Strengthening Safety & Quality

Strengthening Safety & Quality

Introduction

On Jan. 5, 2024, one of �Ӱ��Ƶ’s valued airline partners took off on what should have been a routine flight for the 171 passengers and crew. Shortly after the 737-9 took off, a structural element known as a mid-exit door (MED) plug departed the left side of the airplane, leading to a rapid decompression. The pilots and cabin crew responded with skill and professionalism, bringing the airplane and everyone onboard safely back to the ground.

In the weeks and months following the accident, our team cooperated fully with the U.S. National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA) in their investigations. The NTSB’s preliminary report noted that it appears four bolts designed to keep the 737-9’s MED plug in place were not installed after the plug was opened in our factory. �Ӱ��Ƶ leaders acknowledged that we are accountable and cannot allow an event like this to happen with one of our airplanes.

Our Safety & Quality Plan

Since January, �Ӱ��Ƶ took immediate containment actions to ensure the safety of our 737-9s. We also slowed production and took a disciplined look at every facet of our production operations. We listened to our employees, engaged transparently with our regulator, welcomed the findings and recommendations from the FAA's Aircraft Certification, Safety and Accountability Act (ACSAA) panel review, and invited scrutiny from customers and independent experts. Based on that feedback and oversight, we developed a comprehensive plan to strengthen �Ӱ��Ƶ's safety management, quality assurance and safety culture.

�Ӱ��Ƶ’s Safety & Quality Plan addresses several improvement areas with actions that generally align to four focus areas: investing in workforce training, simplifying manufacturing plans and processes, eliminating defects, and elevating our safety and quality culture, along with measures to continuously monitor and manage the health of our production system.

We are fully committed to this plan and to continuous improvement, which has helped make commercial aviation the safest mode of transportation. We will work under the FAA's oversight and uphold our responsibility to the flying public to continue delivering safe, high-quality airplanes.

(For a more detailed summary of our Safety & Quality Plan, click below)

Safety & Quality Plan Executive Summary

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Highlighting enhancements throughout 737 MAX Final Assembly

INVEST IN WORKFORCE TRAINING
SIMPLIFY PLANS & PROCESSES
Eliminate non-conformances and supplier defects
ELEVATE SAFETY & QUALITY CULTURE

Examples include:

Implementing enhancements to training for new manufacturing and quality employees resulting in them receiving up to two more weeks of foundational training, followed by enhanced structured on-the-job training (SOJT).
Added over 300 hours of coursework across multiple skills for new mechanics and inspectors as well as any employee who needs or requests additional training. This material includes new courses on SMS Positive Safety Culture, regulatory and process compliance, critical production skills, and quality-focused topics.
Deployed workplace coaches and peer mentors onto the factory floor to provide oversight and support for mechanics and inspectors.
Implemented enhanced training for existing manufacturing and quality employees to ensure they continue to be proficient with safety, quality, and compliance requirements.

Examples include:

Began assessing key Quality Management System (QMS) command media to remove redundancies, eliminate possible contradictions, and create a simpler architecture that is easier to understand, apply and navigate.
Started simplifying and clarifying work instructions to provide mechanics and inspectors ready access to all relevant information for performing their tasks.
Audited the design-build process for critical 737 structures/systems and incorporating the resulting improvements. The design-build audits will be performed on critical structures and systems on all airplane programs.
Introduced mandatory removal training across all programs and tightened restrictions in the Common Manufacturing Execution System (CMES) on who can initiate removals.
Developed specific modifications to company policy and procedures to drive consistency and repeatability in the stamping process and deployed simplified training .
Streamlined IT systems and internal programs to make it easier for mechanics to access drawings online.

Examples include:

Enhancing control plans to reduce Foreign Object Debris (FOD), strengthen management of tools and materials and ensure employees adhere fully to work instructions.
Centralized responsibility for work-in-progress (WIP) racks and enhanced the tracking system for parts and materials to ensure proper labelling and mitigate loss.
Leveraging data analytics and enhancing supplier oversight and collaboration to strengthen the quality of parts coming into �Ӱ��Ƶ’s factories.
Instituted a new inspection protocol by �Ӱ��Ƶ personnel of 737 fuselages before they are shipped from our supplier to �Ӱ��Ƶ’s Renton facility. The initial fuselages shipped under this program have shown up to 80 percent fewer defects per unit.
Implementing similar protocol with suppliers of other parts and assemblies as we tighten the criteria for accepting incoming parts.

