Boeing 737 – The OM Blog by Heizer, Render, & Munson

OM in the News: The Boeing 737 MAX and Reliability

The troubled (and grounded) Boeing 737 MAX, as widely reported, included a new system (MCAS) that automatically deployed when a single sensor detected the danger of a stall. MCAS strongly pushed the nose of the plane down, and pilots could not successfully countermand the activation unless they turned MCAS off. Astoundingly, writes MIT Prof. Arnold Barnett in OR/MS Today (Oct., 2019), “Boeing told airlines nothing about the existence of MCAS, let alone about the procedure to disable it.” Put bluntly, says Barnett, “MCAS was directly responsible for two fatal crashes, Lion Air Flight 610 in Indonesia and Ethiopian Airlines Flight 302.”

Why did Boeing initially say nothing about MCAS? The dependence on one sensor violates the principle of redundancy, under which no single failure can cause the loss of the aircraft. Boeing argued that redundancy did exist: the pilots (who were not even told of the existence of MCAS) were the backup system that would disable an improperly deployed MCAS.

There were actually 2 angle-of-attack sensors on the MAX, one of which did not affect MCAS. Boeing devised a cockpit warning light that would come on if the 2 sensors gave highly divergent readings. But a production error meant that the light that was supposedly a standard feature of the MAX could never come on, except when the airline customer bought some optional equipment. Boeing discovered the error in 2017 but did not mention it to airlines until after the first MAX crash a year later.

Now Boeing is fixing the problems with MCAS, with 2 sensors. If one detects a dangerous tilt while the other does not, MCAS will not deploy. But what if the erroneous sensor is the one that says things are normal? More prudent is the policy followed by Airbus, which uses 3 sensors and goes with the majority when there is disagreement. “Given that the feature is standard on Airbus planes,” writes Barnett, “it is far from obvious that having 3 sensors is infeasible or prohibitively expensive.”

Classroom discussion questions:

Which formula in Ch. 17 (Maintenance and Reliability) applies to this issue?
What impact on airline scheduling is the MAX grounding having?

OM in the News: Amazon’s Plane Ambitions

Amazon is expanding its domestic air-cargo operation, adding smaller jets to its rented fleet to link its distribution centers and extend the reach of its next-day delivery service. It is aiming to reach the capacity of its free 2-day option, which is available for more than 100 million products. The firm is also experimenting with local collection centers, its own delivery vans, on-demand taxis and even its own employees to speed deliveries to consumers at a lower cost, bringing it into direct competition, in some cases, with companies that also deliver its packages. FedEx recently said that it would end its air-shipping agreement with Amazon to concentrate on rapid delivery for other retailers that are making more sales online.

Amazon is renting another 15 Boeing 737’s converted to carry cargo, in addition to 5 it’s already leasing, alongside a fleet of 40 larger planes it uses to ship packages around the U.S. It expects to have a rented fleet of 70 planes by 2021 as it takes stronger control of its own logistics operations, writes The Wall Street Journal (June 19, 2019). “These new aircraft create additional capacity for Amazon Air, building on the investment in our Prime Free One-Day program,” says Amazon’s VP. Amazon is opening three more air cargo centers this year, in Fort Worth, Texas, Wilmington, Ohio, and Rockford, Ill. A new hub at Cincinnati’s airport that can handle 100 planes is due to open in 2021.

Amazon continues outsourcing its flying rather than start an in-house carrier. The domestic industry is highly regulated and has a history of turbulent labor relations, creating high barriers to entry.

Classroom discussion questions:

How is Amazon taking more control of its logistics operations?
What are the strengths and weaknesses of this approach?

OM in the News: The 737 MAX’s Supply Chain Disruption

The grounding of Boeing’s 737 MAX is pushing some aerospace supply chains into a slow descent. Some suppliers are reconsidering decisions to keep making parts for the plane at full steam, The Wall Street Journal (June 14, 2019) writes, as inventories swell and a timeline for recertifying the plane remains hazy.

The new look at production highlights the tough economics of shifting gears in big supply chains for high-cost manufacturing operations. The grounding of the 737 MAX is stretching into its fourth month. Suppliers have largely kept pumping out parts, betting the grounding would be relatively short-lived. Some even saw it as a chance to catch their breath after years of blistering deadlines. Stopping and restarting production can be more costly and disruptive than keeping assembly lines humming, even at the expense of building inventories, but the calculation is changing as Boeing’s jet remains in limbo.

German seat maker Recaro initially kept production lines going full throttle but now is dialing back as fewer seats are needed in the short term. CFM International, which makes the MAX’s engines, has so far kept producing at its pre-grounding target rate, but is considering slowing that down. CFM also wants to make sure the company can quickly provide technical support to airlines once the MAX is cleared to fly again. Around 500 MAX planes have been idled. Their engines will need some maintenance from CFM before airlines can use them again.

