Getting the 100,000 parts needed to assemble a single plane on a timely basis is critical to McDonnell Douglas's ability to deliver commercial aircraft on schedule and within budget. Xavor and IBMGS worked closely together to create an Internet based extranet that transformed the aircraft manufacturer's complex inventory management process. The extranet links McDonnell Douglas and its 1000 suppliers, so that tracking parts, monitoring potential shortages, and overall communication are vastly improved.

Business Case for building this product or solution

A one-week delay of a single airplane part can wreak havoc on delivery schedules, resulting in hundreds of lost labor hours and the need to renegotiate contracts. The potential cost is enormous. But McDonnell Douglas also wanted to cut inventory-carrying costs and replace its inefficient, paper-based approach to supplier communication. In the words of one executive, "We were spending 20% of our time creating work orders and purchase orders, and 80% of our time managing changes to those documents!"

Benefit to the customer (Financial ROI or productivity improvements)

McDonnell Douglas's inventory management process is far more efficient and effective, so that schedule delays happen less often and are less costly. Manufacturing cycle times are shorter, and scheduling is far less time-consuming because the status of parts is easy to track. Moreover, just by cutting out costs related to paper, phone calls, faxes, and shipping, the solution paid for it within 12 months. Since automating the raw materials work orders, manual labor has decreased by 35%, costly data entry errors are minimized and "catch-up" overtime has been largely eliminated. The Internet-based extranet also provides security and reliability, which were critical customer needs.

Customer testimonial and how solution has influenced Boeing

IBM Global Services and Xavor each made a critical contribution to the McDonnell Douglas solution. Because of the close teamwork between the two partners, the solution came together quickly and cost-effectively. Our customer described it best:

"Computer technologies are evolving with greater speed. This has resulted in increased emphasis on specialization and reliance upon coordinating tasks with multi-skilled teams. IBMGS and Xavor formed just such a partnership to effectively support Douglas' customer requirements.

Xavor provided the overall project management. Their team of players brought extensive technology skills and management expertise to the partnership. Xavor met frequently with the specialized teams for status, problem resolutions, & suggestions, etc. They also met regularly with the key Douglas customer focal points to review status, reaffirm commitments and maintain the type of honest & open lines of communication essential for success."

Xavor was also accountable for the application design, programming, systems integration, testing & deployment. Xavor supplied the application programming talent for the technologies involved. Xavor had a proven successful track record of implementing such complex applications, and was able to develop multiple applications concurrently, and share common design philosophies at the same time. This has resulted in a similar look and feel to the applications, which is appreciated by the customers and has simplified training them.

IBM Global Services was responsible for the hardware, telecommunications & operating system architecture & infrastructure. Since IBMGS and McDonnell Douglas were in the middle of a multi-year support contract, this approach facilitated use of existing on-site support personnel wherever possible. After all, ultimately, existing team personnel will be accountable for supporting our applications. Involving them early in the project life cycle accelerated the learning curve and Smoothed the transition of these applications from development to production status.

The solutions and applications at Douglas Aircraft have been highlighted as exemplary extranet solutions on several occasions. Supplier Relations Teams from Douglas Aircraft presented their concepts at various symposiums and showed their solutions at the Los Angeles technology Symposium. The CIO of Boeing has presented the applications at industry events such as the Extranet Conference in San Francisco. The solution was highlighted in an issue of Information Week in an article titled, "Extranet Keeps Production Flying".

This application is gaining visibility and is being adopted internally at Boeing, who has acquired McDonnell Douglas. So far the application has been in production for over 4 years and has undergone various changes with changing business needs.