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On January 5th, Alaska Airlines flight 1282 left Portland, Oregon en route to Ontario, California. Just minutes into the flight, the Boeing 737 Max 9 lost a door plug, creating a gaping hole in the side of the aircraft.

Fortunately, all 171 passengers and six crew members were safe, largely because the plane had only reached 16,000 feet, minimizing the amount of cabin decompression that took place. It also helped that no one was sitting in front of the plug, which was put in place to cover a spot that otherwise would have been an extra emergency exit.

Once the shock wore off, the questions began. How did this happen? Whose fault was it? And how can we prevent it from happening again?

The answer to all three questions involves the supply chain: one specific supplier and a model of outsourcing that is common in the aerospace industry.

Boeing’s MAX 9 has come under increased scrutiny because of the January 5th failure, but it is not the only negative press the manufacturer has earned in recent years:

  • After 737 MAX 8 crashes in 2018 and 2019 killed 346 people, a former General Electric executive named David Callahan took over as CEO
  • Unfortunately, Just 5 years later, he finds himself at the helm with his own problems to address
  • He took the January 5th incident seriously, saying,  “This stuff matters. Every detail matters.”

Every Detail Matters

Boeing CEO David Callahan took the January 5th incident seriously, saying, “This stuff matters. Every detail matters.”

The FAA immediately grounded 171 planes in use by Alaska Airlines and United, affecting thousands of flights. Then they began an audit of the MAX 9 production line and that of Boeing’s suppliers, suggesting the possibility of using an independent third party to oversee Boeing’s quality inspections.

That might suggest that the inspection problem involved the FAA, but it doesn’t.

There is a long-standing practice of delegating FAA quality inspections to aircraft manufacturers. Critics say this is because of budget cuts at the FAA, and leaving manufacturers in charge of their own inspections seems like putting the fox in charge of the henhouse.

Part of why this is even able to be considered is because of the overwhelming outsourcing taking place in aerospace manufacturing.

Boeing employs a practice referred to as “atomized manufacturing.” Planes are built in small pieces by different companies, then delivered to a Boeing factory for final assembly. Airbus, the other major aircraft manufacturer, uses a similar approach. In fact, they use many of the same suppliers as Boeing, but have their own approach to quality inspections.

In an article written in March 2004, Chuck Agne, Director of Supplier Management at Boeing’s Integrated Defense Systems business spoke about the use of outsourcing – or “offloading” as Boeing calls it.

At the time, 60-70 percent of Boeing’s plane content was bought from third parties. This leaves Boeing functioning as an integrator rather than a traditional manufacturer. Over time, the company has outsourced more, larger, and increasingly complex assemblies. This, in turn, changed what Boeing needs from their suppliers. “Quality is now a given,” Agne said.

As he explained it, if a supplier has good internal processes and maintains high quality standards, Boeing doesn’t have to spend as much time monitoring their performance. As Agne points out, “source inspections are expensive.” The company’s intent to save money is clear: “…on the whole, our goal is to get out of detail part inspection and to rely on the supplier to do that.”

This adds another level of complexity, given the common practice of the FAA allowing manufacturers like Boeing to inspect their own aircraft. Boeing is putting together assemblies that it allows suppliers to inspect, creating an inspection ‘daisy chain’ where everyone assumes – or hopes – that everyone else is doing the right thing.

Worry from Wichita

One of Boeing’s key suppliers is a large manufacturer in Wichita, Kansas called Spirit AeroSystems.

The company was part of Boeing until 2005 when they were spun off (or “offloaded”). Spirit AeroSystems is the sole supplier of the fuselages used in many of Boeing’s aircraft, and they also made the door plug that popped out and landed in that poor teacher’s yard.

In 2005, former Boeing executive Alan Mulally said that the unit was sold because that way Boeing could focus on final assembly, where they believe they add the most value. But it also created a complicated and somewhat incestuous supply relationship.

Spirit AeroSystems is dependent on Boeing for revenue, and the two companies have battled over quality and costs for years.

One month before the plug fell out, investors filed a Federal Securities lawsuit against Spirit AeroSystems over missed quality expectations.

Former employees at Spirit AeroSystems warned the company’s executives about systemic safety problems and claimed that they were forced to falsify records.

One employee who voiced his concerns about safety and alleged coverups communicated his concerns in writing all the way up to the CEO. Although his manager had threatened to fire him, he was not fired but was demoted. Eventually, he was reinstated with full back pay, but chose to quit several months later. 

Another employee, Joshua Dean, a former Spirit AeroSystems quality auditor, said the company hosted a pizza party for employees to celebrate a drop in the number of defects reported. At the party, everyone reportedly talked about how the defect numbers were down only because people were reporting fewer problems. And everyone knew it.

FAA Administrator Mike Whitaker said that he “sees the MAX 9 problems as a manufacturing issue, not a design problem.” This points the finger squarely at the division of work and responsibility between Boeing and its suppliers.

Cleared for Takeoff

On January 25, the FAA released a process for individual MAX 9s to be approved and returned to service. The inspections will be done by the FAA, not by Boeing or their suppliers.

In addition to better quality work and increased inspections, other suggestions have been made as well. Former FAA safety inspector David Soucie suggested that the plug should have been designed to be installed and removed from the inside of the plane. That way, it literally couldn’t pop out. Chances are, it isn’t already that way because it was designed to be more convenient for maintenance.

Boeing’s share values have been down by as much as 20% since the start of the year. With travelers and airlines both demanding answers and change, the whole system of atomized manufacturing may be called into question.

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