Value Chain Analysis of Boeing: Market Shipment Value at OEM Level to Reach $26.68 Billion by 2016

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.

For a detailed table of contents and pricing information on this timely and insightful report, please contact Lucintel at +1-972-636-5056 or via email at helpdesk@lucintel.com. Lucintel provides cutting-edge decision support services that help you make critical decisions with greater speed, insight, and cost efficiency. To find out more, please visit http://www.lucintel.com.