Examples include:

Accelerating deployment and awareness of our Safety Management System (SMS) across our production environment to identify and mitigate product safety hazards
Encouraging our team to use our ‘Speak Up’ portal to raise, report and mitigate potential hazards. Promotion of the tool has resulted in a more than 500% increase in submissions during the first two months of 2024 compared to the same period in 2023.
Re-launching Employee Involvement teams to conduct weekly problem-solving sessions and review employee ideas for improving the production system at the working level.
Launched a “move ready” process where 737 airplanes may not move to the next factory position until identified build milestones are completed – unless a Safety Risk Assessment (SRA) is conducted, and a mitigation plan is in place. This process will deploy across the other airplane programs in the future.
Conducted Quality Stand Downs across more than 20 �Ӱ��Ƶ Airplanes sites, where more than 70,000 employees shared ideas, concerns and suggestions for improving safety and quality.
Integrating our Safety Management System (SMS) and Quality Management System (QMS) such as implementing SMS triggers and enhanced safety review boards into the QMS to better identify production safety risks, track those risks and drive mitigating action.

Key Performance Indicators (KPIs)

A significant component of our Safety & Quality Plan is the identification of six key performance indicators (KPIs) focused on safety and production health:

•��Employee proficiency measures share of employees who are deemed proficient in core skills.
•��Notice of Escape (NoE) rework hours measures time performing rework in �Ӱ��Ƶ’s final assembly facilities to address non-conforming work from �Ӱ��Ƶ Fabrication and external suppliers.
•��Supplier shortages measures shortages per day from �Ӱ��Ƶ Fabrication and external suppliers.
•��Rework hours per airplane measures time spent performing rework in �Ӱ��Ƶ’s Final Assembly facilities.
•��Travelers at factory rollout measures unfinished jobs traveling from Final Assembly
•��Ticketing performance measures quality escapes per ticketed airplane prior to delivery.

Each KPI also has defined criteria that will trigger corrective action and SMS risk monitoring.

The KPIs have been established and operationalized across BCA programs. These KPIs will provide real-time insights into production system health, enabling the Company to identify and remediate potential quality and safety hazards before they fully mature. They also will aid in monitoring tangible improvements from the Product Safety and Quality Plan and ultimately serve as an important indicator of system readiness for potential future rate increases.

Aircraft Certification, Safety, and Accountability Act (ACSAA)

In line with the plan above, we have developed detailed plans and deliverables for each recommendation from the FAA’s Expert Review Panel, which was convened per the Aircraft Certification, Safety, and Accountability Act (ACSAA) of 2020. We have already adopted some of the panel’s recommendations and are working to implement the rest to enhance �Ӱ��Ƶ’s safety culture, our Safety Management System (SMS), Quality Management System (QMS), and Organization Designation Authorization (ODA). Our actions fall in the following areas

Taking actions to deepen leadership and employee alignment to a positive safety culture, conducting improved safety culture assessments, and enhancing safety training and reporting mechanisms. These actions focus on simplifying employee guidance and ensuring employees understand their part in �Ӱ��Ƶ’s safety culture.

In addition to the actions on SMS as noted above, we are taking steps to reinforce the understanding of SMS’s basic pillars and each employee’s role in implementing the SMS, and to implement additional safety metrics and spread awareness of those metrics throughout the workforce.

Continuing efforts to strengthen �Ӱ��Ƶ’s ODA system to foster greater independence, advocacy, and recognition. These efforts build off the success of the Company’s recent restructuring of the Engineering Unit Member organization. Ongoing initiatives in this area include further restructuring the ODA management system, enhancing support for unit members at small and remote sites, and implementing additional changes to address interference and retaliation concerns.

Implementing initiatives to elevate and enhance the influence of the discipline of human factors, such as the creation of an enterprise-wide Human Factors Chief Engineer position, and to increase the voice of pilots in design decisions.��

Latest Updates

***�Ӱ��Ƶ President and CEO Kelly Ortberg shared the following message with all employees***

Team,

I can’t tell you how proud and excited I am to be a member of the �Ӱ��Ƶ team. While we clearly have a lot of work to do in restoring trust, I’m confident that working together, we will return the company to be the industry leader we all expect.

Restoring trust starts with meeting our commitments -- whether that’s building high quality, safe commercial aircraft, delivering on defense and space products that allow our customers to meet their mission, or servicing our products to keep our customers running 24/7. It also means meeting our commitments to each other and working collaboratively across �Ӱ��Ƶ to meet our goals. People’s lives depend on what we do every day, and we must keep that top of mind with every decision we make.

