Platform for Efficiency: Boeing Defense, Space & Security integrates supply chain processes using Oracle Business Process Management solutions.
by Fred Sandsmark
Like most companies, aerospace giant Boeing has its jargon—words and phrases that uniquely define its products and processes. Take the word platform. It’s used at Boeing to mean a family of aircraft—the F/A-18 fighter, for example, or the 777 jetliner.
But since August 2009, employees in the Global Services & Support (GS&S) division of Boeing Defense, Space & Security have been talking about a different sort of platform: a supply chain technology platform, based on Oracle Business Process Management (Oracle BPM) solutions and Oracle SOA Suite. That platform, built with the assistance of Oracle Diamond Partner Capgemini, is serving as a jumping-off point for Boeing’s GS&S staff to deploy radically improved business processes supported by Oracle Fusion Applications to build a high-visibility, end-to-end supply chain. This business process–driven technology platform has ambitious goals: to help GS&S respond more quickly and accurately to its customers’ needs, to make business processes at all GS&S sites more consistent and less expensive, and to create a foundation for further improvement and efficiency.
Chicago, Illinois–based Boeing is a designer and manufacturer of aircraft. GS&S is Boeing’s aftermarket division, where defense and government customers may go for additional parts, accessories, or services to support Boeing products and in some cases non-Boeing products they’ve already purchased. Before about 1995, GS&S was a relatively low-flying part of the US$68.7 billion company, administering warranties and supplying spare parts while Boeing customers ran their own service operations.
The Oracle Fusion Applications architecture lets us use the systems that already exist in our current environment. . . . It doesn’t require a wholesale rip and replace.
But today, GS&S offers a full spectrum of support tailored to customer needs, from providing parts to managing entire supply chains for customers. From 2007 to 2012, GS&S revenues have grown from just under US$6 billion to nearly US$9 billion. The aftermarket, once an afterthought—albeit a vital one—has become a strategic growth business for Boeing.
“The growth that we were experiencing in GS&S meant that the volume and the velocity of the business was outpacing our ability to keep up with it from a process and IT standpoint,” explains Tim Murnin, director of supply support at Boeing’s GS&S. “In airplane production, you know your schedule several years out. But in the aftermarket, the volume is much more unpredictable. We needed processes and systems agile enough to respond to that volatility.”
One factor in that volatility was the platforms themselves: aircraft today have longer life spans, and remain in production longer than ever before. That increases the importance and value of spare parts and maintenance—indeed, some planes initially designed decades ago are still in service today.
Meanwhile, ongoing international conflicts have put Boeing’s warplanes into hard use, often in physically hostile environments such as deserts. Also, aftermarket customers today—military and commercial—have options other than Boeing for parts and service.
The age and variety of supply chain applications in GS&S compounded these challenges. Business departments such as finance and procurement had their own siloed systems, as did various GS&S locations. (Although GS&S operates at hundreds of sites worldwide, supply chain operations are centered at four sites: St. Louis, Missouri; Southern California; Mesa, Arizona; and Philadelphia, Pennsylvania.) Those business systems included mainframe and Web-based applications from a variety of suppliers, as well as homegrown systems.
Murnin and the rest of the GS&S team needed an end-to-end supply chain solution that could integrate these many legacy applications; standardize supply chain processes; and provide visibility into inventory levels, proposals, and orders across GS&S. In June 2008, Murnin received leadership approval and budget for a project, dubbed Integrated Material and Information Management (IMIM), to do just that.
It’s a real game-changer for us. Employees are applying more of their expertise to the process, and to solving problems.
The IMIM program began with a GS&S team studying existing business processes.
The business process review took four months, and the succeeding effort to design a new, integrated business process took more than a year. The primary objective, Murnin says, was to establish a true end-to-end process. “Not a procurement process or a contracts process,” he explains, “but an integrated supply chain business process that would enable and drive IMIM.”
“A real focus of this project has been taking the expertise of our users and translating it into a set of automated business rules that can be applied to orders and proposals,” adds Dale Robinson, business project manager for IMIM at Boeing’s GS&S.
The new process, and the technology to support it, needed to incorporate Boeing’s high internal standards. “Security is a really big deal for us as a defense contractor,” says Aaron Kelley, IT manager in GS&S. Very strong role-based security at all levels of the architecture was critical, as was global scalability of the system.
