After months of engine and fuselage delivery delays to Boeing’s 737 assembly line, CFM International and Spirit AeroSystems say shipments from a healthier supply chain have improved, boosting confidence in their ability to meet Boeing’s goal of being back on track by year-end.

The General Electric-Safran joint venture, which is the sole source supplier of engines to Boeing for the 737 and a competing supplier with Pratt & Whitney for the Airbus A320, has been struggling to keep up with delivery plans through 2018, despite ramping up production to rates unprecedented in the commercial engine industry. Spirit, which builds the 737 fuselage at its Wichita facility, has suffered growing delays over the year as supplier problems mounted.

Despite extensive preparations for the production engine ramp-up, including investments of more than $1 billion in new capacity by GE and Safran, the CFM Leap assembly system has been dragged back by the slower-than-expected process of bringing on a host of new suppliers to double-source critical parts. “The devil was hiding in the details,” says CFM President and CEO Gael Meheust.

Although engine delays have also hit Airbus, the impact was more acute at Boeing, where delays to deliveries of fuselages, seats and other components compounded the issue. Incomplete aircraft, some without Leap 1B engines, have been stacking up at Boeing’s Renton, Washington, facility as a result. “It’s because we missed load dates in the factory with our engine supply, so that’s on us. We own that piece of the disruption,” says Allen Paxson, executive vice president and general manager of the CFM program.

“We are running a four-week gap. We have to close that gap and hit those load dates. Then we have to feed enough engines to close the gap, which means putting engines on those standing outside, so that’s the task,” he adds.

“We ended up with a lot of suppliers in the learning curve because of that [multisource] strategy, but now we see those suppliers getting aboard and delivering to the rates we need,” Meheust says. He acknowledges the industry-wide supply chain pressures described by Boeing CEO Dennis Muilenburg at the Sept. 12 Morgan Stanley investor conference. “The issue was castings and forgings,” Meheust says. ““The demand was very high, and not only from us but from other OEMs, and there was difficulty in first-time yields and variations. But now we see that situation getting better, and the supply of forgings for the low- and high-pressure turbine discs has improved a lot. That’s why we think we should be able to achieve our commitments.”

CFM is already producing almost 30 engines per week between just the Leap 1A for Airbus and the 1B for Boeing, but Meheust says deliveries will be further stepped up in coming weeks and months. “On Leap 1A, we are delivering 12-14 engines per week, and we want to increase that to 16, which is about the rate that’s required [by Airbus] for next year. We are very close to reaching the stabilized rate of 16 per week, which will allow us to catch up and sustain the planned deliveries.”

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However, for the Leap 1B the challenge “is a little more difficult because we are more in the ramp-up period [because of the later start of the 737 MAX program compared to the A320neo], and also we are sole-source on the MAX,” Meheust says. “Right now we are delivering 14 a week, but we want to raise that to 16, 18 and then 20 by the end of the year. That’s the goal. It’s a big challenge, and it’s not going to be easy. I’m not saying it is a done deal, but I strongly believe we can do it.”

For the moment, CFM admits that it remains 4-6weeks behind its delivery plan to Airbus and Boeing. “It’s pretty much neck-and-neck where we are behind,” Paxson says. “Production output is steadily increasing, but we are chasing an accelerating curve and have not been able to close the gap as fast as we’d like. Over the past few months we’ve stayed on track with the gap but not closed on it.

“Raw material is in the system now, and so we continue to say we will be back on plan by the end of the year with both airframers. We have line of sight into the material in the supply chain to do that. We feel good about that, but quite frankly we recognize it’s a big task,” he adds.

Despite the supply chain issues and the emergence of bottlenecks at some specialty companies such as key casting-makers  Precision Castparts Corp. and Arconic, Paxson rejects the notion that the industry is on the verge of a crisis. “The idea of a meltdown is overblown,” he says. “Yes, we all do tap into the same supply chain, and for suppliers the transformation of new products over the last decade has increased the number of part numbers. I think that’s a big piece of it, but it’s not a meltdown. The industry has put this capacity in place, and we just have to learn to use it.”

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Overall, CFM expects to deliver 2,100 engines in 2018, 10% more than its previous record set last year when 1,900 were shipped. Of the 2018 tally, some 1,100 will be Leap engines, with the balance CFM56-5/7s. Production of Leap engines overtook that of CFM56s for the first time earlier this summer, and with just over 880 CFM56 orders remaining in the backlog, deliveries of this ubiquitous turbofan are expected to slow significantly starting next year. Some production will, however, continue to support the CFM56-7-powered P-8 maritime patrol version of the 737, while spares production is scheduled to continue through 2045.

Spirit AeroSystems CEO and President Tom Gentile told the same investor conference there are a “handful” of major suppliers still working to catch up but that Spirit’s mitigation efforts should alleviate the shortfalls this year. That is down from around 15-20 major suppliers in the spring, when the issues became public. “We dual- or multisource it, or in some cases, in-source it. That gives us the security of supply,” he says. “We’ve done that now [for] over 1,300 parts. It’s been a pretty big effort, but that’s alleviated a lot of the shortages, so we have the parts flowing.”

Gentile attributes a financial forecast revision to recovery efforts lasting longer than expected earlier this year. “We’ve got most of the suppliers delivering and reduced the shortages, but there were still a few that were lingering,” he says. “We have more than 20,000 parts on our 737 fuselage, but one can shut you down. We had a couple—we call them big bones—that were very critical to the production process early on, and so that created a lot of traveled work, which we had to go and do later in the process. It takes longer when you do it later in the process. And so that required more overtime and more contractors.” 

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To help Spirit, Boeing has tapped retirees in Wichita, some with experience transitioning from the classic 737 to the Next Generation (NG) variant. Gentile says they are factory managers, not line workers. In turn, Spirit has squads at certain subcontractors to help them get up to speed.

Both Spirit and Boeing have attributed 737 delivery difficulties this year to a combination of increasing the production rate to 52 aircraft a month from 47 while also transitioning the production lines from the NG to the MAX. The variants are about 35% different in production, according to Gentile. “Switching from the NG to the MAX was a significant challenge. Probably, we underestimated it,” he says.

Ramping up to 57 a month next year should actually be easier, Gentile stresses. For five years up to a couple of years ago, the companies were at rate 42, and Spirit had two production lines that produced just 21 fuselages a month each, or one per work day. “So the workers got very used to it, very accustomed to doing their one-a-day work,” he explains.

“When we go to 57 next year, we’re going to have three lines, but we’re going to produce 19 on each line,” Gentile says. “There’ll be three one-day lines, each producing 19 aircraft a month to get to the 57. So we’ll be more balanced next year than we’ve been in a long time, and that will drive productivity and efficiency. The other thing is, as we get into the back half of this year, we’ve already started hiring for 57.”

As key suppliers begin to recover, Boeing’s Muilenburg says, “we’re confident we have our arms around it.” The company has added about 600 new workers to its 737 production site in recent months, mostly a combination of new hires and workers transferred from Everett and other Boeing facilities. These are expected to stay as Boeing looks to ramp up next year to 57 aircraft produced a month from the current 52. That increase remains on track, he adds.

“What I do see is general supply chain pressure as we are growing rates, and that is a great problem to have,” Muilenburg says.