Because what we do is complex, I firmly believe that we need to get closer to the production lines and development programs across the company. I plan to be based in Seattle so that I can be close to the commercial airplane programs. In fact, I’ll be on the factory floor in Renton today, talking with employees and learning about challenges we need to overcome, while also reviewing our safety and quality plans. Soon I’ll be visiting many of our sites and I look forward to meeting with teammates around the world.

In speaking with our customers and industry partners leading up to today, I can tell you that without exception, everyone wants us to succeed. In many cases, they NEED us to succeed.�� This is a great foundation for us to build upon.

I will be transparent with you every step of the way, sharing news on progress as well as where we must do things better. You’ll begin to see routine report outs from me through email and our BNN channel, giving you timely updates of what I’m seeing and hearing on the ground from our teammates and our stakeholders.

Throughout my career in aerospace over the last three decades, I have had the pleasure to work with The �Ӱ��Ƶ Company and I’ve always been impressed with the great employees here. We have what it takes to win, and I’m committed to working with you to focus the company in a way that makes us all proud to be a part of �Ӱ��Ƶ.

Thanks for your support and I’m excited to dig in!

Best,

Kelly

�Ӱ��Ƶ's President and CEO Dave Calhoun testified before the U.S. Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations.

Statement from Dave Calhoun, President and CEO, �Ӱ��Ƶ:��“After the Jan. 5 accident involving a 737 airplane, we took immediate containment and mitigation actions to ensure airplane safety. We also made the decision to slow production as we took a hard look across every facet of our operations. We listened to our employees, engaged transparently with our regulator, welcomed the findings and recommendations from the FAA’s ACSAA panel review, and invited scrutiny from customers and independent experts. Based on that feedback and oversight, today we presented to the FAA our comprehensive plan to strengthen our safety management, quality system, safety culture and ODA responsibilities.

Many of these actions are underway and our team is committed to executing on each element of the plan. It is through this continuous learning and improvement process that our industry has made commercial aviation the safest mode of transportation. The actions we are taking today will further strengthen that foundation.

We thank Administrator Whitaker and the FAA team for their feedback today and we will continue to work under their oversight as we move forward.”

Statement from Stephanie Pope, President and CEO, �Ӱ��Ƶ Airplanes: “Our plan is built on the feedback of our employees who know best how to design, build and deliver safe, high-quality airplanes. We also incorporated the requirements and feedback from our regulator and welcomed the recommendations from our customers and industry experts.

Based on that feedback, our roadmap includes major investments to expand and enhance workforce training, simplify manufacturing plans and processes, eliminate defects at the source, and elevate our safety and quality culture, along with specific measures to monitor and manage the health of our production system. ��

We are confident in the plan that we have put forward and are committed to continuously improving. We will work under the FAA’s oversight and uphold our responsibility to the flying public to continue delivering safe, high-quality airplanes. We are also grateful for our customers’ patience as we implement this plan and return to predictable deliveries.”

***This message is to all �Ӱ��Ƶ Airplanes employees.***

Team,

On January 5, a mid-exit door plug departed one of our 737-9 airplanes mid-flight because of a quality escape that occurred in our factory. We immediately took actions to contain that risk to ensure an accident like that does not happen again. In the months since, we have slowed production to examine every aspect of our airplane production system and develop actions to strengthen our safety management, quality system and safety culture. Today, we submitted a comprehensive action plan to the U.S. Federal Aviation Administration.

As we shared during our All-Team Meeting last month, our Safety & Quality Plan is built on your feedback, along with recommendations from an FAA industry panel, our customers and industry experts, all under the requirements and oversight of our regulator.

Our plan includes actions that fit within four categories with specific measurements to continuously manage the health of our production system.

Invest in workforce training
Simplify plans and processes
Eliminate defects
Elevate safety and quality culture

Many of these actions are underway, again powered by your engagement and feedback:
��

You said	We did
Investments in training ��	✔�� Added ~300 hours of training material ✔�� Deployed workplace coaches and peer trainers onto the production lines
Simplification ��	✔�� Cut the steps it takes to access build plans ✔ ��Began simplifying 400 quality-related command media to remove redundancies, contradictions ✔�� Cleared more time for managers to spend on factory floor through fewer meetings, tasks
Eliminate defects ��	✔�� Implemented quality inspection and approval of 737 fuselages before shipment from supplier ✔�� Re-established daily compliance sweeps
Safety and quality culture ��	✔�� Pilot program to make sure airplanes are “move ready” as way to manage traveled work ✔�� Re-launched Employee Involvement Teams ✔�� Ordered ~7,500 pieces of tooling and equipment

This is a journey, and we will keep taking action. It is through continuous learning and improvement that our industry has made commercial aviation the safest mode of transportation. We are committed to continuously improve as we build our �Ӱ��Ƶ, working every day to deliver airplanes to our customers that are safe, high-quality and on-time.

