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WIederling
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 10:34 am

" The A330 had an airline quality rating of 0.82, the 787 0.94 "

quality rating: how is that computed? Does airframe age play into the equation?
Murphy is an optimist
 
WIederling
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 11:57 am

WIederling wrote:
" The A330 had an airline quality rating of 0.82, the 787 0.94 "

quality rating: how is that computed? Does airframe age play into the equation?


"airline quality rating" is an assay about airline quality and not airframe quality, right?
Murphy is an optimist
 
mjoelnir
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 12:33 pm

Polot wrote:
mjoelnir wrote:
Polot wrote:

Year end is skewed as Boeing shuts down for holidays (a couple of days for Thanksgiving and about a week for Christmas/New Years). You are taking the 14/month far too literally.


I do not take it to literally. It was always talked about monthly rate as the years average. When we talked about rate 8.3 for the 777, a rather exact number, it meant 98, 99 or 100 frames produced and delivered. Give or take a frame, but not 10.
Apart from that not only December is down but also November.

Boeing is closed for two days in November which only has 30 days to begin with. Again Boeing was not at rate 14 at the beginning of the year. They did not miss expectations by 10 planes. Just because because there were 14 loadings doesn’t mean they were at rate 14. Just look at the historical data. Boeing 787 in 2018 was at 12/month the entire year, perfectly matching the year’s average monthly leadings. But they still only loaded 9 in December. They also loaded 14 in March 2018 and August 2018. That doesn’t mean they were at rate 14.

Rate 14 was achieved in 2nd quarter of 2019 (not Jan 1 like you keep on acting). If you assume 9 months at 14/month and 3 at 12/mo you get 162 planes. Boeing delivered 158 planes. There are 4 HNA ntu 787s that are destined for Vistara but not yet delivered that all rolled out in July or August 2019 (I’m not talking end of December production holdouts here). You can see them right at the top of the spreadsheet you are mentioning in the current production tab. That is 162 right there not including any other planes built in 2019 but not yet delivered or delivered this month (likely during ramp up there was a month or so where it was at ‘13/mo’).

I don’t know why you are trying to argue they are not or never reached rate 14. The data clearly shows Boeing 787 production is at rate 14 at the moment.


It is very simple rate 14 means delivering or producing 14 frames a month on average. Boeing did not reach that. Even your 162 gives only rate 13.5. Trying the highest number, role out not loading of the FAL, does not get you to rate 14.
Regarding the rate comparison to other frames, it was never calculated with holidays, but the years production divided by 12.

I do not have to calculate 3 month at 12 and 9 month at 14, because there was no rate change during the year, there was no January, February and March at a lower rate and the rest of the year at a higher rate.

You want to talk about not delivered frames, that does not change anything either. There were 160 frames loaded into the lines in 2019, that is the FAL production rate. Divided by 12 that makes 13.33 that is the achieved production rate.
 
raumfahrt82
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 1:07 pm

mjoelnir wrote:

It is very simple rate 14 means delivering or producing 14 frames a month on average. .


Yes it is an average. But it depends on when you start the averaging...

Why do you insist "rate 14" is defined as average monthly deliveries beginning from January 2019 ?

If I define "rate 14" as average monthly delivery rate since year 2004, Boeing now reached only a rate of 5, far away from rate 14.
 
mjoelnir
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 1:59 pm

raumfahrt82 wrote:
mjoelnir wrote:

It is very simple rate 14 means delivering or producing 14 frames a month on average. .


Yes it is an average. But it depends on when you start the averaging...

Why do you insist "rate 14" is defined as average monthly deliveries beginning from January 2019 ?

If I define "rate 14" as average monthly delivery rate since year 2004, Boeing now reached only a rate of 5, far away from rate 14.


The Website ALL THINGS 787 upped December by one frame both for roll out and loading, so numbers change slightly

Why do I start at January 2019, because I look at one year

What does change if we remove the first few month
If we take the whole year, loading 161 frames divided by 12 gives us rate 13.41
If we exclude January we get loading 161 - 14 = 147 frames, divided by 11 gives us rate 13.36
If we also exclude February we get loading 147 - 12 = 135 frames, divided by 10 gives us rate 13.5
If we also exclude March we get loading 135 - 15 = 120 frames, divided by 9 gives us rate 13.33
excluding April 120-14=106 divided by 8 gives 13.25.
excluding May 106-14=92 divided by 7, rate 13.14
It does not get nearer to rate 14.

