2018 A&DSS

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BCA Supply Chain

Lindsey Douglas,Vice President, Contracts and Sourcing

BCA Supply Chain

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2018 A&DSS

Airlines will need 41,030 new airplanes valued at $6.1 trillion

NOTE: Market share may not equal 100% due to rounding

Market value: $6,050 billion2017 - 2036

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Regionaljets2%

Single-aisle53%

Small paxwidebody

22%

Freighters

4%

Med/Lg paxwidebody

19%

$110B

$3,180B

$1,340B

$260B

$1,160B

Airplane deliveries: 41,0302017 - 2036

0

5,000

10,000

15,000

20,000

25,000

30,000

Regionaljets6%

Single-aisle72%

Small paxwidebody

12%

Freighters

2%

Med/Lg paxwidebody

8%

2,370

29,530

5,050

9203,160

2

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2018 A&DSS

Open demand is there… more than 65% left to sell2017-2036

Solid shading = backlog, light shading = market opportunity (freighter also includes conversions)

SOURCE: Ascend backlog as of 5/31/2017

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2017-2036

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2018 A&DSS

Today’s marketplace is highly competitive

Aggressive competition

▪ Traditional competitors

▪ Emerging competitors

Customers want “more for less”

▪ Affordable and mission-capable

▪ Low operating cost

▪ In-service reliability

▪ Standardization, first-time quality

▪ Environmentally progressive

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2018 A&DSS

Boeing Commercial Airplanes production rates~80% increase from 2011 through 2019

As of: 1/24/18

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2018 A&DSS

Boeing will not be successful if our supply chain partners are not successful

BoeingSuppliers

400thousand parts

3.1million parts

2.3million parts

3million parts

6million parts

$43 billion spend ● 5,400 factories ● 500,000 people

767 787 777 747-8737

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2018 A&DSS

Procurement Categories

Boeing categories present opportunities across the corporation

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Major assemblies

Body sections

Movable wing

sections

Doors

Flight Control Surfaces

Fuselage

Structures

Passenger Seats

Cabin Systems

Galley Inserts

Interiors

Cargo Systems

Interiors

Avionics

Flight Systems

Hydraulics

Wheels & Brakes

Landing Gear

Environmental Control

Systems

Electrical Systems

Systems

Materials Management & Spares

Technical & Engineering Services

Customer Support

Internal

Non-Production

Services

Machined parts

Sheet metal parts

Assemblies

Tubing

Wiring

Tooling

Raw materials

Standards

Common

Commodities

Engines

Struts

Nacelles

Propulsion

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2018 A&DSS

Finding the right opportunities in the supply chain

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1,500 Tier 1 Suppliers 5,000+ Subtier Suppliers

Tier 1Tier 2Tier 3

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2018 A&DSS

Finding the right opportunities in the supply chain

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1,500 Tier 1 Suppliers 5,000+ Subtier Suppliers

Tier 1Tier 2Tier 3

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2018 A&DSS

Performance requirements are the same across the Boeing supply chain

Supplier factories are an extension of Boeing

DisciplinedOperational

Rhythm

Visibility And

Execution

Manage Risk and

Opportunity

ContinuousImprovement

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2018 A&DSS

Partnering for SuccessAffordability focus areas

BCA SM

Cost Down

Leadership

Achieve

First Time

Quality

Design

Cost Out

of Our

Products

Supply

Chain

Architecture

Competition,

Commercial

Rebalancing,

& Volume

1st Time Quality

Quality parts

Rate readiness

Design Cost Out / Lean+

Value Engineering

Accelerated Opportunity Capture

Supply Chain Architecture

Value creation / innovation

Strategic sourcing

Competition / Commercial

Rebalancing / Volume

Risk / Reward

Statement of work adjustment

11

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2018 A&DSS

Expectations for Boeing SuppliersWe need suppliers that look toward the future with us

Suppliers should:

▪ Do their homework and understand the benefits of working with Boeing

▪ Share our commitment to excellence

▪ Focus on improving affordability and efficiency

▪ Share knowledge and innovation

▪ Provide visibility into the extended supply chains

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2018 A&DSS

Our futures are inextricably linked

▪ High performance / quality

▪ Increased efficiency / affordability

▪ Customer focused

▪ Innovation

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2018 A&DSS

14

Questions?

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