Value Chain Analysis of Boeing 787: 2011-2016, October 2011
Background:
In calendar year 2010, total market shipment value at OEM level for Boeing 787 was US$1.11 billion and market at this level is expected to reach $26.68 billion by 2016 with a CAGR of 166% over the next five years.
Lucintel, a leading global management consulting and market research firm, has analyzed the Boeing 787 value chain and published a comprehensive research report, “Value Chain Analysis of Boeing 787.”
Boeing found itself in the crucial situation of having lost market share to Airbus. Boeing had to act in response by enhancing customer benefits to recapture an advantage over its competitors. The fundamental idea was an innovative renovation in the supply chain process, which would redefine Boeing’s role as a coordinator and integrator rather than simply the manufacturer. At the heart of the supply chain transformation process was the strategy to outsource more than 70% of the 787’s production.
Boeing introduced new project management techniques by sharing risk with partners. The companies sharing risk transformed the entire 787 program. It is the first time in the aerospace industry that the risk at the OEM level is shared by the Tier I suppliers of the company. This has created high economic value for Boeing. The risk shared by partners in investing their own capital in the 787 program cut approximately 55% of Boeing’s development cost required for the program, which is US $6 billion.
Boeing’s outsourcing process has dramatically reduced the manufacturing time from roughly two weeks to as little as three days. Saving such significant time greatly decreases labor and inventory costs for the company as outsourced components reach the assembly site with pre- fitted sub-systems. This approach streamlines and adds efficiencies to the assembly process. This Lucintel research report provides insights regarding the global aerospace industry and Boeing, in addition to a supply chain and value chain analysis of Boeing. The report also addresses market forecast and lessons learned from the 787 project.
This unique report from Lucintel is expected to provide you valuable information, insights and tools needed to identify new growth opportunities and operate your business successfully in this market. This report is estimated to save hundreds of hours of your own personal research time and is likely to significantly benefit you in expanding your business in this market. In today’s stringent economy, you need every advantage that you can find to keep you ahead in your business.
Features of This Report:
To make business, investment, or strategic decisions, you need timely and adequate information. This market report fulfills this core need and is an indispensable reference guide for multi-national material suppliers, product manufacturers, investors, executives, distributors and many more, who are dealing with this market.
Some of the features of “Value Chain Analysis of Boeing 787: 2011-2016”are:
Lucintel’s core competency is in market research and management consulting. In last 12 years, Lucintel has worked on hundreds of market research studies. Lucintel’s market reports offer the following benefits:
This study is intended for material suppliers, parts fabricators, OEMs, investors, executives and consultants. This multi-client market study from Lucintel is used by small to multi-national Fortune 500 companies and utilized for a variety of reasons as follows.
Lucintel has closely tracked and conducted research on composites and other markets since 1998.This research project was designed for the purposes of determining strategy of maximization of profits with reduced exposure, get an insight about supplier selection criteria of the OEM, In-depth study of outsourcing strategy of the OEM; and also trace revenues, product portfolio, JVs and customers of all the OEMs and Tier 1& 2 and Tier 3 players. Value addition done at various structural nodes by different participants of the B787 supply chain This study is a culmination of 7 months of full-time effort performed by Lucintel's analyst team.
Our analysts used the following sources for the creation and completion of this valuable report:
In calendar year 2010, total market shipment value at OEM level for Boeing 787 was US$1.11 billion and market at this level is expected to reach $26.68 billion by 2016 with a CAGR of 166% over the next five years.
Lucintel, a leading global management consulting and market research firm, has analyzed the Boeing 787 value chain and published a comprehensive research report, “Value Chain Analysis of Boeing 787.”
Boeing found itself in the crucial situation of having lost market share to Airbus. Boeing had to act in response by enhancing customer benefits to recapture an advantage over its competitors. The fundamental idea was an innovative renovation in the supply chain process, which would redefine Boeing’s role as a coordinator and integrator rather than simply the manufacturer. At the heart of the supply chain transformation process was the strategy to outsource more than 70% of the 787’s production.
Boeing introduced new project management techniques by sharing risk with partners. The companies sharing risk transformed the entire 787 program. It is the first time in the aerospace industry that the risk at the OEM level is shared by the Tier I suppliers of the company. This has created high economic value for Boeing. The risk shared by partners in investing their own capital in the 787 program cut approximately 55% of Boeing’s development cost required for the program, which is US $6 billion.
Boeing’s outsourcing process has dramatically reduced the manufacturing time from roughly two weeks to as little as three days. Saving such significant time greatly decreases labor and inventory costs for the company as outsourced components reach the assembly site with pre- fitted sub-systems. This approach streamlines and adds efficiencies to the assembly process. This Lucintel research report provides insights regarding the global aerospace industry and Boeing, in addition to a supply chain and value chain analysis of Boeing. The report also addresses market forecast and lessons learned from the 787 project.
