What quality and supply chain issues are the Boeing 737 Max plane and The Boeing Company facing? and how this is affecting its performance?

The Boeing Company's latest crisis involves the 737 Max 9 (a longer version of the most common model the Max 8) which was at the centre of a controversy after its two crashes in 2018 and 2019.

The main problem is the flaws in the software design that took flight control away from the pilots without their knowledge based on data from a single sensor.

In that case, Boeing had to redesign an automated flight-control system before the FAA would let Max 8s and Max 9s resume flying after a 20-month grounding.

On top of this critical issue, Boeing is facing supply chain challenges with several of its suppliers. Some of the specific suppliers that Boeing is struggling to work with include:

• CFA International: Boeing has identified engine castings produced by CFA International as a primary bottleneck in the production of its 737 planes, facing delays of up to two months.
• Spirit AeroSystems: Spirit AeroSystems, a major Boeing supplier based in Kansas, has been under scrutiny as federal investigators try to understand why a fuselage arrived from Spirit's Kansas factory with a "hideously high and very alarming number" of defects.

This last company that's now Spirit AeroSystems used to be part of Boeing, until it was sold off in 2005. Boeing leaders concede that they may have outsourced too many parts of the manufacturing chain.

Now federal investigators are looking more closely at Spirit AeroSystems to understand what went wrong with the door panel that blew off an Alaska Airlines Boeing 737 Max 9 in midair last month (Jan 2024) — the latest chapter in the long and troubled relationship between the two companies. Also, the FAA is sending a team of roughly two dozen aviation safety inspectors to conduct reviews at Spirit's factory in Wichita, and at Boeing's 737 Max factory in Renton, Wash.

Boeing announced that about 50 jets will need additional work before they can leave the factory because of problems with improperly drilled holes. Boeing says the production errors are "not an immediate flight safety issue."

In addition to the 737 Max 8 and 737 Max 9 problems it had between Mar 2019 and Dec 2020 when a couple of crashes happened, Boeing is now experiencing overall specific supply chain constraints that include:

1. Shortage of certain materials: Boeing is experiencing a shortage of materials such as foam insulation tape and seat deliveries, which is slowing down the assembly of the 737 MAX.
2. Engine castings and wiring connector bottlenecks: Boeing has identified engine castings and a type of wiring connector as the primary bottlenecks in the production of its 737 planes.
3. Labor shortage: A significant labor shortage has substantially decreased the rate at which suppliers can provide parts to manufacturers.
4. Communication failures: Communication failures have made it difficult for Boeing to monitor operations and ensure that delivered parts are of high quality.
5. Supplier capability assessment challenges: Boeing has faced challenges in assessing the capabilities of its suppliers, which has led to quality control issues.
6. Delivery time challenges: Boeing has struggled to meet delivery timelines due to supply chain issues.
7. Long-term constraints: Boeing CEO Dave Calhoun has expressed concern that supply chain issues could persist for the next 18 months.

These constraints have led to delayed deliveries, production constraints, and long-term supply chain challenges for Boeing.

Also, the recent manufacturing problems in Boeing have had adverse consequences on its supply chain and the companies involved in it. These consequences include:

• Delayed Deliveries: Supply chain problems have slowed down the delivery of aircraft, further exacerbating Boeing's existing issues with delivery timelines. This has led to a backlog of undelivered orders, impacting customer satisfaction and the company's financial performance.
• Production Constraints: Boeing has struggled to increase production due to component shortages and labor challenges in its supply chain. This has led to delays in fulfilling orders and has hindered the company's ability to meet the surge in travel demand, impacting its competitiveness in the market.
• Aircraft Grounding: Some airlines have been unable to take delivery of their planes due to travel restrictions, leading to a buildup of undelivered aircraft. This has resulted in excess inventory and financial strain for Boeing.
• Financial Impact: The supply chain constraints have had a significant financial impact on Boeing, with the company cautioning that the aerospace industry could suffer from supply disruptions for more than half a decade. This has led to concerns about delayed deliveries, increased costs, and reduced profitability.
• Long-Term Supply Chain Challenges: Boeing's CEO has expressed concern that supply chain issues could persist for the next 18 months, impacting the company's ability to stabilize production and meet customer demand. This has raised questions about the long-term viability of Boeing's supply chain and its ability to fulfill orders on time.

In summary, the recent manufacturing problems in Boeing have had far-reaching adverse consequences on its supply chain, leading to delayed deliveries, production constraints, excess inventory, financial strain, and long-term supply chain challenges. These issues have impacted the company's ability to meet customer demand, fulfill orders, and maintain its competitive position in the aerospace industry.

Finally, on Jan 31st, 2024, Boeing CEO Dave Calhoun addressed Boeing employees with the company's reported year-end 2023 results, and his final remark was "Increased scrutiny will make us better".