If we add December 2018 and cut December 2019
161+9-10=160 divided by 12 rate 13.33
November 2018 to October 2019
161+13+9-12-10=161 divided by 12 rate 13.41
October 2018 to September 2019
161+12+13+9-15-12-10=158 equals rate 13.17
So that ends to try to look at a 12 month period

You get near to rate 14 by taking the first 10 month of 2019, loading 139 divided by 10 and you get rate 13.9. So for about 10 month Boeing was near rate 14 for the 787.
 
WIederling
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 3:05 pm

raumfahrt82 wrote:
mjoelnir wrote:

It is very simple rate 14 means delivering or producing 14 frames a month on average. .


Yes it is an average. But it depends on when you start the averaging...

Why do you insist "rate 14" is defined as average monthly deliveries beginning from January 2019 ?

If I define "rate 14" as average monthly delivery rate since year 2004, Boeing now reached only a rate of 5, far away from rate 14.


You look at the press releases from Boeing: "rate 14, horray"
you can start from there or later.
mentioning 2004 is a distraction.

Actually and looking they
expected to reach rate 14 at end of decade ( 2016 article )
Speeding up production to rate 14 ( january 2019 article )
Lots of "insinuating" talk but never reached.
Press is happy to boost Boeing :-)
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Revelation
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 3:16 pm

A.net pedantry is reaching new highs in this thread.

It depends on what the meaning of is is, after all.

At the same time, it's an evil conspiracy to manufacture credit for Boeing, because American Exceptionalism.

What next?
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WIederling
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 3:28 pm

Revelation wrote:
A.net pedantry is reaching new highs in this thread.

It depends on what the meaning of is is, after all.

At the same time, it's an evil conspiracy to manufacture credit for Boeing, because American Exceptionalism.

What next?

Häh?

If you follow commentary "everybody knows that the 787 is currently produced at rate 14"
then we have announcement of going from "rate 14" to "rate 12", maybe further.

Always interesting to watch how facts morph
( well rumors obvious accelerate to near light speed over 2..3 transitions
and the only grow bigger/heavier )

Another one is careless ( or rather careful ) attribution of effects to mechanism that do not exist.
Murphy is an optimist
 
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PW100
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 5:05 pm

Revelation wrote:
A.net pedantry is reaching new highs in this thread.

It depends on what the meaning of is is, after all.

At the same time, it's an evil conspiracy to manufacture credit for Boeing, because American Exceptionalism.

What next?


So true . . .

When does one *start* to be at rate 14?

Would one need to wait for a full year before establishing rate is at 14?

One would expect there is a reason it's called a monthly rate, and not a "yearly rate divided by 12".

I'd expect Boeing FAL planning, and supply chain planning would be using the monthly figure, years in advance . . . .
Immigration officer: "What's the purpose of your visit to the USA?" Spotter: "Shooting airliners with my Canon!"
 
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kanban
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 5:28 pm

Boeing uses a 200 day manufacturing calendar, an official production rate start is determined by the first aircraft at the new rate rolling-out from the factory. A production rate is somewhat fluid as it's a goal not an absolute. all the work scheduling starts new rate long before and generally the wing spar is the first significant point. rate adjustment scenarios are tested monthly even though seldom put into place. However there are sometimes weekly adjustments based on customer schedule sensitivity. With the Just in Time and pull philosophy, rate changes can be implemented into the FAL before the suppliers adjust leaving some groaning at a short term inventory buildup.

internal rates are sometimes adjusted for manpower requirements, overtime excesses, vendor delays, and out of sequence work.
 
81819
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 12:59 am

WIederling wrote:
" The A330 had an airline quality rating of 0.82, the 787 0.94 "

quality rating: how is that computed? Does airframe age play into the equation?


Sorry, I should have qualified the analysis.

I keep a record of all orders and deliveries for the A330, A350, 787 and 777.

Airlines are catagorised as either 1 - less than 10, 2 - less than 20 & 3 - greater than 20. This allows the quality of an order book (I.e. potential for follow on orders to be analysed) to be analysed. An order book with all 2 airlines would score 1. As such an order book with more 1 airlines will score less than 1 and with 3 airlines more than 1.

