For decades now we have been relying on Delegated Quality Authority beginning with the FAA's oversight of Boeing. But it continues through the supply chain from Boeing to Spirit, Spirit to its suppliers, Boeing to its other suppliers, other suppliers at the top tier to suppliers at the lower tiers and so on. This process has allowed us to increase rates substantially and helped hold down costs.
If you are not familiar with Delegated Quality Authority, here is a brief explanation. When a supplier has Delegated Quality Authority, they will approve their own work and ship it to their customer without the customer coming in to the supplier’s facility to directly approve the work. The customer will rely on that supplier’s approval to introduce the part directly into their production process without further inspection. It is important to note that the same shift happened on the shop floor. You will undoubtedly hear during the Boeing negotiations with the IAM this year that they have delegated quality acceptance buyoffs to their operators on the shop floor and as a result laid off quality inspectors over the years. In fact, the industry as a whole has fewer quality inspectors than we had in the past. Early in my career, the quality mantra was “two sets of eyes on everything”. Over the years, it shifted to “build quality into the production process” and the second set of eyes was eliminated saving time and money. In the process, we reduced the number of quality inspectors in the industry as a percentage of total workforce.
It might be worth noting that the headlines are about problems in production at Spirit and Boeing, not at other subtiers. It is possible that the change discussed above is limited to them. I think that is unlikely because the focus will be on the efficacy of the process itself. Boeing and Spirit will find it difficult to credibly say that the same problems do not extend into their supply chain without direct inspection.
Unfortunately, there is not a cadre of trained aerospace quality engineers sitting idle just waiting for this opportunity. Adding all that direct oversight, while improving quality, will increase costs and slow production. Again, I am not saying this is a bad idea, but pointing out that this impacts more than the 737MAX. The FAA's mandate that Boeing cannot increase production can be lifted at any point in time. But if the sea change in the quality process that they are signaling takes place, it will be difficult to increase production even if it is lifted. Finally, there is the question of who will pay for it? In the era of Delegated Authority, it is common for the supplier to have to pay for source inspection by the customer. The current contract prices are structured without that cost being borne by the supplier.
Cliff Collier
February 5, 2024
