Flaps, Ailerons and Tail Rudder
• Boeing is considering additional outsourcing opportunities for non-core competencies
§ Core competencies include: fuselage, avionics, and software integration
§ Current Lead Time: 15 months
Inventory:
§ Average Inventory level: $25M (Inventory stored on site)
§ Inventory Turns: 3X per year
§ Carrying Costs: $50/sq. foot
Fully Burdened Wrap rate:
§ $108/hour
o $25 production workers
o $20 fringe benefits
o $15 overhead expenses
o $48 for salaried employee/management support