Boeing boss answers the question: “Why manufacture in Australia?”

Australia is not a cheap place to manufacture, as Boeing Aerostructures Australia managing director John Duddy said in a speech at the recent National Manufacturing Week (NMW) Conference.

This prompted a question from the floor: “Why then, do you continue manufacturing in Australia?"

For Boeing Aerostructures Australia, the answer is in developing specialised capabilities for niche, high value markets.

Boeing Aerostructures Australia (BAA) has invested significantly in Australia over the past few years. In particular, Duddy commented, by developing some of the advanced knowledge required to produce the highly specialised metal composite parts for aircraft including  Boeing’s new 787 Dreamliner plane.

Reflecting technology advances and the priorities of airlines around the world, the Dreamliner is described by Boeing as a (nearly) two-generation jump in technology for the middle of the market.

The Dreamliner uses 20% less fuel than today’s similarly-sized aircraft, offers more cargo capacity and travels at Mach 0.85, similar to today's fastest wide bodies. Passengers are offered greater comfort, with larger windows, more comfortable humidity levels and a pressurisation levels that help decrease jet lag.

Part of the new aircraft’s success is due to the composite materials that make up 50 percent of the primary structure of the 787 including the fuselage and wing.

Boeing Aerostructures Australia has developed both the knowledge and processes to produce this composite metal, especially a resin injecting technique and highly automated processes (utilising robotics first developed for car manufacturing; calibrated to the tight tolerances required for aircraft production).

The Dreamliner – which makes its second visit to Australia when it touches down in Sydney and Melbourne later this month – is in international demand. Boeing Aerostructures has a roadmap in place to ramp up production to 10 planes/month, which will help clear an estimated $1trillion in back orders that will take an estimated seven years to clear.

Despite this enviable position, the company is actively committed to making its processes as lean as possible, in order to remain ahead of the competition curve. Both China and Japan are investigating aircraft production capabilities that, says Duddy, will see the market become increasingly competitive over the next 15 years.

As part of a process that Duddy describes as Lean +, the company has employee teams continuously investigating ways to cut costs or improve processes in production and office functions, and has rationalised its two operating centres down to one highly productive centre at Fishermans Bend in Victoria.

However, said Duddy, while containing costs is one factor, the most important element of BAA’s continued competitive advantage remains its willingness to listen to and respond to customer’s wish-lists; and unique capabilities, such as its Australian operations’ core knowledge of and expertise in the resin injecting process that sets its components apart.

Commenting on the importance of creating differentiation in the market, Mr Duddy concluded that “Whatever product or technology you have that is unique, that is your discriminator”.

National Manufacturing Week wrapped up on Friday 11 May at the Sydney Showground, Sydney Olympic Park.