Balancing act

Sound R&D strategy has Boeing poised for competitive future

BY DEBBY ARKELL

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Research and development is alive and well at The Boeing Company. At the links above are some advanced technologies the talented technologists, mathematicians and engineers at Boeing are using.

Decisions, decisions. Business leaders and employees make millions of them every day. Among the most crucial Boeing must make are decisions related to remaining competitive today, tomorrow and well into the future.

Corporate investment in the right technologies and processes, at the right time, is critical to a company's success. Boeing actively plans its research and development investments in technology in a way that will maximize potential returns, fueling the company's top- and bottom-line growth.

Boeing Chief Technology Officer Jim Jamieson said the decisions on what specific technologies and processes Boeing will pursue are based on a balanced combination of available company funding and other resources, and degree of immediacy of need. Through this analysis, Boeing strives to get the most from the money it invests in R&D—a percentage that company leaders say strikes the proper balance between investing in the future and delivering shareholder returns.

"Each year Boeing invests about 4 percent of the company's overall revenue in research and development , amounting to more than $2 billion," Jamieson said. "This investment, along with the amount we receive for contract R&D each year, provides Boeing with a very healthy R&D program by industry standards."

Boeing distributes its R&D investments carefully among the business units, Phantom Works and enterprise initiatives. The business units focus primarily on their near-term needs for product and process development and improvements; Boeing's centrally managed advanced R&D unit, Phantom Works, focuses on providing systems and technologies that will benefit products across all the business units—both in the near and far term.

Likewise, the enterprise common processes and systems initiative is designed to help business units and functions of the company work together more efficiently and on a global scale.

"The big challenge in all this is to maximize our leverage with every R&D dollar we spend," Jamieson said. "This means understanding what our short- and long-term business objectives are, investing in technologies and processes required to achieve them, and sharing what we learn with others in the company."

To aid in determining how company funds are allocated for R&D, Boeing uses a technology prioritization process to determine what will be worked on. Bob Krieger, president of Phantom Works, said this process begins when Commercial Airplanes and Integrated Defense Systems leaders evaluate what technology needs they have and share this information with Phantom Works.

"We take a look at needs that might be common to both groups," Krieger said. "This helps us determine what we'll focus on because, as with any situation, there are always more needs than money, time and resources. By working with our business unit partners, we gain new knowledge about how to develop technologies so that they can be adapted to fit the various product-line requirements across Boeing."

Boeing leaders in the business units—including John Tracy, IDS vice president of Engineering, Vice President of Product Development Dan Mooney and Vice President of Technology Development Charlie Higgins in BCA—create a linkage between key programs and developers. That essentially creates a discussion loop, to ensure the business unit needs are clearly translated, understood and met by the teams working on the new technologies.

"Boeing is ultimately more efficient in its research and development because of its focus on common technologies," said Tracy. "Money Boeing invests in research often benefits more than one program."

In general, Boeing's research and development funds are spread out across a variety of programs and initiatives. Some R&D activities are business-unit specific, such as new tooling to support the 737 program or the Joint Unmanned Combat Air System.

Others are joint-development or common programs, such as research related to composite structures and approaches to composite manufacturing, new metallic processes to improve alloys, or open systems architectures. And some are more advanced technologies, such as those for hypersonic flight, robotic maintenance satellites, and nanotechnologies—technologies that work at the molecular or atomic level.

All Boeing research and development work falls somewhere within three time horizons: First, leaders across the business units identify what capabilities they need in their products to remain competitive in the near term (one to three years in the future) and then receive a percentage of company revenues to develop these new or derivative products. Business units take the lead and Phantom Works provides support through its nearer-term work in its "thrust" technologies. Today, for instance, Commercial Airplanes and Phantom Works are working on a combined total of nearly 1,000 technology milestones in support of the 787 Dreamliner.

"BCA R&D investments are primarily focused on market-driven products and services," Mooney said. "A new product offering like the 787 means placing a big bet," adding that although Boeing studies many different ideas and concepts, leaders want to be confident that the products developed will be a commercial success for both Boeing and its customers before placing such a bet. "BCA relies on Phantom Works to develop concepts and technologies that will enable products beyond the foreseeable future."

The next time horizon is focused on creating and implementing tomorrow's technologies in next-generation products. In Phantom Works, much of this research is performed in the advanced systems organizations where, for example, next-generation autonomous systems are being developed for IDS. The results of this research might be ready to be transitioned to the businesses in three to seven years.

"Phantom Works is a business unit designed to be on the leading edge of technology, with an emphasis on taking risks in developing and testing new technologies," said Krieger. He noted that not all technology developments are successful, but it is better for Phantom Works to discover problems before the business units apply the technology in their products. "Our role is to mature these technologies so they can be transferred to the business units, where they'll be implemented with low risk and continue the revenue-generation cycle."

Finally, Phantom Works looks out seven to 20 years in research areas called enabling technologies and "White Space." Enabling technologies often don't have a connection to a product yet and are further out from production or implementation. White Space research is focused on developing concepts that have even more distant future potential. A personal transportation system involving flying "cars" is just one example of a potential business opportunity that would fill a white space between today's business units.

Processes and people

Another part of Boeing's technology strategy focuses on such corporate initiatives as the development and deployment of common processes and systems.

"We are pursuing our vision of being able to design and build anywhere around the world and around the clock, in the most efficient and effective way possible," Jamieson said. "This means identifying and establishing a core of common processes and systems that all of our engineering, business and administrative personnel can use to effectively conduct business on a global scale."

Jamieson, who leads the common processes and systems initiative for Boeing, noted that it is largely the enterprise process councils that are helping implement this initiative.

"Process councils in each discipline meet to make sure we're driving the best common processes and systems across the company," he said. "And just as important, the process councils help ensure that the company has the right breadth, depth and mix of skills to effectively conduct business within the processes and systems."

So, spread among the various business units, Phantom Works and corporate initiatives, Boeing's technology investments are taking as much care of the company's long-term needs as its near-term needs—ultimately making Boeing one of the most satisfying places in the world to work, Jamieson said.

"Our decision to continuously and substantially invest in technology and to commit our best, most innovative minds to defining the future of flight is what will keep us producing amazing things for the world—and keep us proud of what we've accomplished."

debra.j.arkell@boeing.com