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Boeing’s New Material Service Leader Targets Reduced Lead Times

Lynne Hopper brings data analytics, customer support and mechanical engineering backgrounds to Boeing’s Material Service organization

Boeing’s material services organization has a new leader who has ambitious plans to price parts more competitively, reduce lead times and align more closely with customer service requirements.

Lynne Hopper, who is responsible for Boeing’s parts solutions portfolio, recently was promoted to vice president-material services from vice president-customer support. In her former role, she colocated customer support functions—such as engineering, parts, contracts, structures and aircraft on ground—to a new facility in Seal Beach, California, in 2015, where they could better collaborate to support customer needs. A warehouse-size room was outfitted with big monitors hanging in a circle so that everyone could see the fleet and return the aircraft to service. 

She plans to use a similar structure for Boeing’s parts organization, to ensure the right parts are at the right places—and sold for the right price.

“We are looking at pricing really closely; we want to make sure we are pricing competitively,” says Hopper. Her organization is using publicly available information and Boeing analytics to evaluate prices and ensure market-based pricing. “In the old days, we would have done ‘cost plus,’ but we realize that is not realistic. We are trying to be smarter about how we price spares so we are there for our customers,” she says.

“We’re also looking at inventory buys—bringing in additional parts so that we have the parts where customers need them,” she notes.

Last year, Boeing added 35,000 parts to its inventory and lowered prices on another 24,000 based on market data, says Hopper. In addition, Aviall, a Boeing subsidiary, “added more than 54,000 parts last year, so we have doubled stocked parts for all of our production aircraft, and we have been working on reducing lead time by over 46 days for 4,000,” she says.

Boeing’s material services organization is organized in two portions—the manufacturer’s material management, which includes what you would think of as Boeing parts, from sales and distribution of spares; and Aviall, which “complements our capability because it provides wheels, tires, engine parts, chemicals, batteries and Airbus parts,” says Hopper. Aviall offers more than 2 million catalog items from more than 244 manufacturers. 

She says Boeing controls about 80% of the market for Boeing proprietary parts, but it “encourages competition because we like dual sources, and we want customers to have options.”

Hopper would not discuss the breakdown of new versus used serviceable material, but she admits the portion of used material “is pretty small.” However, “I do anticipate that changing, because we want to offer a full market basket. I do not want to reduce the price of a new part that has a lot of green time on it to try to compete with a used part, so I need to make sure I have both options available,” she says.

How does Hopper think Boeing differentiates its spare-parts offerings from other companies? The obvious is that the company, as the original manufacturer, has “detailed knowledge of all of the components flying on those airplanes, and we have data that tells us how those airplanes are operating, because we are the OEM and we have data that no one else has,” she says. “We are able to aggregate that data and compare it to other sources so we can better predict inventory needs.” Hopper also leads Boeing Commercial Aviation Services’ data analytics team, which looks at ways to increase customer efficiencies.

Given that the global commercial market will receive 2,150 annual aircraft deliveries—from all manufacturers—per year in 2017-25, according to Aviation Week’s Fleet & MRO Forecast, the supply chain is stretched. To accommodate this, Hopper says, “We are working really hard to communicate to our supply chain what our production needs are—as well as the aftermarket need—so that they can effectively and efficiently support both the production line and in-service needs.”  She says that’s true for first-, second- and third-tier suppliers. 

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