Having a customer or supplier tell you how to run your business might be viewed as an affront, but Allfast Fastening Systems Inc. actually asked its biggest customer to do just that.
Allfast, which makes rivets and rivet guns, is struggling to meet the ballooning demands of Boeing Co.
So it invited representatives from the Seattle-based company to spend a week at Allfast’s City of Industry plant to hammer out specific production kinks. During that week in November, the outsiders also set up detailed processes for ordering and delivering goods.
“There’s a lot of things concerning production that can’t be worked out over the phone,” said Glenn Willey, Allfast’s vice president of marketing. “With our suppliers and people from Boeing in one place, they can all see problems and figure out solutions.”
For Boeing, such fine-tuning is becoming critical. The airplane manufacturer has been working frantically to keep up with an onslaught of orders for jets.
Boeing has pointed to an inability to obtain adequate parts and materials from its suppliers as an obstacle to meeting its ambitious production schedule; in October, the company halted production of its 737 and 747 jets for a month to address production inefficiencies.
Allfast is one of 600 California suppliers for the Boeing Commercial Airplane Group, which uses Allfast’s products on five jet models.
“Allfast is dealing with the same issues that other companies have in keeping up with demand from Boeing and other airplane manufacturers,” said Tom Bundy, a principal with Bellevue, Wash.-based Deltapoint Corp., an industry consultant. “I don’t think anybody, including Boeing, expected this rate of increase in their business in so short a time.”
So far, Boeing officials say Allfast has not been part of the problem.
“Allfast is a good supplier that has consistently met their deadlines and our requirements,” said Boeing spokeswoman Anne DeAngelis, who mentioned that Allfast won the commercial group’s President’s Award for Excellence last year.
Randall said the company made use of a slow period a few years ago to iron out production kinks that were costing $2 million a year. Today the annual cost associated with scrapped parts is only about $200,000, he said.
A main focus of Boeing’s recent visit was improving production of wing rivets, which account for about 22 percent of Allfast’s sales. Wing rivets guard against fuel leakage and require more refinement than the ones used on many other airplane parts.
Allfast also invited its suppliers so they could learn first-hand about Boeing’s quality requirements, and could look at other kinks in production flow. Officials from Kentucky-based Nichols Wire Inc., whose wire coils are the raw material from which Allfast makes its rivets, were among the suppliers on hand.
A new production system concentrates a number of machines dedicated to making only wing rivets into one corner of Allfast’s 108,000-square-foot production facility.
Engineers and others from Boeing, Allfast and Allfast’s suppliers pieced together a production schedule that would ensure rivets would “never sleep” meaning they would remain constantly on the production line, rather than sitting on a shelf waiting for the next step in production.
Now, Boeing and other aircraft manufacturers typically receive their rivets from Allfast within six weeks of placing their order, compared with the 10 weeks it used to take, Willey said.
The visit’s other objective was to develop a more formalized ordering system between Boeing and Allfast, and between Allfast and its suppliers.
Specific parameters were set on quality requirements, when and how each type of product would be ordered and when and how it would be shipped out. The system also called for more precise and timely forecasts from Boeing about the types and amounts of products it would need in the future.
Allfast expects to end 1997 with about $30 million in revenues, double its 1996 level, according to company President James Randall. Boeing accounts for about 50 percent of Allfast’s business while smaller commercial and private airplane makers account for the rest.