This unique report from Lucintel is expected to provide you valuable information, insights and tools needed to identify new growth opportunities and operate your business successfully in this market. This report is estimated to save hundreds of hours of your own personal research time and is likely to significantly benefit you in expanding your business in this market. In today’s stringent economy, you need every advantage that you can find to keep you ahead in your business.
Features of This Report:
To make business, investment, or strategic decisions, you need timely and adequate information. This market report fulfills this core need and is an indispensable reference guide for multi-national material suppliers, product manufacturers, investors, executives, distributors and many more, who are dealing with this market.
Some of the features of “Value Chain Analysis of Boeing 787: 2011-2016”are:
- The Global aerospace industry by region in terms of unit shipment
- Boeing 787 market in terms of ($) value shipment
- Boeing company overview, vision and segments
- Boeing supply chain management
- Value chain and cost analysis of B787
- Market size ($) at various structural levels (Tier II, Tier I, and OEM)
- Market forecast for 2011-2016
Lucintel’s core competency is in market research and management consulting. In last 12 years, Lucintel has worked on hundreds of market research studies. Lucintel’s market reports offer the following benefits:
- It saves your money, as compared to doing research in-house. ($50,000+)
- It saves your time. Lucintel delivers the report in hours vs. months of in-house data collection and report writing.
- It is an un-biased source of industry facts, intelligence and insights.
- It helps you make confident business decisions quickly.
This study is intended for material suppliers, parts fabricators, OEMs, investors, executives and consultants. This multi-client market study from Lucintel is used by small to multi-national Fortune 500 companies and utilized for a variety of reasons as follows.
- Business development
- Strategic planning
- Business presentation
- Determination of market size and trend
- Competitive analysis
- Personnel training
- Budgeting
- Investment Decision
Lucintel has closely tracked and conducted research on composites and other markets since 1998.This research project was designed for the purposes of determining strategy of maximization of profits with reduced exposure, get an insight about supplier selection criteria of the OEM, In-depth study of outsourcing strategy of the OEM; and also trace revenues, product portfolio, JVs and customers of all the OEMs and Tier 1& 2 and Tier 3 players. Value addition done at various structural nodes by different participants of the B787 supply chain This study is a culmination of 7 months of full-time effort performed by Lucintel's analyst team.
Our analysts used the following sources for the creation and completion of this valuable report:
- In-depth research on major Tier I suppliers and risk sharing partners of B787 project
- In-depth secondary research and telephonic interviews with significant supply chain (such as Boeing, Alenia, Spirit, KHI, MHI, FHI, and Triumph etc)
- In-depth secondary research from financial statements and annual reports of the competitors
- Extensive search of current published literature, market and database information including industry news, company press releases, and customer intentions.
- A compilation of the experiences, judgments, and insights of Lucintel's professional network, who have analyzed and tracked the composites marketplace for a decade.
1. EXECUTIVE SUMMARY
2. AEROSPACE INDUSTRY
2.1: The global aerospace industry
2.1.1: Key trends in global aerospace industry
2.2: Boeing company
2.2.1: Company overview
2.2.2: Business vision
2.2.3:Business segments
2.3: Commercial airplane segment
2.4: Boeing 787
2.4.1: B787-fact sheet
2.4.2: Key materials (composites and metals) qualified for B787
2.4.3: Evolution of composites in aerospace industry
2.4.4: Composites in B787
2.4.5: Materials suppliers in B787
3. SUPPLY CHAIN MANAGEMENT
3.1: Supply chain structure of aerospace industry
3.2: Boeing supply chain management—changes over time
3.3: B787–supply chain management
3.4: B787–outsourcing trend
3.5: B787–supplier selection
3.6: B787-structural partners and location
4. VALUE CHAIN ANALYSIS
4.1: Value chain of B787
