Tag: air planes

OM in the News: Hurricanes, F-22 Fighter Jets, and Chapter 17

We are well aware that Chapter 17, Maintenance and Reliability, is not reached by semester end in many syllabi. But we would suggest that it is an important topic, especially when we consider the terrible impact of Hurricane Michael in Florida 2 weeks ago. About $2 billion in fighter jets were trapped on the ground because of maintenance issues and forced to ride out the Category 4 hurricane.

As many as 17 of Tyndall Air Force base’s 55 F-22s sustained damage or have been destroyed during the storm. (Considering the level of destruction, all of them could be damaged). One F-22 jet costs about $139 million. The aircraft were unable to escape with the rest of the base’s F-22 fleet to Wright Patterson Air Force Base, Ohio. The jets left behind were parked inside hangars as officials hoped for the best.

But why can’t F-22 jet fighters, of all things, escape a storm? Answer: They lack the parts to be operational. “Welcome to a fighting force damaged by bad political decisions and misguided priorities”, writes The Wall Street Journal (Oct. 17, 2018). Of the Air Force’s 186 F-22s, only about 80 are “mission capable,” meaning less than half are flyable at any given time.

Part of the F-22 problem is upkeep on a coating that helps the planes evade radar. Another issue is the supply chain for parts now that the U.S. no longer produces the airplane, and some original manufacturers no longer make the parts or are completely out of business. Air Force officials say that a simple wiring harness requires a 30-week lead time for finding a new contractor and producing the part. Ripping out parts from planes that work, or “cannibalizing,” is now common practice in military aviation.

Classroom discussion questions:

  1. What OM policies could the Air Force implement to deal with this issue?
  2. Which graph in Figure 17.4 provides a better representation of the F-22 costs?

 

OM in the News: Pain in Boeing and Airbus’ Supply Chains

Boeing and Airbus both built more jets last year than ever (763 and 718, respectively), but not enough to ease supply line strain as orders boom. The delivery frenzy has been a boon to both plane makers, lifting profit and share prices. “But it also has strained manufacturing and supply lines around the world,” writes The Wall Street Journal (Jan. 16, 2018).

Airbus and Boeing have already struggled at times to get planes out the door because of a lack of seats, toilet doors, and even engines. Airbus fell short of its target of building at least 200 A320neo planes last year because of lingering engine supply issues. The A320neo is the latest version of Airbus’ best-selling narrowbody jet. It and Boeing’s latest 737s have become the workhorses of both legacy and budget carriers because of their size, fuel savings and versatility. Airbus had 30 planes waiting for engines at year-end, and won’t commit to higher output of the plane until it has monitored supplier reliability for several more months.

Boeing and Airbus ended the year with a combined backlog of 13,129 planes, or 9 years of production at current output levels. To cope, both firms have promised to build even more planes this year—further stretching factories around the world that are already running at full tilt.

Supply chain tightness has spurred supplier consolidation to gain scale and become more financially resilient to afford the investments in production capacity Airbus and Boeing require. United Technologies last year agreed to acquire aircraft equipment maker Rockwell Collins. Rockwell in April closed a $6 billion acquisition of cabin interior specialist B/E Aerospace. French supplier Safran SA is expected to soon close its purchase of seat maker Zodiac Aerospace SA.

Classroom discussion questions:
1. What can Airbus and Boeing do, if anything, to exert better control over suppliers?

2. What do they need to do to reduce the backlog?