Boeing Fastener Crisis

What were the causes of the fastener crisis at Boeing? How was the problem ignored for so long? What could Boeing have done differently to avoid the fastener crisis? 2. What are the key elements of the Fastener Procurement Model (FPM)?

The fastener crisis at Boeing was caused by the ever increasing complexity of its supply chain. As the company began producing the 787 Dreamliner, a production drove much greater demand for parts, especially fasteners. The sheer size and disparity of the supply chain became unwieldy and also extremely reliant on these fasteners. The entire production could be delayed over these relatively small parts.

Boeing’s production became more outsourced, giving the company less direct control on the processes. The number of firms each needing to place small scale orders led to larger demand swings and bullwhip effects. Also, due to the new composite materials being used in the aircraft, the fasteners used needed to be higher quality and often more specialized raw materials. Because of this and Boeing’s increased quality standards, the lead time for fasteners increased between 1 to 2 years. In addition to these issues, macro-economic trends led to increased demand for the same metal raw materials, leading to increased prices and more product scarcity.

Boeing was unable to predict this crisis due to its lack of control over the fastener supply chain. This impeded Boeing’s ability to see the larger trends. It had put in place some measures to hold extra inventory and assist short term demand gaps, but when its suppliers all started accessing this stock, the problem was already too large. As well, the increased lead time meant that the shortage took some years to work its way through the supply chain.

In order to prevent this issue, Boeing should have predicted more of this demand due to their complex design. They were aware of the increased design requirements, but apparently little discussion occurred between