Let’s Talk about Boeing and Supply Chain Relationships

A little over two years ago, students in the Foster Master of Supply Chain Management Program took an executive tour of the Boeing factory located in Everett, Washington. More recently in a Supply Chain Leader Series (SCM 599) class session, Jody Franich—a Foster alumnus and  Supply Chain Vice President at Boeing*—joined our students via Zoom to answer their Boeing supply chain questions. Jody is also a longtime supporter of the Foster MSCM program and serves on the program’s advisory board.* Keep reading below to see what our students learned from him.

About Jody Franich

Upon graduating from Foster’s undergraduate program, Franich started out at Boeing as a Procurement Agent, and as result worked in what’s known as the indirect supply chain. Typical duties of procurement agents include acquiring goods and managing supplier relations for clients. “The first thing I ever did [at Boeing] was negotiate a suggested price down by half. I thought to myself I am adding value, and since then I’ve been a supply chain guy through and through.”

Supply Chain is about Relationships

Saying Boeing has a large and complex supply chain would be an understatement. According to Franich, about 80% of Boeing’s supply expenditures are locked up in about 10 suppliers, with the other 20% going to about 11,000 much smaller, yet still significant suppliers. Boeing’s long tail in its suppliers is partly due to a company effort to work with small and minority-owned businesses. “It’s the right thing to do,” states Franich.

This interconnected web of suppliers is managed by Boeing and its employees through consistent communication and the sharing of technology road maps. “When you think of corporate America a lot of it comes down to relationships,” Franich explains.

A true testament to Boeing’s strong relationship with its collaborating companies shines through an anecdote shared by Franich—Boeing had batteries in China that needed to make it to the U.S in a time-sensitive manner, and at a moment’s notice FedEx shipped them to California within 24 hours!

Managing the Risks

Just like any relationship, supply chain relationships also come with risks. The COVID-19 pandemic has brought many of these risks, ranging from geopolitical to economic issues, to the forefront. In these unprecedented times, Boeing manages these risks by keeping a close eye on the financials of some of its key suppliers and running data analyses. Lucky for Boeing, the aerospace industry largely conducts business in U.S. dollars, even Airbus, a European aerospace company that is one of Boeing’s major rivals, conducts business in U.S. dollars.

Lastly, Boeing is always looking for new supply chain leaders to come and join them in their mission of creating increasingly diverse and transparent supply chains. “We need individuals that can work across suppliers, work across companies, and work across countries; that’s a rare balance to find,” Franich concludes.

If that sounds like you, learn more about the Foster MSCM program and you too can one day gain the skills and tools required to be a part of the future of supply chain.

*Jody Franich has since retired and is now a former Boeing Supply Chain Executive and MSCM advisory board member.