While each aircraft manufacturer is taking its own approach, many--both in the commercial and the military sectors--are taking a hard look at their buying practices and making changes to guarantee just-in-time deliveries and other efficiencies.

Perhaps the most pronounced changes have come in the commercial aerospace sector, where the Seattle-based Boeing Commercial Airplanes Group of Boeing Co. has consolidated its aluminum flat-roll and extrusions supplier base and integrated purchasing of these products. This accounts for much of their materials purchases, as aluminum comprises about 80 percent of their aircraft, under a single service provider--the TMX Aerospace Division of Thyssen Inc. North America, Detroit. TMX is also integrating Boeing's purchases of titanium. Likewise their major competitor, Airbus Industrie of Toulouse, France, is converting itself from a consortium of four European companies into one integrated entity that will eventually, once its metamorphosis is complete next year, utilize centralized metals purchasing.While many original equipment manufacturers in aerospace and elsewhere have taken moves to consolidate their supplier base and gain greater control of their metals purchasing and other requirements, Boeing's move, according to Jeffrey Phelan, a program manager for the aerospace giant's supply management and procurement division, said, is the first time that it has been done to this extent.

What Boeing Commercial is trying to do, said Sid Rose, senior raw materials manager, at a recent National Association of Aluminum Distributors meeting, is "rightsize" its supply base in an effort to come up with a fully integrated supply chain management system that best utilizes aluminum distributors and mills. This, he said, has reduced Boeing's purchases of aluminum flat roll and extrusions by just buying what the company truly needs.

Prior to this move, which was initiated about 2 1/2 years ago, Boeing's purchasing method was very inefficient, Rose said. "Every division operated independently with each having its own supply chain and its own customers," he said. "We didn't do anything together."

Pushed by the company's new thinking that followed Boeing's merger with McDonnell Douglas, this move, which has been termed as the Millennium Contract, was the brain child of the company's strategic sourcing team that was charged with identifying and implementing best practices across the company. Under this new program, Boeing Commercial now contracts with five aluminum producers--Alcoa Inc., Pittsburgh; Pechiney Rolled Products LLC, Ravenswood, W.Va.; Hoogovens Aluminium Walzprodukte GmbH, Koblenz, Germany; Kaiser Aluminum Corp., Houston; and Universal Alloys Co., Canton, Ga.--and three titanium producers--Titanium Metals Corp., Denver; RTI International Metals Inc., Niles, Ohio; and VSMPA of Russia. This is a 50-percent drop from the number of aluminum and titanium mills it used to buy from, and using just TMX represents an 80 percent decline in metal distributors.

However, TMX's role, Rose explained, is somewhat different than that of previous metal service centers. "They also take the time to call on our customers to determine what they are buying, forecast demand and try to provide us with all that data so we can determine what orders need to be placed."

This program, Phelan said, is still only about 80 percent implemented and will not be fully in place for another two years, which was the planned time frame to allow for previous long-term contracts to expire.

Thus far, he said, it has been working well, although there were some growing pains, especially during the beginning of 2000, when a lot of suppliers came on-stream at one time. But since then, he said, many of the kinks have been ironed out, as Boeing and its parts suppliers as well as the mills and TMX get used to the new way of doing business. "Purchasing is more streamlined, forecasting is more accurate, the mills produce what we need when we need it. It has definitely consolidated the supply chain, taking out a lot of the waste," he said.

Whether Boeing will extend this concept to other products in its commercial airplane group, such as aluminum rod, bar and tubing, or to its military airplane unit, is still uncertain, Phelan said, stating that it is possible if this program continues to be successful. "It is a company-wide effort to make efficiency gains, but the decision to expand it lies with our strategic sourcing team."

As for Airbus, as of 1967 the European commercial aerospace manufacturer had been a consortium of four leading companies, each of which were responsible for specific components of the aircraft, a spokesman explained. BAE Systems Plc of England has been responsible for the wings; Construcciones Aeronauticas SA (Casa) of Spain has been responsible for the tail sections; Aerospatiale Matra SA of France was responsible for the cockpit and wing center sections; and DaimlerChrysler Aerospace AG (Dasa) of Germany was responsible for the fuselage. The planes were assembled by Aerospatiale and Dasa. Each company, which had other operations not involved in Airbus, was responsible for purchasing the metals and other materials for their own components.