I hope this helps.
 
mjoelnir
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 1:59 am

Revelation wrote:
A.net pedantry is reaching new highs in this thread.

It depends on what the meaning of is is, after all.

At the same time, it's an evil conspiracy to manufacture credit for Boeing, because American Exceptionalism.

What next?


Rate has been commonly been discussed to the accuracy of 0.3 or 0.5. So a rate for the 777 in the years 2013, 2014, 2015 and 2016 has been described as rate 8.3. That has equaled between 98 and 100 frames delivered. Rate 8.3 equals slightly less than 100 frames a year. Nobody did round that up to rate 9.
A rate of 3.5 is rate 3.5 not 4.
If one applies the same accuracy to the glorious 787 it is called pedantry. It is very simple accuracy. A rate 13.5 is not rate 14.

But it seems when Boeing talks about rate 14, it has to be rate 14, even if it is not.
 
RJMAZ
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 3:17 am

travelhound wrote:
Airlines are catagorised as either 1 - less than 10, 2 - less than 20 & 3 - greater than 20. This allows the quality of an order book (I.e. potential for follow on orders to be analysed) to be analysed. An order book with all 2 airlines would score 1. As such an order book with more 1 airlines will score less than 1 and with 3 airlines more than 1.

I hope this helps.

Have you thought of adding a few other variables?

"Order quality" would be better than "Airline quality".

If an airline had a current fleet of 24 aircraft but placed an order for 107 aircraft that would score a very low order quality in my opinion.

An order that is less than 50% of the existing fleet size would be deemed high quality. Air New Zealands 787-10 order is an example of a high quality order.

You could multiply the order quality with airline quality together and years of operation to get a really good value.
 
81819
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 3:53 am

RJMAZ wrote:
travelhound wrote:
Airlines are catagorised as either 1 - less than 10, 2 - less than 20 & 3 - greater than 20. This allows the quality of an order book (I.e. potential for follow on orders to be analysed) to be analysed. An order book with all 2 airlines would score 1. As such an order book with more 1 airlines will score less than 1 and with 3 airlines more than 1.

I hope this helps.

Have you thought of adding a few other variables?

"Order quality" would be better than "Airline quality".

If an airline had a current fleet of 24 aircraft but placed an order for 107 aircraft that would score a very low order quality in my opinion.

An order that is less than 50% of the existing fleet size would be deemed high quality. Air New Zealands 787-10 order is an example of a high quality order.

You could multiply the order quality with airline quality together and years of operation to get a really good value.


There are a lot of variables. I have taken a quantitative approach to make it less subjective. Overall the numbers should flatten out the variables like the Air New Zealand example you mentioned.
 
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Polot
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 12:41 pm

mjoelnir wrote:
Why do I start at January 2019, because I look at one year


And that is your problem. You are using a year in which production rate shifted (from 12->14) and then are seemingly shocked that it doesn’t average out to 14/mo. At the end of this year Boeing is transitioning back to 12/mo. I hope I’m not spoiling anything when I tell you the 2020 rate won’t average to 14/mo or 12/mo either. When a company says “14/mo” they mean that is what it would average out to if they ran that rate for an entire calendar year. Boeing has not been at that rate for a year.

You don’t seem to understand production is not always consistent throughout the entire year. At the end of the year production is generally lower due to more holidays and time off, and people/businesses just being in general ‘holiday mode’. This is made up in the early months. But in the early months of the year 787 production was still ramping up to 14, it wasn’t at rate 14.

If you look at the mid year when production was consistent it, surprise surprise, averages to 14. (14.125 if looking from Mar-Oct, 13.888 if including November).
 
Exeiowa
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 2:37 pm

The initial reason for the higher rates was to bring unit cost down and therefore better compete on price with the A330, I am assuming this experiment is over with the recent orders for A330 last year, hence why the rate is going back down to a more susistanable level.
 
WIederling
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 4:39 pm

travelhound wrote:
WIederling wrote:
" The A330 had an airline quality rating of 0.82, the 787 0.94 "

quality rating: how is that computed? Does airframe age play into the equation?


Sorry, I should have qualified the analysis.

