Boeing's Big Intranet Bet

Seattle -- Boeing is on the spot. Amid a drastic move to mimic the manufacturing style of mass producers, costs have spiraled out of control and aircraft deliveries have consistently run behind schedule.

Topping the aerospace giant's list of remedies is a series of intranet and extranet applications designed to drive production and logistical information to all corners of the company and out to suppliers and partners, in an effort to keep production humming.

Analysts are skeptical that the Web project alone will help improve The Boeing Co.'s prospects. But company executives are bullish that intranet applications will go a long way toward mending badly fractured supplier relations, which are seen as the genesis of Boeing's problems.

"Everything you've heard about the Web is underhyped," said Terence Milholland, Boeing's chief information officer and vice president of information services.

By its own account, Boeing caused havoc throughout its supply chain when it insisted that suppliers make standard parts for use in different types of aircraft. Too often, pieces from separate suppliers would not fit together, forcing Boeing to retrofit them in the factory--an especially burdensome and costly task when you consider that commercial 747s, 767s and 777s each are made up of 4 million parts.

The commercial aircraft apps give Boeing and parts suppliers full visibility via the Web into the specifications of fuselages, engines, wings, pilot controls, custom interiors and other parts, as well as the production schedules and maintenance histories for every airplane.

One result is better parts compatibility. Participating suppliers are now responsible for making sure that components match up.

"If you look at the suite of applications coming up on our extranet, what you're looking at is the creation of a virtual company," said William Barker, manager of the project, called Boeing Partners Network. "It's not just Boeing entities that now make up the company. Suppliers, customers and partners extend the span of Boeing. They have the same data we have. They see metrics from the same source."

Barker was tapped to head the extranet service bureau after leading the design team for a successful site that sells spare parts to airlines for repair operations. The Boeing Partners Network is accessed by 320 partners today and is expected to connect 5,000 suppliers within 18 months. Ultimately, all of Boeing's 40,000 trading partners are expected to sign on.

Roughly 40 percent of the extranet's users are government entities, an indication of how confident Boeing is in its security infrastructure. Partners are given access rights behind Boeing's firewall for the retrieval of real-time data. Boeing uses reverse proxy servers to authenticate users, control access to specific applications and dynamically generate pages for them.

The extranet data is replicated on three geographically dispersed servers in the United States to ensure availability if a server goes down.

Boeing officials said the company does not centrally collect costs and results metrics for the Web projects, and they would not provide estimates.

Analysts who have followed Boeing travails have their doubts about the project's potential.

David Dobrin, chief business architect at consultancy Benchmarking Partners Inc., said the intranet will help foster upfront collaboration but won't address problems in the factory.

"This is a way of dispensing and preserving the corporate knowledge capital by making it more available," Dobrin said. "I don't think it will solve Boeing's production problems."

Indeed, the company also is positioning the intranet as a knowledge management application to solve the "brain drain" that has resulted from the departure of many top managers. More than 192,000 workers use the Web applications, out of about 236,000 total employees, and 91 percent of all managers use them regularly.

"In the past, the person who had the data had the power," said Chuck Kahler, vice president for wing operations in the company's commercial airplane group. "In the future, with the help of the Internet and intranet, everyone will have the data, and the power will be held by the group. Our vision has everything that has been typed on a keyboard available for others to use."

Nearly 31,000 of the Web users are hourly employees. As a result, Web browsers are appearing virtually everywhere, including crane cockpits and the workstations of workers building nose cones.

"There's no other manufacturing company that I know of that has this type of commitment to Internet connectivity on the factory floor," Dobrin said. "They are trying to give individual workers more information and consistency."

Those 31,000 browsers get a workout. When workers need parts from inventory, they can page internal couriers using the Web. Sensors on heavy equipment provide instant reports on whether they are churning away, require attention or down altogether. Managers also can aggregate that performance data over time for use in negotiations for capital equipment.

The system also addresses shop-floor safety. One application keeps track of injuries and identifies trends so that dangerous conditions can be corrected.

The information gathered by the intranet also is being used to improve worker performance. Kahler's group has deployed an application that lets teams compare performance on a daily basis against other teams in different shifts or at other locations.

Senior management used to share that information on paper, with delays of up to two weeks. By providing the same information on the intranet, workers can be presented in real time with challenges if they fall behind or reinforcement if they are keeping up.

"By having this data readily available, all the people involved can look at it," Kahler said. "It's not going to be me looking at data and expecting people to do better. The idea is to let everybody see how they're doing individually. When you start breaking this down to detailed shop levels, they find out real quickly that some are doing well and some are not doing as well. There's some peer pressure involved. No one wants to be underperforming."

The Web's power to distribute information globally is aiding Boeing's space projects as well. Forty-five separate regulatory agencies in the United States, Canada, Japan, Russia and several European countries use the Boeing intranet to collaborate on the international space station that is set to begin construction in December. Compatibility of parts is especially important on that project because the station will be built in orbit.

Intranet development is distributed to the business units, where applications are tailored to unique problems. It is a new frontier for a company that is known for centralization and bureaucracy.

CIO Milholland explained, "We believe the advantage to us is people who know how to build applications, how to access data, how to talk to customers and how to talk to suppliers through these kinds of applications."

Time will tell whether the Internet can help Boeing pull out of its tailspin.