All of these factors led the IMIM team to Oracle BPM solutions and Oracle SOA Suite. “We wanted Oracle BPM to provide that integrated business process layer across 16 or 18 functionally oriented systems—a contracts system, a procurement system, a support system, and so on,” Murnin says. “And Oracle SOA Suite, with Web services that can be reused no matter what the application is, is the technical backbone behind what we’re doing.”
The IMIM team wanted to quickly establish momentum once Oracle was selected, so they rolled out a new proposal management process, created in Oracle BPM solutions, at the St. Louis site in August 2009. The IMIM team also spent time on user training and standardizing job roles from site to site. “We conveyed the fact that this was a real project, and not just a marketing slogan,” Murnin says. “Their jobs and their systems were going to change.” And change they did, for the better: internal labor costs to prepare a proposal dropped 38 percent from 2010 to 2012.
But the team knew that outside resources would be necessary to take IMIM to greater heights. “At the end of the day, this project would affect 800 to 1,000 employees, and you can’t lead that sort of change by making speeches at staff meetings,” Murnin says. “We needed a change management strategy.”
So in early 2010, the IMIM team hired Capgemini to help. At first the Capgemini team’s task was narrow: evaluate the overall IMIM technology platform chosen by the internal team, finalize the proposal management portion of the system, and recommend overall direction going forward. But over the longer term, Capgemini would be asked to spearhead the change management efforts. “We really needed a partner that would bring a creative approach, but also was able to relate to the Boeing culture,” Murnin says.
Capgemini Vice President Jim Sourges says he and his team were charged with “harmonizing everything under a ‘one Boeing’ theme, helping people to operate similarly at different GS&S sites and to be more responsive to clients.” Capgemini’s Accelerated Solutions Environment was key to that effort (see “Tools for Change”).
Around that same time, several Oracle Fusion Applications became available that could help GS&S jump-start its transformation. Murnin says the Boeing team decided that rather than developing everything from scratch using Oracle BPM solutions, they would leverage the processes embedded in Oracle Fusion Applications moving forward. Additionally, Boeing’s open, standards-based architecture supported the IMIM plan to use existing applications whenever possible.
“The Oracle Fusion Applications architecture lets us use the systems that already exist in our current environment, and layer the new applications on top,” Murnin says. “It doesn’t require a wholesale rip and replace, and it doesn’t require a thick financial shell around the applications like other solutions do.” Such a shell, he says, would create data ownership and integrity challenges. Instead, the Oracle Fusion Applications architecture enhances the process visibility and process management capabilities of legacy applications.
The first Oracle Fusion Application, Oracle Fusion Product Hub, began rolling out in May 2012. Oracle Fusion Distributed Order Orchestration will follow later this year. Oracle BPM solutions, meanwhile, are being used to fill gaps in Oracle Fusion Applications. “We’re not taking a phased approach where we release Step 1, then Step 2, then Step 3,” explains Robinson. Instead, end-to-end business process and the attributes common to every order are organizing principles, which enables automation of routine orders.
Under the old system, every proposal and every order was reviewed manually, and employees spent much of their time dealing with late orders. The new system proactively identifies orders at risk of going off schedule and moves them to the top of the priority list. “It’s a real game-changer for us,” Robinson says. “Employees are applying more of their expertise to the process, and to solving problems, versus clerical activities.” Even as jobs and responsibilities changed, 90 percent of the underlying legacy applications remained in operation.
Robinson adds that expanding the Oracle solutions’ scope is easier because GS&S began with end-to-end processes. Take orders as an example: once a process is built for one order type, additional rules or requirements can be built to expand that process to include other order types. “We keep building on that initial end-to-end process until we have all of our order types covered,” Robinson says.
As it grows, IMIM will provide unified visibility into inventories across all GS&S sites and a common master record for parts. (Although aircraft platforms are uniquely configured for their customers, 70 to 80 percent of parts in a given platform are common from plane to plane.) By integrating inventory data from all GS&S sites, a single source of inventory truth will emerge, enabling better inventory management and responsiveness.
Better inventory visibility will improve data quality and integrity across GS&S, which promises to further reduce cycle times and data errors. Indeed, these improvements are already arriving. For example, the Oracle BPM solutions–based proposal management tool, initially deployed in St. Louis in late 2009, was extended to three more sites in the first quarter of 2011 and continues to be improved.
“We’ve seen great metrics as far as reduction in proposal-writing cycle times, and we’re starting to see cycle times at all sites converging,” Robinson says. “It’s a real indication that everyone’s following the same process and working in the same tool.”
That is to say, on one platform.
Fred Sandsmark is a regular contributor to Profit.