I keep a record of all orders and deliveries for the A330, A350, 787 and 777.

Airlines are catagorised as either 1 - less than 10, 2 - less than 20 & 3 - greater than 20. This allows the quality of an order book (I.e. potential for follow on orders to be analysed) to be analysed. An order book with all 2 airlines would score 1. As such an order book with more 1 airlines will score less than 1 and with 3 airlines more than 1.

I hope this helps.

Sound about as logical as what defines what is "kosher" or "haram". "complex convolution of folklore".
Murphy is an optimist
 
marcelh
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 5:53 pm

Exeiowa wrote:
The initial reason for the higher rates was to bring unit cost down and therefore better compete on price with the A330, I am assuming this experiment is over with the recent orders for A330 last year, hence why the rate is going back down to a more susistanable level.

So much for “killing” the A330neo for now....
 
muralir
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 6:38 pm

Exeiowa wrote:
The initial reason for the higher rates was to bring unit cost down and therefore better compete on price with the A330, I am assuming this experiment is over with the recent orders for A330 last year, hence why the rate is going back down to a more susistanable level.


How does raising the production rate bring down production cost? Not doubting you, just curious. Is it because the shift from 12 to 14 didn't involve much fixed cost (eg buying new tooling, production lines, etc) and rather just more marginal cost (maybe add a shift of workers), so you amortize the fixed cost over more planes? But in that case going back down to 10 means the planes will be higher cost?

Also I thought the increase was because the backlog was packed enough that airlines couldn't get delivery slots when they needed them for new orders, so were choosing Airbus instead? There's a balance between too small a backlog that impedes managing your long manufacturing lead times, and too big a backlog that no one can get new orders in when they need them. Correct me if I'm wrong but I thought Boeing was getting to the latter with the 787.
 
WIederling
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Re: Boeing considering another 787 production cut

Mon Jan 27, 2020 7:19 pm

muralir wrote:
Exeiowa wrote:
The initial reason for the higher rates was to bring unit cost down and therefore better compete on price with the A330, I am assuming this experiment is over with the recent orders for A330 last year, hence why the rate is going back down to a more susistanable level.


How does raising the production rate bring down production cost? .


Buy 5 get 6 ( for parts.)
Fixed cost distributed over more planes.

Parallel to the rate increase Boeing seems to have "significantly leaned on subcontractors for better pricing.
They pimped numbers by moving honoring contractor invoices later.
They started snitching in paper work.
They reduced complexity in lightning protection.

All things subsumed publicly under "large efficiency increases in production going to rate 14".

Interesting to note that a displacement deal ala Hawaii ( probably under the umbrella of dumping law protection ) was not repeated.

787 made inroads in cost reduction. But they also started at 2..3 times the planned cost per plane.

reminds me: The guy who "Iden of March"ed Edzard Reuter trashed billions (Dornier, Focker) but got a medal for
reclaiming millions.
Murphy is an optimist
 
Exeiowa
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 9:33 am

muralir wrote:
Exeiowa wrote:
The initial reason for the higher rates was to bring unit cost down and therefore better compete on price with the A330, I am assuming this experiment is over with the recent orders for A330 last year, hence why the rate is going back down to a more susistanable level.


How does raising the production rate bring down production cost? Not doubting you, just curious. Is it because the shift from 12 to 14 didn't involve much fixed cost (eg buying new tooling, production lines, etc) and rather just more marginal cost (maybe add a shift of workers), so you amortize the fixed cost over more planes? But in that case going back down to 10 means the planes will be higher cost?

Also I thought the increase was because the backlog was packed enough that airlines couldn't get delivery slots when they needed them for new orders, so were choosing Airbus instead? There's a balance between too small a backlog that impedes managing your long manufacturing lead times, and too big a backlog that no one can get new orders in when they need them. Correct me if I'm wrong but I thought Boeing was getting to the latter with the 787.


I have no idea how specifically you make aircraft more cheaply by running at a higher rate, it comes from what was stated on here by various posters and things from Boeing. And it could be.verfied that it indeed was the case when you looked at the numbers from the program accounting method they use. I am not going to engage in the ridiculse arguments about it showing about them being bankrupt or not (and neither should anyone else here) because of it but it does gives us an exceptional window into the cost and profitability on a per frame basis over time.
 