4.2: Cost analysis of B787
4.3: Competitive analysis of B787
4.4: Market size ($) at various structural levels (Tier II, Tier I, and OEM)
5. MARKET FORECAST FOR 2011-2016
5.1: B787 orders
5.2: B787 production and forecast
5.3: Market size forecast at various structural level-2016
5.4: Composite material and competing materials–2016
6. LESSONS LEARNED ON B787
6.1: Boeing’s lessons learned
6.2: Boeing’s outsourcing decision
2. AEROSPACE INDUSTRY
2.1: The global aerospace industry
2.1.1: Key trends in global aerospace industry
2.2: Boeing company
2.2.1: Company overview
2.2.2: Business vision
2.2.3:Business segments
2.3: Commercial airplane segment
2.4: Boeing 787
2.4.1: B787-fact sheet
2.4.2: Key materials (composites and metals) qualified for B787
2.4.3: Evolution of composites in aerospace industry
2.4.4: Composites in B787
2.4.5: Materials suppliers in B787
3. SUPPLY CHAIN MANAGEMENT
3.1: Supply chain structure of aerospace industry
3.2: Boeing supply chain management—changes over time
3.3: B787–supply chain management
3.4: B787–outsourcing trend
3.5: B787–supplier selection
3.6: B787-structural partners and location
4. VALUE CHAIN ANALYSIS
4.1: Value chain of B787
4.2: Cost analysis of B787
4.3: Competitive analysis of B787
4.4: Market size ($) at various structural levels (Tier II, Tier I, and OEM)
5. MARKET FORECAST FOR 2011-2016
5.1: B787 orders
5.2: B787 production and forecast
5.3: Market size forecast at various structural level-2016
5.4: Composite material and competing materials–2016
6. LESSONS LEARNED ON B787
6.1: Boeing’s lessons learned
6.2: Boeing’s outsourcing decision
LIST OF FIGURES
CHAPTER 1. EXECUTIVE SUMMARY
Figure 1.1 Porter’s Five Forces model for the Tier I supplier for Boeing 787
CHAPTER 2. AEROSPACE INDUSTRY
Figure 2.1: Aerospace industry size (2006–2015)
Figure 2.2: Global aircraft demand (2010–2030)
Figure 2.3: Key trends in the aerospace industry
Figure 2.4: Boeing revenue, backlog, and operating margin, 2006–2010
Figure 2.5: Boeing management model
Figure 2.6: Boeing’s worldwide presence
Figure 2.7: Main characteristics of Boeing 787
Figure 2.8: Materials break down of Boeing 787
Figure 2.9: Use of different materials in Boeing 787
Figure 2.10: Evolution of composites in commercial aircraft
Figure 2.11: Composites wings
Figure 2.12: Composites fuselage fabricated by various global partners
Figure 2.13: Empennage and undercarriage of 787
Figure 2.14: Raw materials flow for 787
CHAPTER 3. SUPPLY CHAIN MANAGEMENT
Figure 3.1: Typical supply chain in the aerospace industry
Figure 3.2: Reforms in supply chain management of Boeing
Figure 3.3: Flow of 787 components across the globe
Figure 3.4: Supply chain of 787
Figure 3.5: Boeing component analysis
Figure 3.6: Outsourcing trend of Boeing
Figure 3.7: Driving factors for outsourcing
Figure 3.8: Boeing registered loss in third quarter 2008 because of strikes
Figure 3.9: Suppliers selected by Boeing for fabrication of 787
Figure 3.10: Structural partners and location of 787 component manufacturers
CHAPTER 4. VALUE CHAIN ANALYSIS
Figure 4.1: Economic value creations of critical activities involved in manufacturing of 787
Figure 4.2: Competitive analysis of 787 against A350 XWB and A380
Figure 4.3: Market size at various structural levels for one 787
Figure 4.4: Market share and gross profit for component groups for one 787
CHAPTER 5. MARKET FORECAST FOR 2011-2016
Figure 5.1: 787 deliveries versus world commercial aircraft deliveries (2011–2016)
Figure 5.2: Market size forecast at various structural levels (2011–2016)
Figure 5.3: Market share forecast for component groups of 787 (2011–2016)
Figure 5.4: Fly vs. Buy – Opportunities to reduce direct material costs (lbs)
Figure 5.5: Fly vs. Buy – Opportunities to reduce direct material costs ($)
Figure 5.6: Fly material forecast (2011–2016)
Figure 5.7: Buy material forecast (2011–2016)
Figure 5.8: Fly material ($) forecast (2011–2016)
Figure 5.9: Buy material ($) forecast (2011–2016)
CHAPTER 6. LESSONS LEARNED ON B787
Figure 6.1: 787 timeline
Figure 6.2: Timeline of 787 delays
Figure 6.3: Pros and cons of outsourcing by Boeing
CHAPTER 1. EXECUTIVE SUMMARY
Figure 1.1 Porter’s Five Forces model for the Tier I supplier for Boeing 787
CHAPTER 2. AEROSPACE INDUSTRY
Figure 2.1: Aerospace industry size (2006–2015)
Figure 2.2: Global aircraft demand (2010–2030)
Figure 2.3: Key trends in the aerospace industry
