Guy Norris/LOS ANGELES
IT HAS BEEN A painful period for the Douglas Aircraft (DAC) division of McDonnell Douglas (MDC), but there is fresh optimism in the air, according to the company's newly appointed president, Mike Sears. "Instead of thinking about survival, we're thinking strategically - that's the biggest single change," he says.
Sears, formerly vice-president and general manager of the MDC F-18 fighter programme, took the helm on 8 April and is leading a revival strategy orchestrated by Harry Stonecipher, chief executive of MDC since September 1994. Sears has the tough job of directing the company towards goals established in a new-vision statement. Essentially, this says: "We are trying to be a vibrant, growing, healthy company with the right products for the airlines that are eager to do business with us."
Sears acknowledges that DAC's biggest problem is credibility. To meet the requirements of the mission statement, DAC must convince the world that it has top products, and is here for the long term. DAC's reputation in both areas has taken a beating in recent years, firstly with the MD-11 range, which entered service a year late in 1990 and under-performed until 1995. Secondly, industry confidence in DAC's commitment to the future was shaken by rumours, ranging from merger talks with offshore countries and Boeing, to the imminent closure of the tri-jet line.
DAC's strategy to restore confidence includes a commitment to the launch of the MD-95, a new twinjet to tackle the emerging regional-jet and DC-9 replacement market, which is estimated at around 2,000 aircraft worldwide. The first MD-95 will be flown in the second half of 1998, by which time DAC expects to have several more buyers in addition to launch customer ValuJet. DAC is also determined to capitalise on the hard-won MD-11 improvement programme, and is working hard to promote the more-capable MD-11ER as a lead-in stablemate to at least two re-winged MD-XX derivatives now being studied.
RESTRUCTURE
To achieve what cynics might describe as a "mission impossible", Sears has invoked a major internal re-organisation which is still under way. "We need to have the right internal thinking taking place," he says. "It's not unlike our thinking when we started up the F-18E/F programme. We need to be focused on providing products and services, not just being busy," he adds.
"This is more of a cultural change than a simple wiring-diagram change. We are now thinking of organisations as separate businesses. Manufacturing, for example, is not just a matter of putting aircraft together. The section is expected to reduce the cost of building every aircraft and will have full accountability," explains Sears.
Underpinning the changes at DAC is a comprehensive range of design and technology initiatives, which are being introduced to cut pro- duction costs, improve quality and reduce manufacturing lead times.
Although these began in 1991, when the abortive MD-12 effort stimulated the creation of integrated product development (IPD) principles, IPD general manager Gary Burgess says that most progress has been made since Stonecipher joined the company.
Ironically, the cancellation of the MD-12 could have been a blessing in disguise, believes Burgess, saying: "We didn't launch that aircraft, but we have quietly continued the development of processes like IPD and pursued pilot programmes like the MD-90 pylon fairing and MD-11 auxiliary tanks, to implement it on a limited scale. In my view, it has turned out to be fortunate for us because we have learned so much. We are now better positioned to get ready for the launch of new processes on new products."
A major target of the initiatives is an eight-times reduction, over three years, in the number of costly, last-minute, design changes. "If we were making, say, 80 changes per 1,000 drawings in 1995, we want to reduce that to ten by 1998," explains Burgess."The whole idea is to get to a concurrent design process using state-of-the-art tools and focusing on achieving first-time accuracy of design. If we get the design right the first time by systematically understanding the requirements and flowing them down, then the cost and cycle-time reductions just happen", Burgess says.
One of the key initiatives is the development of a digital pre-assembly tool, or electronic-development fixture (EDF), as it known within DAC. The use of the EDF is a big breakthrough for DAC, as it allows design and development to be integrated and co-ordinated before electronic "build-to" packages, or production drawings, can be released. DAC has watched closely Boeing's successful implementation of similar digital-design techniques on the 777, and is anxious to enjoy similar benefits.
Introducing the EDF on the existing production line has not been so easy for DAC, however, largely because both the MD-90 and MD-11 designs are derived directly from older blueprints. The system must be adapted to vast amounts of "legacy" data, old tooling and traditional manufacturing processes. The company also faces the problems of training the workforce to be comfortable with the use of the EDF.