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scbriml
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 10:09 am

Exeiowa wrote:
I have no idea how specifically you make aircraft more cheaply by running at a higher rate, it comes from what was stated on here by various posters and things from Boeing.


It's called economies of scale. It's normally cheaper to build lots of an item rather than just a few.

Consider fixed costs - you have to build a factory to produce your product, you have to build or buy tools to manufacture your product, you have to pay to run your factory 24h a day (power, heating, maintenance, local taxes, etc). Those costs don't change regardless of whether you build one or ten products per day (or month in the case of planes). However, if you're building ten a day, then your fixed costs for that day are spread over ten units rather than one. The fixed 'build cost' per product at ten per day is (simplisticly) 10% what it would be at one per day.
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Exeiowa
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 10:33 am

It's not that I am ignorant of economy of scale, my previous job was making chemical plants run more efficiently. I have never worked in the aerospace industry or heavy manufacturing and do not have first hand experience of how these operate and could only have general ideas not specic.

In my line of work I have dealt with many people who are essentially lay people in position of authority, and while kinetics is easy enough for people to grasp as a concept , thermodynamics is not. (Which is why you can find so many people "inventing" the same stupid ideas that do not work, like water from air) That is why I would only talk in very general terms about a topic I am not a subject expert in, even though I might know a little more than I say. Now if someone would like to increase their reactor yields, or improve downstream recovery efficiency, I could probably help, but did you check your measurement system first? These are always terrible when you go look at them properly.....
 
mjoelnir
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 10:58 am

scbriml wrote:
Exeiowa wrote:
I have no idea how specifically you make aircraft more cheaply by running at a higher rate, it comes from what was stated on here by various posters and things from Boeing.


It's called economies of scale. It's normally cheaper to build lots of an item rather than just a few.

Consider fixed costs - you have to build a factory to produce your product, you have to build or buy tools to manufacture your product, you have to pay to run your factory 24h a day (power, heating, maintenance, local taxes, etc). Those costs don't change regardless of whether you build one or ten products per day (or month in the case of planes). However, if you're building ten a day, then your fixed costs for that day are spread over ten units rather than one. The fixed 'build cost' per product at ten per day is (simplisticly) 10% what it would be at one per day.


How much higher rate decrease your production cost depends on the relation of fixed cost to variable cost. If your fixed cost are 10% of the production cost, increasing numbers will give you limited advantage. If your fixed cost are 90%, your advantage in increasing numbers will be considerable.
I assume that the variable cost are considerable when building an airliner. Variable cost, buying the engines for example, can also decrease with an increased rate.

The next point is how much will your production cost be reduced with increased numbers. You will see a huge decrease going from rate 1 to rate 5, quite a bit less going from rate 5 to rate 10 and still less going from 10 to 15. Above a certain point the advantage will tend to zero.

So I assume that going from rate 12 to rate 14 would not decrease the cost per plane a lot. And the other way round going from 14 down to 10 again, will not increase the cost per plane significantly.
 
FluidFlow
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 11:09 am

mjoelnir wrote:
scbriml wrote:
Exeiowa wrote:
I have no idea how specifically you make aircraft more cheaply by running at a higher rate, it comes from what was stated on here by various posters and things from Boeing.


It's called economies of scale. It's normally cheaper to build lots of an item rather than just a few.

Consider fixed costs - you have to build a factory to produce your product, you have to build or buy tools to manufacture your product, you have to pay to run your factory 24h a day (power, heating, maintenance, local taxes, etc). Those costs don't change regardless of whether you build one or ten products per day (or month in the case of planes). However, if you're building ten a day, then your fixed costs for that day are spread over ten units rather than one. The fixed 'build cost' per product at ten per day is (simplisticly) 10% what it would be at one per day.


How much higher rate decrease your production cost depends on the relation of fixed cost to variable cost. If your fixed cost are 10% of the production cost, increasing numbers will give you limited advantage. If your fixed cost are 90%, your advantage in increasing numbers will be considerable.
I assume that the variable cost are considerable when building an airliner. Variable cost, buying the engines for example, can also decrease with an increased rate.

