Monarch Airlines cancels entire 787 order

[mutley 4,487]

UK holiday carrier Monarch Airlines has emerged as the latest customer to cancel its Boeing 787 order, confirming it was the carrier behind last week's axing of six aircraft from the twinjet's backlog.

The company said it has "reassessed its decision" to purchase the aircraft, following plans disclosed in June to concentrate on reinforcing its scheduled short-haul operations.

But it added that the cancellation "does not affect" the plan by its maintenance arm, Monarch Aircraft Engineering, to support the 787. "Further consideration will be given to developing and strengthening long-haul options in the future."

Monarch, which revealed its plan to acquire the Rolls-Royce Trent-powered 787s in 2006, had originally intended to take delivery from 2010. But it recently said that delays to the programme had pushed their introduction back to around 2014.

Its order cancellation brings the number of 787s in the firm backlog down to 821.

[Andrew Godden 934]

And Boeing had the audacity to deride the now, insignificant delays Airbus had with the A380. Oh, and have they confirmed it will meet the projected fuel savings targets. There's a performance penalty clause that would be sitting in any contract I would negotiate...

I understand that Boeing are now hiring anyone who has had procurement and logistics experience in the automotive industry, so they can get the "just in time" (JIT) logistics model working on the production line - hmmm, a bit late after the "bird has flown the coup" - but, better late than never.

Cheers

Andrew

[allardjd 1,853]

Just In Time does nothing to enhace on-time-delivery of the finished product. It's a cost savings measure and in fact puts large, low volume products like airliners more at risk for more schedule delays, not less. It's less problematic for higher volume, lower value, shorter lead time products like automobiles.

 

The savings inherent in JIT arise from forcing your own warehousing costs (including taxes on inventory) as low as possible and requiring the vendors to deliver the parts virtually just as they are needed. The prime contractor doesn't much care if the vendor builds the part months ahead and stores it, or produces it just in tme - all he cares is that it arrives at his door just as he needs it.

 

It's manufacturing brinksmanship and the risks are quite real. The ultimate goal, probaby not quite practical in all cases, is to have parts go direct from Shipping/Receiving to the assembly area without being warehoused first and thus handled twice - cataloged and counted, transported and stored internally, protected for however long, inventoried, taxed, retrieved and transported again. It's a nightmare for suppliers and requires a huge planning effort by the prime to assure that the vendors know, with adequate lead times to build and ship the parts, what is needed and just when it is needed. You can imagine the ripple effect if a single critical part arrives late. Every part needed subsequent to that must also have its schedule set back or it's no longer Just In Time.

 

The other name for it, perhaps more accurate, is Just Too Late.

 

Whatever Boeing is doing with JIT, it doesn't seem likely that it's got anything positve to do with 787 delivery schedules. It's all about cost - nothing more.

 

John

[Andrew Godden 934]

John,

Agree completely and my fault for my post not clearly differentiating the two points, the derision of Airbus and hiring, as being mutually exclusive.

I wasn't trying to suggest JIT as the cause of, nor the panacea to Boeing's 787 delay issues, which became more complex as the program progressed. However, if I recall correctly, not having adequately addressed the supply chain / JIT requirements from the start resulted in initial delays for the want of somethng as simple as fasteners. In a similar vein, Rolls Royce have been notoriously bad at after market support for OEM parts due to a lack of adequate inventory inscaling in support of major sales.

Cheers

Andrew

[allardjd 1,853]

Boeing has had some serious problems with suppliers and it began long before the 787. I certainly don't think they have them solved and their increased dependance on others for parts and even whole airframe components for the 787 makes them even more vulnerable. Besides the vagaries of the vendors themselves there are transport accidents and delays to muck up the works.

 

They'll make it work, to some extent. JIT may be a desirable or necessary thing to do from a cost perspective, but stands to increase the probability of being further affected by poor vendor performance or by their own inability to manage the very complex details of making JIT work effectively - it's not an easy thing to do well.

 

There's plenty to deride the Busboys for too, including schedules and over-promising on delivery dates and performance. I sometimes think businessmen are becoming more and more like politicians, promising anything to book the orders, then giving the customers whatever they can manage to get out the shop door at whatever time they can manage it. They even seem to be emulating the politicians "negative campaigning" tactics these days, swiping at one another in the press whenever they can manage it.

 

John

[hurricanemk1c 195]

I suppose, in the overall scheme of things, this order cancellation is minor, what with the 787 finally reciving certification and still 800-odd orders on the books

But it is a blow - would have liked to see the 787 in Monarch colours!