RELENTLESS PURSUIT
Despite the hurdles, DAC is pursuing the EDF relentlessly, because having the ability to access and share design data from a single database enables IPT teams to work concurrently. If any design issues crop up, they are handled more efficiently and speedily because all members of the team have access to the same data at the same time. Based on Boeing's experience with the 777, and on its own corporate knowledge of digital design techniques on the F-18E/F and T-45A programmes, DAC hopes that the system will yield benefits in quality, time and cost.
The use of the EDF is gradually being expanded on both the MD-90 and MD-11 and will be fully implemented on the MD-95 and MD-XX. Current "EDF zones" on the MD-11 now include the forward, mid and aft cabin, forward and centre cargo compartment, aft bulk-cargo compartment, overwing floor-beam area and No 2 engine-inlet duct. On the MD-90, the use of the EDF has so far been restricted to the instrument-panel area, the forward accessory compartment and the pylon.
The special configuration of MD-11s and MD-90s, specified as part of the large Saudia Arabian Airlines order in 1995, also helped speed up implementation of IPD teams and the EDF. By mid-1995, DAC began to transfer its digital-design database from the previous generation's computer-aided-design wireframe system into a Unigraphics Information Manager (IMAN) system. By the end of 1995, all of the Saudia MD-90/MD-11 projects had been transferred and placed under IMAN control.
CONFIGURATION MANAGEMENT
Another time- and cost-saving initiative which DAC claims is "one step beyond" similar work at Boeing is known as electronic configuration management (ECM). The elements of ECM are being developed in association with consultancy A T Kearney, to provide a seamless electronic interface among all those involved in configuring, defining and managing the outfitting and support of the DAC airliner range.
The latest of these is the configuration, definition and management system (CDMS) which will be completed by mid-July. According to Steve Iverson, business-unit manager of DAC's change-management group, CDMS will shorten the laborious customer-configuration process. It could save "at least two or three weeks with basic configurations, and months with more complex requirements", he says.
The system, masterminded by A T Kearney managing consultant Waseem Sheikh, can be hosted on a lap-top computer and allows the airlines to configure their own designs on-line. Using a menu-driven screen, the customer can choose to view everything about the configuration, from seating and galleys to avionics.
The systems also run "what-if" scenarios to assess the cost, performance and timescale implications of various configurations. Video images are being made of each option, such as a head-up-display in a cockpit, to provide further help when making configuration choices.
CDMS also summarises the effect which customer choices impose on total aircraft weight, as well as calculating automatically the knock-on effect on performance and cost. "A performance button will plot any changes to the position on the range/payload curve. Another will calculate the economic impact in terms of cost per seat," says Iverson.
Another ECM system which tracks and manages buyer-furnished equipment (BFE) has been in use since June 1995. "It ties together information from the stand-alone computer systems of eight different DAC legacy systems that track BFE of one sort or another," says Iverson. "The file server goes out at 3am every morning and extracts all the relevant data to update the system automatically," he adds. Airlines now connect to the system via modem, but DAC plans to have it on the Internet by the end of 1996.
Delta, KLM, Saudia and Trans World Airlines are among customers to have requested access to the system. "It helps spot scheduling problems and assists both us and the customers in reducing lead times. There's about $3 million-worth of BFE on an MD-11, and now the money is being spent later in the process. Formerly, we'd be talking about lead times of 52 weeks for BFE - now we're down to around 36," Iverson says.
The streamlining process corrects serious problems which cropped up between DAC, the airlines and BFE supplier, as hard-copy reports became outdated and were sometimes erroneous. Each MD-11, for example, has up to 325 BFE part numbers from different suppliers, specified by the airline purchasing the aircraft. Each part number must be certified for as many as 25 issues (such as flammability, for example) which must be tracked to the DAC inventory.
ASSEMBLY CHANGES
The order drought and the impending introduction of the MD-90 forced DAC into making fundamental manufacturing changes at Long Beach, California, and elsewhere around its supplier network.
"We had to get the cost out of production," says MD-80/90 production general manager Joe Lombardo. "We had thought to move twinjet-fuselage work out of Long Beach and elected to set up a company in Salt Lake City, Utah." At the same time, DAC took the opportunity to change the fuselage-subassembly design to reduce the amount of structural work and improve efficiency. The traditional "clamshell" sections, which were made at Long Beach and put together to make the MD-80 fuselage, were replaced with barrel sections made in Utah. These sections, for both the -80 and -90 lines, are then shipped to Long Beach.