The next point is how much will your production cost be reduced with increased numbers. You will see a huge decrease going from rate 1 to rate 5, quite a bit less going from rate 5 to rate 10 and still less going from 10 to 15. Above a certain point the advantage will tend to zero.

So I assume that going from rate 12 to rate 14 would not decrease the cost per plane a lot. And the other way round going from 14 down to 10 again, will not increase the cost per plane significantly.



While that is true, you also have to see the actual price such an airliner costs. If you can cut costs by 2% going from 12 to 14 per month you actually save around 2 million dollars per aircraft (assuming the 787 costs 100 million to build). If you sell it for 110 million the reduction in manufacturing costs of 2% translates to an increase in profit of 20%. That is a massive jump.
 
mjoelnir
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 11:53 am

FluidFlow wrote:
mjoelnir wrote:
scbriml wrote:

It's called economies of scale. It's normally cheaper to build lots of an item rather than just a few.

Consider fixed costs - you have to build a factory to produce your product, you have to build or buy tools to manufacture your product, you have to pay to run your factory 24h a day (power, heating, maintenance, local taxes, etc). Those costs don't change regardless of whether you build one or ten products per day (or month in the case of planes). However, if you're building ten a day, then your fixed costs for that day are spread over ten units rather than one. The fixed 'build cost' per product at ten per day is (simplisticly) 10% what it would be at one per day.


How much higher rate decrease your production cost depends on the relation of fixed cost to variable cost. If your fixed cost are 10% of the production cost, increasing numbers will give you limited advantage. If your fixed cost are 90%, your advantage in increasing numbers will be considerable.
I assume that the variable cost are considerable when building an airliner. Variable cost, buying the engines for example, can also decrease with an increased rate.

The next point is how much will your production cost be reduced with increased numbers. You will see a huge decrease going from rate 1 to rate 5, quite a bit less going from rate 5 to rate 10 and still less going from 10 to 15. Above a certain point the advantage will tend to zero.

So I assume that going from rate 12 to rate 14 would not decrease the cost per plane a lot. And the other way round going from 14 down to 10 again, will not increase the cost per plane significantly.



While that is true, you also have to see the actual price such an airliner costs. If you can cut costs by 2% going from 12 to 14 per month you actually save around 2 million dollars per aircraft (assuming the 787 costs 100 million to build). If you sell it for 110 million the reduction in manufacturing costs of 2% translates to an increase in profit of 20%. That is a massive jump.


If you need to increase discounts to increase sales, any advantage in regards to production cost, will be eaten up fast.
 
WIederling
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 12:48 pm

mjoelnir wrote:
If you need to increase discounts to increase sales, any advantage in regards to production cost, will be eaten up fast.


Loss leader, competitor displacement. 787 shew both.
The hope is to remove competitors from the market and further on have pricing power.

Product introduction of the 787 was perfectly done and timed.
(Super PR, Boeing airliners now more a lifestyle product than anything else.).

Boeing could assemble quite the order book.
IMU planning could have been that Airbus would run dry in the upcoming GFC
and in the "market relight" afterwards Boeing could dominate.
Reason why the unrealistic 4 years timeline apparently bothered nobody in Boeing management.
Murphy is an optimist
 
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par13del
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 12:54 pm

WIederling wrote:
mjoelnir wrote:
If you need to increase discounts to increase sales, any advantage in regards to production cost, will be eaten up fast.


Loss leader, competitor displacement. 787 shew both.
The hope is to remove competitors from the market and further on have pricing power.

I am shocked that the deferred program accounting cost of the 787 and the amount of reduction that has taken place while the 787 is doing this loss leader competitor displacement is not mentioned or factored into the thought process.
 
Scotron12
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 3:04 pm

par13del wrote:
WIederling wrote:
mjoelnir wrote:
If you need to increase discounts to increase sales, any advantage in regards to production cost, will be eaten up fast.


Loss leader, competitor displacement. 787 shew both.
The hope is to remove competitors from the market and further on have pricing power.

I am shocked that the deferred program accounting cost of the 787 and the amount of reduction that has taken place while the 787 is doing this loss leader competitor displacement is not mentioned or factored into the thought process.


Why are you shocked? No one cares as long as Boeing are propping up their shares with big buy backs and dividend payments.

