The Signal February 7, 2023

Boeing’s New Customer Driven Supply Chain

As commercial air travel rebounds, Boeing needs to reinvent itself. To do so, the leading global aerospace company has appointed a new SVP of Supply Chain & Fabrication, Ihssane Mounir. Coming from sales and marketing, Mounir brings a mix of customer-centric thinking and operational chops to the Boeing supply chain, paving a path towards transformation. 

Kevin O'Marah Avatar
Kevin O'Marah

Back in December the appointment of Ihssane Mounir as Boeing Commercial Airplanes’ new SVP of Supply Chain & Fabrication caught my eye for one reason: he truly knows the customer.  

Who Better to Reinvent Commercial Aircraft Delivery? 

Although hired as an aerodynamics engineer in 1997, most of Mounir’s Boeing career has been in sales and marketing. This includes not only “stealing the Paris Air Show” in 2019 from rival Airbus with a huge order from British Airways and driving the company’s sales back after the 737MAX crisis, but also helping guide Boeing’s airline customers through the travel rollercoaster of COVID. His success as SVP of Commercial Sales & Marketing for six incredibly tumultuous years proves that he can solve complex problems with a rare combination of customer-centric thinking and operational chops.  

The timing is critical too, as commercial air travel is rebounding strongly, even though travelers’ frustrations are extreme enough to merit a scathing Saturday Night Live skit targeting Southwest Airlines. Boeing needs to reinvent itself, both to keep pace with Airbus who has gained ground in smaller aircraft sales, and, even more importantly, to give airlines the ability to solve their problems with capacity, reliability, and cost. 

Graph depicting worldwide aircraft deliveries by manufacturer. Source: Statista, 2022.

This week’s completion of the last-ever 747 is symbolic, but also telling as consumer aviation finally finishes the shift from Jet Age glamour to everyday service. The transformation reminds me of what Detroit went through when Japanese automakers reinvented the car business around quality, reliability, and process excellence. Less fins and chrome, more standard parts, and easy repairs. The same kind of thing is happening with commercial airplanes, and the customer is once again driving the change from seat 34B backwards through the whole value chain. 

Mounir has seen it all and is being tasked to fix it. 

Optimize for Reliability, Not Cost 

Mounir’s official bio on the Boeing website says he is “responsible for Boeing’s commercial supply chain strategies, deliverables and requirements across all airplane programs to enable increasing stability and predictability in Boeing’s supply chain and factories.” This definition is a perfect response to the problems customers face in the current era of cheap travel and inadequate infrastructure. We get what we pay for, but the airlines take the heat when things go wrong. 

Buying, maintaining, and scheduling a fleet of commercial aircraft is a massive capital investment. Most airlines don’t make much money over time because of the huge, fixed costs, volatile variable costs, and race-to-the-bottom pricing and marginal economics of empty seats. It’s a recipe for chronic financial underperformance. 

Outside of training customers to pay more, the biggest step forward is probably simplifying and standardizing fleets. Boeing, (whose 737 was central to Southwest’s early use of this tactic), under Mounir’s leadership will not only help airlines simplify their fleets, but also streamline their operations. This is possible because of the company’s stated focus on “stability and predictability” in supply chain rather than either reducing costs or aggressive product innovation. 

The downstream effect will be the opposite of what Boeing saw with the Dreamliner. That program ran into delivery problems due to too much outsourced manufacturing which for instance, made it harder to notice a shortage of fasteners that rippled through its supplier tiers and slowed production. Bringing more of this work back in-house and putting it all under the supervision of a leader who knows where supply risks are not worth taking should help airlines plan their operations better. 

What About Digitization? 

One of the hottest trends in supply chain technology is the rise of digital twins which simulate supply chain and manufacturing operations to allow stress-testing in a virtual world before cutting metal in the real world. Aerospace has long been way ahead of other industries in use of high-powered 3D simulation models for product engineering. As this capability expands into supply chains, Boeing (and everyone else) will get dramatically better at predicting operations and therefore meeting promises to customers. 

Looking a few years ahead, the power of digital twins could extend well past the factory to help airlines better manage everything from fuel use and carbon emissions to passenger boarding.  

Mounir has the right stuff to lead this revolution.