"Now, the work performed in Long Beach is generally more that of final assembly than subassembly," adds Lombardo. The transition on the line to produce barrel sections took place in March 1995. Structures work, which had previously been performed across the road which bisects the Long Beach site, was also co-located beside the final-assembly line. New pneumatic systems were built into the site so that aircraft could be pressure-tested on the line instead of by the previous method, which involved moving them (and adjacent aircraft) out of the line.
One of the early decisions taken was to integrate the MD-80 and MD-90 lines. "We knew this would force us to reduce the cycle/cost time of the MD-90 earlier than otherwise. To make it work, we had to take the MD-80 cycle time up slightly and bring the MD-90's down to meet it," says Lombardo, who admits that the task was hard and is still problematic. "The biggest problem is crew cycling on different aircraft. That's why it's important to get the -80 and -90 assembly times as close together as possible."
Using process-management and total quality-management initiatives, Lombardo's team plans to meet ambitious targets for 1996 and 1997. By the end of the year, it hopes to reduce assembly costs by almost 26% and cut this by a further 23% by the end of 1997. A cumulative span-time reduction of around 20% has also been targeted for the end of 1997 and the company hopes to achieve a 15% cut in material costs by the same time. "This obviously involves initiatives from suppliers," explains Lombardo.
Overall, the plan calls for labour hours per MD-90 aircraft to be virtually halved from slightly more than 70,000h, while assembly time, now at a little over 90 days, is expected to drop by almost one-third. Production of both types is meanwhile rising to a combined total of one a week, with 26 MD-90s and 12 MD-80s due to be delivered in 1996. The rate is now expected to peak at 1.25 a week, "...although we are protected for a rate of two in terms of long-lead items", says Lombardo. The final-assembly hall has room for a fourth line, along which DAC expects to begin rolling MD-95s within two years. "They may go to a different building when the rate goes up," adds Lombardo.
Similar production targets have been set for the MD-11 line, with assembly costs and labour hours targeted for a 6% cut by the end of 1997. The workers face the additional challenge of integrating fuselage-section subassembly work which was recently brought in-house from the former Convair division of General Dynamics in San Diego. The first Long Beach-built barrels will be delivered on the first Saudia MD-11F.
"We're doing things a little bit differently here," says Missy Weiss, general manager for MD-11 production. "San Diego used to fabricate 90% of new parts, but we have given 26,000 parts to new suppliers. We're trying to focus on what we do best - big structures and final assembly."
A stock of San Diego-made barrels is slowly being used up as Long Beach workers get up to speed on barrel manufacture. The current rate is 0.12 a week, but will rise to 0.25 a week by the end of the year, after which all fuselages joining the assembly line will be built in-house. Each fuselage is made up of five large pieces - forward and aft sections, an "E barrel" or overwing section and the two plugs which differentiate the DC-10 fuselage from that of the MD-11.
Computer-based electronic workstations are being used on the new line for the first time in a pilot project which DAC hopes to employ on the MD-95. The workstations describe each job in words and pictures, to help workers become more familiar with the task.
DAC is also introducing the concept of "self-directed work teams". These are being set up in every area, or "work cell" of the new line, to replace the conventional supervisor-led system. "Our first team will begin training at the end of the month and, a year from now, we hope they will be up to speed," says Weiss. Each team consists of specialists from every discipline, and will work without direct supervision. "The supervisor role will become one of a coach working more up-front and tackling problems," he adds.
Another major initiative which has helped cut production costs is design for assembly (DFA). "This really means designing a product with as few parts as required, making it easier to assemble and fabricate and, ultimately reducing the cost of production," says supplier-management general manager Cindy Corrigan.
The DFA initiative began in 1993 and has become "a way of life", says Corrigan. "There were parts of each design where DFA had an obvious application," she explains. An example of such "low-hanging fruit" includes the MD-11 wing-flap hinge and fairing, which was redesigned to produce lower drag and to save up to 45kg a shipset. Another is the aircraft's main avionics rack, which is now almost 50kg lighter. Manufacturing lead time for the rack is now five days, against the original 23.