Designing and producing airplanes are a secondary consideration to those currently in charge. A good name for the 737MAX8 would be the 737MACD
 
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kanban
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 5:35 pm

Boeing purchase contracts are not for single airplanes but for all planes in the authorized order block. the delivery rate to Boeing is flexible and can be adjusted based on customer preferences without incurring costs. Remember Boeing does not store component parts but has them delivered as needed. rate changes may increase or decrease a vendors pay. there are no savings for larger lots sizes nor penalties for smaller lot sizes.
 
WayexTDI
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Re: Boeing considering another 787 production cut

Tue Jan 28, 2020 6:45 pm

kanban wrote:
Boeing purchase contracts are not for single airplanes but for all planes in the authorized order block. the delivery rate to Boeing is flexible and can be adjusted based on customer preferences without incurring costs. Remember Boeing does not store component parts but has them delivered as needed. rate changes may increase or decrease a vendors pay. there are no savings for larger lots sizes nor penalties for smaller lot sizes.

But a supplier will most likely cut you a better deal if you negotiate 168 shipsets (14/month x 12 months) vs. 144 shipsets (12/month x 12 months), regardless of the delivery rate (within contract limits).
 
Carmitage
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Re: Boeing considering another 787 production cut

Wed Jan 29, 2020 11:31 am

the delivery rate to Boeing is flexible and can be adjusted based on customer preferences without incurring costs.

Don't think this is true, or not over the long term, as if the delivery rates come down, the block is extended over a longer period, so there are more fixed costs (if you extend the block from 10 years to 11 years, there is one more year of fixed costs to cover). (It is true on a month by month basis)
Similarly changing the block size impacts margins - increasing the block size will bring more, lower cost aircraft into the block, lowering the average cost, benefiting margins of all aircraft deliveries..
 
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PepeTheFrog
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Re: Boeing considering another 787 production cut

Wed Jan 29, 2020 1:27 pm

Just in: 787 production will be lowered to 10 aircraft per month in early 2021.

https://twitter.com/MaxK_J/status/1222507987421605892

CEO says production may be increased back to 12 per month in 2023, but will depend on new orders.
Good moaning!
 
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SQ22
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Re: Boeing considering another 787 production cut

Wed Jan 29, 2020 4:33 pm

FlightGlobal is also reporting a lowered production rate from 2021 based on current environment and near-term market outlook.

Boeing to reduce 787 production to 10 aircraft per month in 2021
 
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kanban
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Wed Jan 29, 2020 8:32 pm

Boeing buys components in an "X" number ship sets as authorized by the firing order, period. Those who can only think in terms of quantitative pricing as a matter of scale need to look at the actual cost of inventory which can exceed the actual part cost by up to 200% per year.

The second part of the rate reduction is that same cost percentage can apply to white tails produced waiting for a customer. Boeing took a gamble on continued production of the MAX when the immediate return to flight started to slide. What's in the cost of storage? Airport fees, periodic maintenance, rolling the stock around to prevent tire flat spots, mothballing and removal, service bulletin updates, customers going out of business or changing fleet makeup plans, repainting, and bad publicity. That stuff can not be added to the customer contract cost unless requested by the customer.
 
mjoelnir
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 2:46 pm

looking at https://docs.google.com/spreadsheets/d/ ... dit#gid=48 on all things 787

Loading of the 787 production lines in January, Everett 5 and Charleston 3, together 8. Perhaps the numbers will be corrected slight up in the next weeks.
January 2019 7 + 7, together 14
January 2018 8 + 5, together 13
January 2017 7 + 4, together 11

I would say only 8 frames loaded in the FALs looks like hard braking in regards to production rate..
 
Scotron12
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 2:59 pm

If the coronavirus continues for any extended period of time, the impact to any Chinese ordering 787s are greatly diminished. Or any aircraft, for that matter. Trade deal or no trade deal.
 
2175301
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 3:17 pm

Scotron12 wrote:
If the coronavirus continues for any extended period of time, the impact to any Chinese ordering 787s are greatly diminished. Or any aircraft, for that matter. Trade deal or no trade deal.


Irrelevant for long term purchases: A biological fact is that the coronavirus will eventually sweep worldwide, as do all viruses. This was true even in the days of only ship travel (1918 flue virus estimated at between 50 -100 million dead worldwide).

