Best Practices -- Piloting Materials Management

Dec. 21, 2004

Boeing believes its approach benefits customers, parts suppliers and itself.

Chicago-based Boeing Co. is off the ground with an improved maintenance materials management approach dubbed Integrated Materials Management (IMM) that it claims reduces operating costs for its commercial airline customers, gives Boeing better information about both one-use and repairable parts at their points of use, and improves the quality of information flowing to parts suppliers, which helps them reduce the costs of managing their supply chains. With this value-added and proven best practice -- it "conservatively" estimates IMM can save an airline 10% to 20% of its maintenance materials costs -- Boeing is adapting a supply-chain management approach from the automotive and electronics industries and introducing it to the aviation industry, where the supply chain historically has been fragmented. "We're trying to de-fragment that supply chain, aggregate it and integrate it to provide better information to both customers and suppliers, and, therefore, to improve performance for all of us," states Joe Brummitt, director of integrated materials management for Boeing Commercial Airplanes in Seattle. The program not so incidentally provides $50.5 billion Boeing with an additional revenue source, data on parts that can be fed back to design and customer service engineers, and, to the extent that it's not matched by such other commercial airplane makers as Airbus SA, a competitive advantage. How does IMM work? In May, Boeing disclosed that it would be managing much of the spare-parts supply chain for Japan Transocean Air. Boeing will be responsible for the purchasing, inventory management and logistics of such single-use parts as bushings, clamps, brackets, retainers, hoses, seals and couplings. Boeing and other suppliers will own the aircraft parts, which will be stored near the airline's operations until they are needed, and the airline will pay for parts as they are used. As of mid-June, four airlines -- Japan Transocean Air, Japan Airlines, KLM Royal Dutch Airlines and Airtran Airways -- were signed up for IMM or the Global Airline Inventory Network system, the 5-year-old legacy program on which IMM is based. In mid-June, Boeing and Texas-based Aviall Services Inc. said they had signed an agreement for Aviall to begin parts support for Japan Airlines on June 21 under IMM. Seventeen other supplier contracts were pending. Key to the success of IMM is getting better information from a part's point of use. "If we can get to that point, we can really improve dramatically the flow of information from where the part is being used -- rather than having to depend on the systems and practices of the airlines to place a purchase order with us as a suppler," says Boeing's Brummitt. "We can . . . transfer that information -- better information, more discrete information -- down the supply chain, and do it in a more rapid and efficient manner." Brummitt relates that some airlines have challenged Boeing, asking why it believes it can do a better job than some other companies and asking why they should trust Boeing. "What we bring to the table to them is really a hard financial analysis that says . . . that we can reduce your costs by X percent," insists Brummitt.

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.