Spirit AeroSystems, which makes the 737 fuselage, is still building 52 of them a month– matching Boeing’s pre-grounding output for the plane. Boeing has since throttled back to 42 planes a month. Boeing pays for the parts on delivery, but Spirit is keeping them at storage sites. The large fuselages are lined up outside the company’s Kansas facility. It is storing wing flaps and pylons, used to mount engines, indoors.

Classroom discussion questions:

What are the OM issues involved in this production slowdown?
What is the role of the engine manufacturer in the MAX shutdown and startup?

OM in the News: Where to Park Scores of Boeing 737s and Other Production Problems

A partial line-up of Boeing 737 MAX aircraft stored at Paine Field, Everett (WA).

Boeing’s decision to reduce the production rate on the 737 MAX was a surprise in timing and scope, reports The Wall Street Journal (April 5, 2019). It came quickly and was steep, cutting production from 52 MAXes per month to 42. The cut comes on the heals that a second software problem was found, delaying submission of the MCAS software upgrade to the FAA for review and approval. This is lightning speed in the plane industry, where changes typically have 12-18 month lead times.

The impact to Boeing is going to be huge and include: (1) Airlines that had the MAXes in service will want compensation for their grounding aircraft; (2) Customers awaiting deliveries that are now deferred will also want compensation; (3) A few airlines threatened to cancel MAX orders; (4) Future sales campaigns could suffer; and (5) With completed 737 MAX planes piling up at its Seattle assembly plant, Boeing has been looking for other storage sites. (Some planes have been moved to its widebody-jet plant north of Seattle).

The move overrides Boeing’s planned increase to 57 a month by this summer. Higher production would have allowed Boeing to make almost 600 deliveries of the 737 this year, 90% of them the MAX model. The production cut will increase pressure on MAX customers ahead of the busy summer travel season. With more than 370 MAX jets already out of service and others remaining undelivered, airlines have already rejiggered their schedules. Southwest, the largest MAX operator at 34 aircraft, is due to receive an additional 31 this year and 30 in 2020.

For suppliers, the impact may be more immediate. Spirit AeroSystems. for example, derives more than 40% of its sales from the 737, but the company said it would continue supplying at the 52-a-month rate to Boeing.

Classroom discussion questions:

How does a slowdown impact the production line (see Ch.9)?
Will this issue be a permanent drain on Boeing?

OM in the News: How a 50-Year-Old Design Came Back to Haunt Boeing

“A set of stairs may have never caused so much trouble in an aircraft,” writes The Los Angeles Times (March 18, 2019). First introduced as a short-hop commuter jet in 1968, the Boeing 737-100 had folding metal stairs attached to the fuselage that passengers climbed to board before airports had jetways. Ground crews hand-lifted luggage into the cargo holds in those days, long before the advent of motorized belt loaders.

A Boeing 737 Max 8 airplane parked in Seattle awaits clearance to be delivered to a client.

That low-to-the-ground design was a plus then, but it has proved to be a constraint that engineers modernizing the 737 have had to work around ever since. The compromises required to push forward a more fuel-efficient version of the plane — with larger engines — led to the controversial flight control software system now under investigation. The crisis comes after 50 years of remarkable success in making the 737 a profitable workhorse. (Boeing has a massive 737 backlog of 4,700 orders).

But the decision to continue modernizing the jet, rather than starting at some point with a clean design, resulted in engineering challenges that created unforeseen risks. “Boeing has to sit down and ask itself how long they can keep updating this airplane,” said a former pilot. Few, if any, complex products designed in the 1960s are still manufactured today. The IBM 360 mainframe computer was put out to pasture decades ago. The Apollo spacecraft is revered history.

Over the years, the FAA has implemented new and tougher design requirements, but a “derivative” gets many of the designs grandfathered in. Still some aspects of the legacy 737 design are vintage headaches, such as the obsolete ground clearance designed to allow a staircase. To handle a longer fuselage and more passengers, Boeing added larger, more powerful engines on the 737 MAX, but that required it to reposition them to maintain ground clearance. As a result, the MAX can sometimes pitch up. Hence the software fix..

The 737 has survived other crises. In a 1988 accident on a Hawaii flight, the entire top of the plane came off. A flight attendant was sucked out and 65 were injured because of faulty lap joints in the aluminum skin of the fuselage, which Boeing reengineered.

Classroom discussion questions:

What are the plusses and minuses of reengineering an older plane model?
Is it possible that this is a training or maintenance problem–not a design one?

OM in the News (with video): Boeing’s 4th Generation 737 Takes Shape

If you’ve ever flown, chances are you’ve ridden on a 737. Boeing’s strategy of product enhancement (Ch.5) has made the 737 the best-selling commercial aircraft in history, with 9,745 built since 1968. The newest version, the 737 Max, which is scheduled to make its debut in 2017, is designed with new engines to burn less fuel than its three predecessors, to help airlines’ costs and leave less of a carbon footprint on the environment.

