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Boeing Aircraft and Missiles
Systems-Southern California is a component of the Boeing
Military Aircraft and Missiles Systems Group. Headquartered
in St. Louis, MO, this division is one of the four major
organizational divisions of The Boeing Company, the world’s
largest aerospace company. The Aircraft and Missiles Systems
division distributes parts to military customers, including
all branches of the U.S. military and foreign countries.
The primary product of this division is the C-17 Globemaster
III, the Air Force’s newest and most versatile cargo
aircraft. With the C-17 aircraft also on order for the
United Kingdom’s Royal Air Force, the company expects
further international sales and a commercial freighter
version in the future.
Boeing Challenge
Delivering 120 C-17’s to the Air Force by the year
2004 is an enormous challenge unto itself. Each C-17 is
179 feet long, 55 feet high and is comprised of over 43,000
part numbers (including subassembly part nos.). With a
two-year lead-time required to fabricate, assemble and
deliver a single C-17 Globemaster III and the need to
reduce costs for more sales, Boeing Aircraft and Missiles
Systems faced significant challenges. The company needed
to support a higher rate of aircraft production while
sustaining the current headcount. In addition, inventory
consolidation goals required the C-17 warehouse to reduce
square footage requirements. Boeing planned to increase
production from 10 to 15 aircraft per year, decrease its
warehouse footprint by 25 percent and allow for inventory
consolidation from other Boeing warehouses, all with the
current staff in place.
Boeing Goals
Following the merger with McDonnell Douglas, the company
underwent an intense scrutiny of all of its business processes.
Facing declining defense procurement budgets, Boeing knew
it was necessary to lower the cost to produce each aircraft
to make them more attractive to purchase.
In an effort to drive down costs and meet their business
commitments, the company planned many improvements, one
of which was a warehouse modernization project to improve
labor and space efficiency, supporting the C-17 production
rate ramp up and overall cost reduction goals.
Receiving parts from over 800 suppliers to build each
$198.3 million aircraft, it was necessary for the company
to streamline its warehousing and manufacturing operations.
The warehouse operations had two major objectives to meet.
They needed to reduce storage space requirements and trim
the time needed to pick parts. To meet these objectives,
planned improvements included upgrading storage and handling
equipment, rearranging stocking locations for more efficient
work flow and purchasing a warehouse management system
(WMS). According to John Horvath, Boeing Project Manager,
“We knew we had to bring in warehouse automation
in order to reach our cost savings and productivity objectives,
it was obvious our manual processes had reached their
limits.”
Catalyst Solution
After a selection process that included 17 WMS suppliers,
Catalyst software was installed as a key part of the warehouse
modernization project. “Catalyst was the only supplier
whose current product had the functionality to support
our business processes and could be easily configured
to meet our needs,” Horvath notes. Catalyst software
integrates the Boeing mainframe host computer to the carousel
system, directs part storage and order picking throughout
the carousel system, directs order consolidation activity
and provides radio frequency (RF) data communications
and bar code scanning throughout the warehouse. The mainframe
computer downloads all parts information to Catalyst for
receiving parts and delivering assembly orders. Mainframe
generated bar code labels identify the approximate 21,000
part numbers stored across 60,000 available carousel locations.
Scanning the label with the RF device turns the parts
record over to WMS which then searches for the best storage
location and manages the part storing process. Assembly
orders are downloaded nightly to WMS for inventory allocation
and subsequent order picking in the carousels. Other functions
managed by Catalyst include order consolidation, packing,
shipping and cycle counting.
Catalyst WMS V7.1 runs on HP UX 10.20 server with an Oracle
RDBMS for the 200,000 square-foot facility in Long Beach,
CA. The software communicates with Intermec radio frequency
equipment and interfaces with 12 Diamond Phoenix horizontal
carousels. These carousels store approximately 60 percent
of the inventory previously stored across the entire warehouse.
The inventory is picked into one of 600 available totes,
all of which are recognized by Catalyst software. The
totes are then transported by conveyor to the order consolidation,
packing, and shipping area.
Boeing’s Return on Investment
The company needed to deliver a 15 percent internal rate
of return on investment within five years for the overall
warehouse modernization project. Storage efficiency and
picking accuracy are two of the critical benefits received
from implementing Catalyst software. Based on the cube
size of parts being stored, Catalyst selects the ‘best
fit’ carousel storage location for maximum storage
efficiency. Also, before automation, many bins stored
multiple part numbers, resulting in increased pick time
and chance for errors. Now, each new receipt is stored
into a unique location allowing better age control and
first-in-first-out inventory management. With the combination
of Catalyst and automated carousels, picking productivity
has improved 5:1, resulting in an increased number of
daily work orders being processed and considerable labor
cost savings. Finally, Boeing realized a savings of over
70,000 square-feet of warehouse space and was able to
consolidate inventory from two other locations. |
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Adobe
Acrobat Reader |
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Installer |
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To properly view the downloadable files
on this page, it is necessary to have a version of Adobe
Acrobat installed onto your computer. If you do not already
have this application, a free version is available for
download above. |
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“Catalyst was the only supplier whose current product
had the functionality to support our business processes and
could be easily configured to meet our needs.”
Boeing Aircraft & Missiles
Systems
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