A total of 20 DFA projects is in place on the MD-11, with another 40 "in work". To date, 40,000 parts have been eliminated and almost 500kg of weight saved. The MD-80/90 line has six in place, with a further 20 in work.
EXPANDING FAMILY
"We are starting to see a movement in sales on all our products, not just the MD-11," says Peg Billson, vice-president for the MD-80/90 and MD-11. "Now is the time to make everything come together. We've been in a unique position to focus on our processes and production and to manage our costs effectively. Now we can take advantage of that."
This will be a busy year for the MD-90 programme. The aircraft enters service in four new markets - China, Europe, Japan and Taiwan. China Northern is the next new carrier scheduled to take the aircraft, on 31 July. Billson is confident that the delivery will go ahead on time, despite the hold-up to the signing of the licensed manufacturing of MD-90 TrunkLiners in Shanghai, caused by wrangling over China's most-favoured-nation status. "They're acting like it is going to happen, and it's our intent to see it go into service," she says.
The 17 aircraft in service are achieving 98.7% dispatch reliability with Delta Air Lines, Reno and Japan Air System (JAS). Niggling problems with the reliability of the variable-speed constant-frequency generator are being "worked out" and "...we're going for 99% before the end of the year, and we fully believe it is achievable", affirms Billson.
The MD-80 continues to sell and DAC "...will continue to build it as long as it is required". Some 1,133 have been delivered to date, and a further 12 are due to be built in 1996. DAC holds 53 commitments, and is expected to wind up production at around 1,200.
The flagging fortunes of the MD-11 have been bolstered by the development of the 13,240km (7,150nm)-range MD-11ER version, the first of which was delivered to World Airways in April. Some 152 MD-11s had been delivered by the end of the first quarter 1996. DAC holds options and commitments on a further 82. "Baseline" ER versions of the passenger, freighter, combi and convertible freighter are now available with customers opting for specific ER features such as extra fuel tanks.
DAC hopes that the enhanced capability of the ER will be just one of the factors expected to boost tri-jet sales. Others include the continuing popularity of the aircraft as a freighter (accounting for almost one-quarter of the fleet), and the general resurgence of the market. "Customers are more and more interested in the ER," says Billson, who adds that the tri-jet range exceeds that of the Airbus A340-300 and is available well ahead of the similarly capable Boeing 777-200 increased-gross-weight version.
"Any way you look at the MD-95 means growth," says MD-95 vice-president and general manager John Wolf. For the first time, DAC is introducing a new twinjet which will not supersede an existing product. DC-9 production ceased as the market adapted to the MD-80. The MD-90 is now replacing the MD-80 but "...the MD-95 puts us back in the 100-seat market".
Concerns over the viability of ValuJet as a launch customer do not appear to worry Wolf, who says: "I'm not the least bit panicked about it. We're in discussion with over 30 potential customers, compared with a year and a half ago when you could have counted them on one hand." This is "...partly because it's launched and real, and partly because of the collapse of Fokker, but we're seeing this market come back".
Parts for the first MD-95 are in production and final assembly begins around April 1997. A year later, the MD-95 will be flown and, by early 1999, will be certificated. Studies of extended-range versions and a stretched MD-95-50, using an MD-80-type wing, are also under way.
WIDEBODY ARENA
In the widebody arena, the MD-XX, or MD-11LR and Stretch as it was formerly known, combines a new wing with the existing fuselage. As now envisioned, the standard MD-XX will carry 309 passengers in a tri-class arrangement on ultra-long sectors of more than 15,700km, competing with the Airbus A340-8000 and Boeing 777-100X/200X. The stretched MD-XX, around 10m longer than the current MD-11, will accommodate around 375 people on routes of up to 13,300km, effectively entering the Boeing 747 replacement market.
"We think we'll have a mix of MD-11ERs and MD-XXs serving the high-capacity long-range market. It's our desire to create families of aircraft in areas where we compete," says Billson. "Our chief executive has had calls from our major customers to get on with it," she adds.
Operators will get their first opportunity to hear detailed plans for the MD-XX later this week at a briefing in Long Beach. Their reaction will not only be critical to the future of DAC's widebody plans, but will show how successful it has been in convincing the industry that it is here for the long run.
Source: Flight International