Please continue to speak up, and we will work the issues and share updates. We will succeed as a team and execute with safety, quality, and compliance in everything we do.

Stephanie

In late February, we paused training for our new Manufacturing and Quality hires for about six weeks to assess how we could better prepare teammates. We then made substantial improvements to our training program based on feedback from employees, the FAA, as well as a review of industry best practices.

Here are some of the changes we’ve made for employees across �Ӱ��Ƶ Airplanes:

Expanded workforce training and proficiency

New hires in Manufacturing and Quality continue to start in our Foundational Training Centers. Now, each new employee receives 10 to 14 weeks of foundational skills training before moving to the production floor, which is one to two weeks more on average per teammate. We provide more time and support for those who need it.

New hires are then paired with a workplace coach or peer trainer on the factory floor for structured on-the-job training (SOJT) and won’t work on their own until they demonstrate established proficiency measures.

Teammates already on the production floor prior to these improvements are required to take proficiency assessments.

Investments in training

We’re transitioning to a digital record-keeping platform for new employees. This paperless system helps trainees track and formally document their progress while allowing leaders to verify who’s ready for a particular job and who needs more attention and training.

In our Renton Foundational Training Center, we installed a section of 737 fuselage for employees to practice various skills including wiring installation and identifying potential defects.

“All of these changes together are building relationships and a support network, so that employees are more able to ask for help, having a system surrounding them to help them through the training process.” — Kim Pastega, vice president of �Ӱ��Ƶ Airplane Manufacturing & Safety

An aircraft test technician trainee (left) practices working on a section of fuselage from a retired 737 alongside an employee development specialist at �Ӱ��Ƶ’s Foundational Training Center in Renton, Wash.

During the Annual Meeting of Shareholders, �Ӱ��Ƶ President and CEO Dave Calhoun discussed near-term and long-term actions the company is taking to strengthen safety, quality and company culture. Listen below and read the full remarks here.

Since January, more than 70,000 �Ӱ��Ƶ �Ӱ��Ƶ Airplanes teammates across the company have paused production and delivery activities for a day to focus on ways to improve safety and quality. Based on the employee feedback provided, our top areas of focus include training, processes, defects and culture.

Employees at more than 20 sites in the U.S., UK, Canada, and Australia have participated in stand downs. The sessions have generated more than 35,000 employee comments, with common themes like obstacles in their work, ideas and suggestions to improve.

All submissions get categorized, prioritized and reviewed for action. We’ve systematically addressed thousands of comments and suggestions; teams are working through the entire list including many that will be included as part of our Safety and Quality Plan (90-day plan) that we will submit to the FAA at the end of May.

A few examples include:

Training: We have added new training material for manufacturing and quality roles that averages about 20-50 more training hours per employee, depending on work scope.
Tooling: To help teammates better do their jobs, more than 7,000 new tools and other equipment have been provided across commercial airplanes programs.

In recent �Ӱ��Ƶ �Ӱ��Ƶ Airplanes employee meetings, leaders talked about these changes and what’s ahead:

“We want our teammates to know their voices are heard, and that we are taking action to address their improvement ideas. Ensuring the safety and quality of our products and services requires a full team effort. Our customers, our company and the flying public depend on it.”– Elizabeth Lund, BCA Quality senior vice president and Quality Operations Council chair

“When we find issues, we go as far as standing down a team to make sure that everybody on the team or everybody in the area is aware of the issue. It's not meant to be punitive [and] we share the information across the programs, from the 737 to the 777 to the 787 to the 767.” – Mike Fleming, BCA Airplane Programs and Customer Support senior vice president and Program Management Operation Council chair

previous updates

Examples of Progress

Wiring training introduced on 787 program

July 19, 2024

The 787 Dreamliner has 60-70 miles of wires. Our team introduced a new wire bundle training for incoming 787 teammates to ensure that anyone working in the airplane – regardless of their role – is familiar with the basics of wiring and understand how to safely work with or around them.

