Boeing 2012 Annual Report Download - page 7

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5
The Way Ahead
The priorities we defined two
years ago for achieving sustained
growth and continued global
leadership in aerospace are
increasingly relevant today.
Shifting market dynamics have
our customers demanding more
capability and greater efficiency in
our products and services, but at
lower costs. While we have made
considerable progress in improv-
ing affordability in recent years,
this new reality requires us to do
even more—and do it faster.
To this end, we are pursuing
three new enterprise initiatives: a
“Partnering for Success” program
with our top suppliers to jointly
drive significant improvements in
quality, flow and efficiency within
the supply chain; a determined
effort to reduce the spiraling costs
of product development; and a
strengthening of our culture with
regard to workplace safety, with a
goal of eliminating injuries on the
job and improving the health and
productivity of Boeing employees.
Through these initiatives—along
with our ongoing focus on
disciplined execution, productivity
improvements to continuously
fund innovation and effective
management of our risks—I am
convinced that our team can
compete, win big and fulfill our
customers’ expectations in a
more-for-less world.
At Boeing Commercial
Airplanes, our immediate imper-
ative is to return the 787 fleet to
service and resume production
deliveries to customers. Our
overall focus for 2013 is to con-
tinue harvesting the growth in our
backlog by delivering the airplanes
our customers need sooner,
enabling us to invest proceeds
from those sales in sought-after
additions to our product family
that will ensure our long-term
growth and competitiveness.
Progress on the development
efforts we are funding continues
at a disciplined pace as we apply
lessons learned on the 787 and
other programs. The 787-9 is in
early-stage assembly, with final
assembly to begin in mid-2013
and first delivery expected in early
2014. Development of the single-
aisle 737 MAX also is on plan for
first delivery in 2017. The case
for launching the 787-10X this
year has strengthened based on
recent discussions with our cus-
tomers. We also have made good
progress in assessing customer
requirements for improvements
to the market-leading 777 to
ensure this signature franchise
maintains its advantage over
competing products.
With that in mind, our 2013
priorities for Commercial Airplanes
are: successfully and profitably
ramping up production rates to
deliver our 4,373-airplane backlog;
executing our 787-9 and 737 MAX
development efforts on plan;
finalizing the business cases for
launching the 787-10X and 777X
programs; and continuing to grow
our services business.
At Boeing Defense, Space &
Security, despite ongoing budget
pressures, the United States
remains the largest market for our
products and services. We believe
we are as strongly positioned
within that market as any of our
competitors.
While the U.S. budget sequestra-
tion creates added uncertainty at
the time of this writing, growing
international markets; unmanned
systems; cyber security; and
intelligence, surveillance and
reconnaissance markets continue
to offer meaningful growth op -
portunities. Over the near- to mid-
term we expect revenues in this
segment to remain relatively flat,
with international sales growing
consistently as a share of the total.
Fortunately, we anticipated
these pressures and have been
making the necessary changes
to compete effectively. We have
proactively reduced our cost
structure to make our products
and services more desirable
than competitor offerings. In the
past two years, we have reduced
costs by $2.2 billion through
targeted facilities consolida-
tions, reductions in executive
NASA’s Space Launch
System is the nation’s
next heavy-lift rocket
for human space flight.
Boeing is designing,
developing and produc-
ing its core rocket stage
and avionics system,
and in 2012, delivered
six flight computer test
beds, the first critical
element for developing
flight soft ware controls
for the launch vehicle.
The dual-feather
Advanced Technology
Winglet for the 737 MAX
will be more efficient
than any other wingtip.
It will deliver a fuel-burn
improvement of more
than 1.5 percent,
in addition to the
4 percent fuel-burn
advantage that today’s
wingtip technology pro -
vides at long ranges.