Boeing 2010 Annual Report Download - page 7

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focus
We also made three strategic acquisitions
in 2010 — bringing our total to 10 over the
past three years — to bolster our capa-
bilities in areas of increasing emphasis
to our government customers, such as
unmanned systems; cyber security;
services; and intelligence, surveillance
and reconnaissance.
The year-end backlog for Defense, Space
& Security was $65 billion — more than
twice its 2010 revenues — giving it solid
footing in what will remain a dynamic
business climate.
A More Disciplined Approach
Beyond our operational accomplishments,
we took additional action in 2010 to apply
lessons learned from our development
program experiences. While we acknowl-
edge that game-changing innovation in
this industry is never easy, we simply
have to do better in fulfilling our promises
to customers and delivering returns on
these investments.
Further strengthening the role and impact
of our engineering function was a prior-
ity in 2010. For example, we appointed
nine senior chief engineers — each with
expertise in a specific technical field—to
drive engineering excellence throughout
the company. These leaders monitor the
status of every Boeing program. They
reach across business units, get directly
involved in critical design reviews and
risk assessments, and help define system
requirements.
This back-to-basics approach includes a
disciplined, 11-step technical review pro-
cess now required for all new programs.
This rigorous process for identifying and
mitigating risks begins at the design
concept stage and continues all the way
through product delivery and support.
These actions — along with the steps we
have taken to strengthen leadership and
organization structures, increase visibility
and coordination across the supply chain,
and bring certain manufacturing and
engineering work back into Boeing — will
help ensure the disciplined execution that
has sustained this company for 95 years.
Moving Forward
Five years ago, we set out to unleash
the full potential of Boeing by increas-
ing growth and productivity, developing
better leaders, and reaffirming our values
through a more open and inclusive culture
built on trust and personal accountability.
Since then, we have made solid progress
on our journey to advance our global
leadership in aerospace.
With a clear-eyed view of the challenges
and opportunities we foresee ahead, we
have defined our priorities for 2011 and
onward to our 2016 centennial.
First and foremost, we must continue to
perform well on our core production pro-
grams and in our services businesses—
and maintain an enterprise focus on
improving productivity. Thanks to the
phenomenal work of Boeing employees,
we have increased productivity by ap-
proximately four percent annually over
the past four years, which has given
us the flexibility to continue investing in
fundamental innovation while weathering
market and program setbacks.
At Boeing Commercial Airplanes,
we must prepare now for increasing
global competition. Aircraft manufacturers
in several countries are poised to
challenge us for a share of the market
where we have been competing solely
against EADS/Airbus. These emerging
competitors see the same massive
economic opportunity in commercial
airplanes and related services that we do
over the next 20 to 30 years.
Our priorities for Commercial Airplanes
are: First, complete 787 and 747-8 devel-
opment and deliver both airplanes this
year. Second, steadily increase produc-
tion across all programs to deliver our
3,443-airplane backlog faster and open
more near-term delivery positions for sale
to customers who want new airplanes
sooner than we currently have them
available. Third, continue to leverage and
grow our commercial aviation services
business. And fourth, extend our lead in
product innovation and value with either
improvements to, or replacements of, our
737 and 777 families.
At Boeing Defense, Space & Security,
while global security threats remain high,
we foresee an extended period of flat to
declining defense budgets both in the
United States and Europe. Government
customers also are shifting more financial
risk to industry, such as through fixed-
price development contracts, and they
are allocating larger shares of funding
for new capabilities in unmanned
systems; intelligence, surveillance and
reconnaissance; logistics; and cyber
and infrastructure security.
That said, the markets we serve (including
in commercial satellites) are large and
global, and defense spending in certain
regions of the world is on the rise. Our broad
portfolio of reliable, proven and affordable
products and services is a big advantage
in tight budgetary times when customers
want better value for every dollar spent.
With that in mind, our Defense, Space
& Security priorities are: First, extend
and grow our core businesses. Second,