Employees prevent repeat defects by updating installation plan

July 10, 2024

When an ill-fitting O-ring was discovered on a P-8 prior to delivery, �Ӱ��Ƶ engineers, mechanics and factory leaders worked together to identify the root cause of the issue. Our team discovered that two similar O-rings used near each other were easily confused, so they rewrote the installation plan in question to better identify – and keep separate – the two O-rings. There have since been no related defects found.

Fabrication teams improve part protection to minimize damage

July 8, 2024

�Ӱ��Ƶ's Fabrication teams are making improvements to how they store and transport parts to increase quality and stabilize airplane production. From adjusting cart designs to fortifying part protection measures or working with suppliers on packaging protection, the goal is to reduce damage, create safer working environments and streamline processes.

New guide raises consistency, first-pass quality in drilling process

June 20, 2024

An employee spoke up, triggering a quick improvement that helped standardize the work and inspections for drilling holes in small metallic fillers. These half-inch square pieces known as ‘radius fillers’ have holes drilled in the center to serve as a type of washer, but the task was difficult to execute with precision. A new drill guide was produced, and a new process was documented in the build plan, increasing efficiency, and improving first-time quality.

Additional training reinforces compliance in part removal

June 11, 2024

�Ӱ��Ƶ has been enhancing the steps employees must take to remove or loosen airplane parts during production. In addition to proficiency testing, a removal history audit and the Quality team’s required approval, mechanics are required to take a new “When and Why” training to initiate a removal and ensure proper documentation.

New tool delivers first-pass quality for interior elements

June 7, 2024

A 3D-printed tool, designed by a �Ӱ��Ƶ employee, has eliminated scrap and improved first-pass quality on placard installations for airplane interiors. Teammates install placards, which are transparent markers with adhesive that contain directives, onto curtain tracks. A new placard insert tool allows teammates to seamlessly lay the placard down onto the curtain track without needing to touch the adhesive, reducing residue or fingerprints on the adhesive.

New tracking system helps prevent part loss

May 23, 2024

Barcoded labels are part of a pilot project helping the 737 team track parts with greater accuracy, reducing frustrating delays in finding the parts needed to complete jobs on the production line. Since mid-April when the pilot began, teams are able to locate parts in minutes instead of hours. Another advancement is the overhaul of the work-in-progress (WIP) racks where parts are stored. These racks have been made to move along with an airplane as it goes through the assembly process.

Reducing clicks to access build plans

May 22, 2024

Accessing the engineering drawings and installation plans required for our mechanics to build the airplane has gotten much simpler, thanks to the efforts of the �Ӱ��Ƶ Information Technology (IT)�� team acting in response to feedback from employees. ��Previously, as many as 10 clicks across multiple programs could be required by a mechanic to access the necessary documents. Implemented improvements have cut that time in half and eliminated the need to access multiple systems.

Paperless program to improve on-the-job training in factories

May 15, 2024

A new digital platform will eliminate the need for paper training records and improve overall training on the 737 program. Individual training packets can be up to 60 pages long and are difficult to keep track of over the course of the roughly 90-day structured on-the-job (SOJT) training program. In the new digital system, an online application helps trainees track and formally document their progress, while leaders can verify who is ready for a particular job and who needs more attention and training.

737 pilot program helps safely manage traveled work

May 29, 2024

Through a safety risk assessment process, �Ӱ��Ƶ aims to perform more jobs in sequence and keep production lines moving to predictably deliver safe, high-quality jets to customers. As part of this pilot project, new signage is hung in 737 production areas to help teams make sure airplanes have critical jobs completed before they are considered “move ready.”�� Ӱ��Ƶ is using its Safety Management System (SMS) to identify and mitigate hazards that could be disruptive to production, and employees play a key role by raising their concerns through the Speak Up portal and other means.

New training model provides employes more skills, support

May 9, 2024

To strengthen the training pipeline, �Ӱ��Ƶ has invested in about 300 hours of new curriculum resulting in new manufacturing and quality employees receiving up to two more weeks of foundational training, followed by enhanced its on-the-job training with more hands-on learning and mentoring from workplace coaches and peer trainers.

Everett flight line teams implement critical inspections

May 11, 2024

�Ӱ��Ƶ Quality and Engineering teams implemented a new process where they perform additional inspections of nine critical build areas of widebody airplanes during the airworthiness inspection process. The new process is part of an effort to eliminate quality defects and ensure �Ӱ��Ƶ continues to deliver safe, high-quality airplanes.

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Safety

Chief Aerospace Safety Officer Report

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