Boeing Defense has blamed delays in delivering F-15EX fighters to the USAF, on a “razor’s edge” supply chain. But Boeing’s
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Last week, Boeing Defense’ director of F-15 business development, Rob Novotny, acknowledged delays in the delivery the first of Lot 1B Eagle II which was initially slated to have been handed over to the Air Force in December 2022.
“In short, we missed our mark,” Novotny told Defense News. “The government knows when they thought they were going to get them and how hard we’re working to get it to them, and they know that we’ve been late. Those conversations are never fun.”
A Government Accountability Office (GAO) weapons system assessment report issued earlier this year noted that Boeing revised its expected date for delivering the third F-15EX (EX3) to July 2023, with EX4 expected to follow in August. The slip to the end of November represents yet another delay, one the GAO explained as hinging on faulty forward fuselage assemblies.
The assemblies were incorrectly made due to early problems associated with a shift in Boeing’s manufacturing process. A new digital-manufacturing approach called full-size determinant assembly, was the culprit Novotny said. Intended to leverage virtual 3D drawings and the automated drilling of holes in components, the process tripped over inadequate tooling and measurement calculations based on assumptions made by Boeing engineers.
As a result, Novotony said, “We kind of blew through some of our timelines on the manufacturing process.”
He also laid blame for the delays on broader supply chain issues. “The supply chain realities of today’s world are running on a razor’s edge and our defense-industrial base has been running on a razor’s edge,” Novotny affirmed.
“When I aggregate the entirety of a supply chain over a two or three-year period to build an F-15, mild perturbations can have significant ripples two years down the line.”
Sub-optimal supply chain realities are a problem throughout manufacturing Aerodynamic Advisory director and analyst, Richard Aboulafia agrees. But he makes a distinction between the supply chain writ large and how manufacturers deal with it.
“There’s the supply chain problem which is a general problem and then there’s supply chain management which is the Prime’s problem,” he explained in a phone interview.
Aboulafia notes that Boeing’s supply chain management oversight has changed significantly over the last decade or so as it focused on short-term profitability and outsourcing production elements (components, materials, services, etc) to suppliers.
As it did so, it shifted a large measure of the responsibility for “on-time” delivery of components produced to exacting specifications to its second and third-tier suppliers.
Essentially, the company outsourced supply chain management to its vendors, expecting them to manage their own logistics, quality control, schedule ramps and supply chain-interruption risk, from trade and technology headwinds to the Pandemic.
“It’s essentially throwing all responsibility downward and hoping it all works out,” Aboulafia asserts. “A lot of that is coming back to bite them now.”
The shift away from the vertical integration historically central to Boeing and its McDonnell-Douglas predecessor was exemplified by company initiatives like Boeing’s Partnering For Success (PFS) 1.0 and 2.0 programs. Such master contract agreements with major commercial aerospace suppliers solidified price reductions and other benefits to Boeing in the latter half of the last decade.
With PFS and other earlier moves, Boeing spun a number of its manufacturing operations out of its St. Louis facilities. Among them was the production of major structural components and assemblies for the F-15 which it outsourced to UK-headquartered GKN Aerospace as far back as 2001.
In 2020, Boeing signed a strategic agreement with GKN that continued its longstanding working partnership through 2023. (GKN Aerospace operates 16 manufacturing sites across the United States and Mexico.)
That partnership has recently become strained. GKN’s plans to lay off 700 workers and shutter a facility which provides parts for the F-15 line (and other aircraft) may be additional factors in the F-15EX production delays.
A Boeing lawsuit, launched in late 2022, blames the planned closure of the facility on GKN Aerospace’s owner, a UK investment company called Melrose Industries PLC which acquired GKN in 2018. A former turnaround specialist of distressed firms, Melrose now characterizes itself as a pure-play aerospace group.
Boeing alleges that Melrose failed to adequately capitalize GKN Aerospace, rendering it insolvent. It also alleges breaches of contracts that “threaten to leave Boeing without the only supplier of certain parts needed to fulfill its own defense contracts,” according to the St. Louis Business Journal.
The facility in nearby Hazelwood, Missouri is slated to close some time in the next several months though the exact timing is unclear. The facility produces components for both the F-15E/EX and Boeing’s F/A-18 Super Hornet.
I sent several questions to Boeing Defense regarding the impact of its proceedings with GKN Aerospace and the Hazelwood facility on delays in F-15EX deliveries. I likewise asked for Boeing Defense’ thoughts on whether its production outsourcing strategy has contributed to delays in the EX and other aircraft programs.
No response was forthcoming by publication time.
Richard Aboulafia accepts Boeing’s explanation regarding delays stemming from its introduction of the full-size determinant assembly process and points to similar challenges in moving to digital engineering architectures which have affected programs like Boeing’s T-7 advanced trainer.
“I’d be surprised if there weren’t some hiccups along the road,” Aboulafia said. “The transition from analogue to digital [design or production] can trip you up.”
But changes made in the way Boeing does business over the last two decades have had an effect as well. As in other business sectors, a focus on maximizing short-term returns has produced long-term consequences.
“[Boeing] is incentivized to generate quarterly returns. Accepting a longer-term view is very difficult for them,” Aboulafia observes.
That has led, he says, to a problematic pass for DoD and the U.S. Air Force whose future aircraft programs (NGAD, CCAs) rest on a very narrow set of options.
“They’re in this tough position where they can either hand a monopoly to Lockheed Martin
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