Before the Max, writes USA Today (April 14-15, 2012), there were three versions of the plane: the Original that took flight in February 1968; the Classics, which began flying passengers in 1984; and the Next Generation, which made its debut in 1998 with new wings and engines that enabled it to go farther and faster while burning less fuel. All represented enhancements in the original concept of a narrow-body jet with the ability to fly medium to long-haul distances. (Here is a great time-lapse 2.5 minute video of a 737 being built for Southwest that you can show in class).

At its most basic, the Max will be the same 737 stalwart the public has come to know. It’s a single-aisle jet that will ferry up to 215 passengers, but with higher efficiency. Outfitted with new engines, the Max will use 10% to 12% less fuel than its most current peer, the Next-Generation. That holds particular appeal for airlines, with jet fuel making up 25% to 40% of their costs, and whose profitability is threatened as the price of crude oil stays around $100 a barrel.

Even with Max, demand remains so high for the 737 that Boeing in January began delivering current model 737s at the unprecedented production pace of 35 a month. It plans to ramp up to 42 a month at the start of 2014 . Will a completely new single-aisle plane will arrive eventually? “It’s something that we’ll definitely do at some point,” says Boeing.

Discussion questions:

1. Why has Boeing chosen product enhancement over a new single aisle plane?

2. How have cell phones been enhanced over the past 2 decades?

OM in the News: Maintenance at Southwest Airlines

Maintenance may not be the most exciting of all the topics we teach in OM (see Ch.17), but when it’s not done right, it certainly is the most critical. Southwest Airlines found this out–and barely dodged a bullet–when a 5-foot hole ripped through the roof of one of its Boeing 737-300 jets on April 1st. The near tragedy occurred at 35,000 feet during a flight from Phoenix to Sacramento. At least 2 people passed out and a few were injured with the explosive incident, which caused a loss of cabin pressure.

According to the FAA, the airline found and fixed 21 cracks in the fuselage of the same plane 11 months ago during a weeklong inspection. (The 15 year-old plane is part of an old fleet of 288 Boeing 737-300s flying at Southwest–out of 931 worldwide). Today’s New York Times (April 4, 2011) reports that Southwest has cancelled 100’s of flights and found identical cracks in two other 737s. “It’s amazing it didn’t rip open further”, says a plane maintenance expert.

Southwest has a history of maintenance problems. In 2008, the FAA set a $10.2 million penalty for the airline’s failure to check for fuselage fatigue cracking. In July, 2009, a football-sized hole blew during a flight over West Virginia. Details of the FAA settlement for improved maintenance are considered proprietary. Southwest plans to phase out the older models over the coming years but would be “putting those aircraft that had ‘no findings’ back into immediate service”.

As we wrote in Ch.17, “Maintenance can improve quality, reduce costs, and win orders. It can also be a matter of life and death”.

Discussion questions:

1. What can Southwest, and other airlines, do to prevent such incidents?

2. Why does finding these cracks cost so much and take so long?

OM in the News: What Should Boeing and Airbus Do?

If you used just one industry and product line to illustrate every aspect of OM in your course, it could easily be Boeing’s 737 and Airbus’ A320. From supply chain to outsourcing to quality/reliability to assembly lines, these competitors provide a plethora of OM examples.

Yesterday’s New York Times raises the topics of time -based competition and product enhancements (see Ch. 5). Boeing’s enhancements of the 737, introduced in 1967, have made the plane the largest selling commercial aircraft in history. Together with the A320, another narrow-body plane, the pair make up 3/4 of the fleets at the major airlines. There are more than 10,000 in service in the US and abroad.

Now the problem: airlines, facing $80/ barrel oil, want better fuel economy—and this hasn’t happened in the 737 and A320 in well over a decade. Airbus leans towards investing $1.5-$2 billion in new fuel-efficient engines–product enhancement. Boeing has announced it will hold off on new engines and instead create a new plane by 2020–product migration.

While dominating the market for commercial planes over the past 20 years, the 2 companies have loved leapfrogging each other with bold advances. But as demand for new planes bounces back from the recession, Boeing and Airbus are hamstrung by OM problems.

Boeing is 3 years late on its most important plane, the 787, made of lightweight carbon composites to slash fuel use. (And a fire on its test flight last week did nothing to help). Airbus is being hammered with the need to fix its superjumbo A380 after an engine blew up on a Qantas flight (see our blog on 11/10/10). And now new competitors from China, Russia, and Canada are entering the narrow body market. The newcomers will soon find that making quality planes is much harder than it might look.

Discussion questions:

1. What are the advantages and disadvantages of enhancement vs. migration for these 2 firms?

2. Why doesn’t Boeing jump right in the make a new jet to replace the 737?

3. What is China’s goal vis-a-vis the commercial jet industry?