Figure 2.4: Boeing revenue, backlog, and operating margin, 2006–2010
Figure 2.5: Boeing management model
Figure 2.6: Boeing’s worldwide presence
Figure 2.7: Main characteristics of Boeing 787
Figure 2.8: Materials break down of Boeing 787
Figure 2.9: Use of different materials in Boeing 787
Figure 2.10: Evolution of composites in commercial aircraft
Figure 2.11: Composites wings
Figure 2.12: Composites fuselage fabricated by various global partners
Figure 2.13: Empennage and undercarriage of 787
Figure 2.14: Raw materials flow for 787
CHAPTER 3. SUPPLY CHAIN MANAGEMENT
Figure 3.1: Typical supply chain in the aerospace industry
Figure 3.2: Reforms in supply chain management of Boeing
Figure 3.3: Flow of 787 components across the globe
Figure 3.4: Supply chain of 787
Figure 3.5: Boeing component analysis
Figure 3.6: Outsourcing trend of Boeing
Figure 3.7: Driving factors for outsourcing
Figure 3.8: Boeing registered loss in third quarter 2008 because of strikes
Figure 3.9: Suppliers selected by Boeing for fabrication of 787
Figure 3.10: Structural partners and location of 787 component manufacturers
CHAPTER 4. VALUE CHAIN ANALYSIS
Figure 4.1: Economic value creations of critical activities involved in manufacturing of 787
Figure 4.2: Competitive analysis of 787 against A350 XWB and A380
Figure 4.3: Market size at various structural levels for one 787
Figure 4.4: Market share and gross profit for component groups for one 787
CHAPTER 5. MARKET FORECAST FOR 2011-2016
Figure 5.1: 787 deliveries versus world commercial aircraft deliveries (2011–2016)
Figure 5.2: Market size forecast at various structural levels (2011–2016)
Figure 5.3: Market share forecast for component groups of 787 (2011–2016)
Figure 5.4: Fly vs. Buy – Opportunities to reduce direct material costs (lbs)
Figure 5.5: Fly vs. Buy – Opportunities to reduce direct material costs ($)
Figure 5.6: Fly material forecast (2011–2016)
Figure 5.7: Buy material forecast (2011–2016)
Figure 5.8: Fly material ($) forecast (2011–2016)
Figure 5.9: Buy material ($) forecast (2011–2016)
CHAPTER 6. LESSONS LEARNED ON B787
Figure 6.1: 787 timeline
Figure 6.2: Timeline of 787 delays
Figure 6.3: Pros and cons of outsourcing by Boeing
LIST OF TABLES
Table 1.1 Boeing 787 market parameters and attributes.
Table 2.1: Boeing Company overview
Table 2.2: Boeing BDS subunits products and facilities
Table 2.3: Business segment summary for FY 2010
Table 2.4: Commercial models manufactured by Boeing
Table 2.5: Models of Boeing 787
Table 2.6: Aircraft with considerable use of composite materials
Table 2.7: Wing group mass breakdown
Table 2.8: Detail description of 787 wing group
Table 2.9: Fuselage mass breakdown
Table 2.10: Detail description of 787fuselage group
Table 2.11: Other major 787 parts
Table 2.12: Detail description of 787empennage group and other
Table 2.13: Material used and material suppliers in 787 by structural weight
Table 3.1: Outsourcing trend followed across model for airframe components
Table 3.2: Suppliers and clients of 787
Table 3.3: International team participating in 787developments
Table 4.1: Lifecycle benefits of subscription to Gold Care
Table 5.1: 787order list by various global customers
Table 5.2: Boeing 787 projected deliveries
Table 5.3: Buy-to-fly ratio
Table 5.4: Materials on 787 – average prices
Table 1.1 Boeing 787 market parameters and attributes.
Table 2.1: Boeing Company overview
Table 2.2: Boeing BDS subunits products and facilities
Table 2.3: Business segment summary for FY 2010
Table 2.4: Commercial models manufactured by Boeing
Table 2.5: Models of Boeing 787
Table 2.6: Aircraft with considerable use of composite materials
Table 2.7: Wing group mass breakdown
Table 2.8: Detail description of 787 wing group
Table 2.9: Fuselage mass breakdown
Table 2.10: Detail description of 787fuselage group
Table 2.11: Other major 787 parts
Table 2.12: Detail description of 787empennage group and other
Table 2.13: Material used and material suppliers in 787 by structural weight
Table 3.1: Outsourcing trend followed across model for airframe components
Table 3.2: Suppliers and clients of 787
Table 3.3: International team participating in 787developments
Table 4.1: Lifecycle benefits of subscription to Gold Care
Table 5.1: 787order list by various global customers
Table 5.2: Boeing 787 projected deliveries
Table 5.3: Buy-to-fly ratio
Table 5.4: Materials on 787 – average prices