The purpose of the current short term travel restrictions and containment's is to allow time for a vaccine to be developed that will mitigate the effect worldwide. There are no health officials who think that it will not ultimately spread worldwide. They are hoping to delay massive and fast spread by at about a year or so and hope that they can get a suitable vaccine developed before most of the world sees it.

Since aircraft purchases are for long term... and made years in advance. A reality is that the coronavirus is not likely even on the discussion list as far as future air-travel needs.

As for the 787. A natural part of any aircraft production cycle is that at some point they slow down from the highest production rate. Nothing wrong with the 787, reducing production rate was going to happen sometime. 10 per month is still a pretty robust production rate for a widebody.

Have a great day,
 
tommy1808
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Re: Boeing considering another 787 production cut

Tue Feb 04, 2020 4:02 pm

Exeiowa wrote:
(Which is why you can find so many people "inventing" the same stupid ideas that do not work, like water from air)


That does work, it's called dehumidifier..I guess you mean cheap/energy efficient water from air doesn't. But those scammed a lot of money out of a lot of people.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Exeiowa
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 5:14 pm

mjoelnir wrote:
looking at https://docs.google.com/spreadsheets/d/ ... dit#gid=48 on all things 787

Loading of the 787 production lines in January, Everett 5 and Charleston 3, together 8. Perhaps the numbers will be corrected slight up in the next weeks.
January 2019 7 + 7, together 14
January 2018 8 + 5, together 13
January 2017 7 + 4, together 11

I would say only 8 frames loaded in the FALs looks like hard braking in regards to production rate..


Maybe they had to spend extra time vacuuming up the metal shavings in Charleston, held things up a bit.
 
trex8
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 5:18 pm

Anyone have a guess as to how much more price wise Boeing may have to up prices with this reduction in production rate? There was a a lot of speculation they were able to undercut A on some deals due to lower costs on the higher rates.
 
WIederling
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 5:31 pm

trex8 wrote:
Anyone have a guess as to how much more price wise Boeing may have to up prices with this reduction in production rate? There was a a lot of speculation they were able to undercut A on some deals due to lower costs on the higher rates.


They can't "up prices".

planes are sold. they just lose profit ( or deferred cost reduction.)
Murphy is an optimist
 
UnMAXed
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 7:17 pm

Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.
 
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qf789
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 7:24 pm

UnMAXed wrote:
Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.


The current production rate is 14 not 12
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UnMAXed
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 7:33 pm

qf789 wrote:
UnMAXed wrote:
Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.


The current production rate is 14 not 12

Wasn't it supposed to drop to 12 this year?
 
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scbriml
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 8:38 pm

UnMAXed wrote:
qf789 wrote:
UnMAXed wrote:
Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.


The current production rate is 14 not 12

Wasn't it supposed to drop to 12 this year?


IIRC, it’s supposed to reduce to 12 by the end of the year and is planned to reduce further to 10 in early 2021.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
SteelChair
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 8:43 pm

My guess is they will announce a further cut to 8 in about 6 months or so to protect the soft orders in the orderbook.
 
mjoelnir
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 8:48 pm

qf789 wrote:
UnMAXed wrote:
Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.


The current production rate is 14 not 12


How do you calculate that? A FAL can not produce more frames, than there are loaded into it and that seems to be 8 this February.
 
WIederling
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Tue Feb 04, 2020 10:00 pm

qf789 wrote:
UnMAXed wrote:
Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.


The current production rate is 14 not 12


The current production rate is 13 something.
they haven't really reached rate 14.
It's all talk mostly.
Murphy is an optimist
 
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qf789
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Re: Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Wed Feb 05, 2020 2:06 am

mjoelnir wrote:
qf789 wrote:
UnMAXed wrote:
Somehow I don't see them producing 144 787s this year.
Nor 120 frames in 2021.
And yes, THAT is what rates 12 and 10 actually mean.


The current production rate is 14 not 12


How do you calculate that? A FAL can not produce more frames, than there are loaded into it and that seems to be 8 this February.


I am basing that on that being the current planned projection from Boeing, they have indicated that the rate will drop later in the year. FWIW the numbers you quoted upthread aren't accurate as the spreadsheet hasn't been updated for over a week, LN981 which is a 788 for American shows positions 2 but it rolled out of FAL a few days ago
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