n FEATURE STORY Biggerthan its size

28 October 2007 BOEING FRONTIERS n FEATURE STORY

By Maribeth Bruno

he “golden age” of the low-lying part of Europe now known as the arrived in the 17th century. While fight- Ting wars and signing treaties with their bigger neighbors, the Dutch used their logistical genius to build a trading empire that stretched from Asia to the Americas. Meanwhile, engineers inno- The Netherlands may be vated increasingly ambitious methods to save fields from flooding and to claim dry land from the sea. geographically minuskuul, In the 21st century, the Netherlands’ internationalism, inno- but this innovative, vation and position at the forefront of environmental issues have proved to be as resilient as the Dutch themselves. These traits now than its strengthen the relationships between Boeing’s commercial, de- environmentally conscious fense and research divisions and the company’s Dutch customers country has gigantisch and supplier partners—with tangible benefits for all. importance to Boeing Royal heritage The earliest sale to the Netherlands in the company’s history size was probably the DC-2. In October 1934—15 years after starting operations—KLM Royal Dutch Airlines entered one of its DC-2s in a race from London to Melbourne, Australia. The DC-2’s second-place finish behind a racing airplane—while making all its scheduled stops—increased its popularity around the world. KLM remains a valuable customer and partner for Boeing to- day. It operates MD-11s; Classic and Next-Generation 737s; and 747s in all-passenger, Combi and Freighter configurations, and has The Netherlands’ iconic windmills and tulips are just two examples of how the country phased out its 767s with the addition of 777-200ERs. In 2004, KLM has managed its environment for centuries. merged with Air to form -KLM Group. The While flood control remains a major concern, group in June made its first joint announcement for new airplane the population is also calling for reductions orders—nine 777-300ERs and seven 737-700s. in carbon-dioxide emissions and noise. “KLM is a long-term customer that, while it naturally has an affinity with European companies, also has strong ties to U.S. in- dustry,” said Tom VanderHoeven, Boeing Commercial Airplanes director, European Sales. KLM runs a subsidiary airline called KLM Cityhopper and the Dutch unit of low-cost, all-737 operator .com. It also owns 50 percent of the shares of European carrier . The airline’s home base is Amsterdam Airport Schiphol, where in the first half of 2007, 42 percent of the 22.4 million passengers served were between flights. “Transit traffic has lower yields [airfare divided by revenue pas- senger miles], so to succeed you need to keep costs down and of- fer more connections at higher frequencies,” said Jan Witsenboer, KLM senior vice president of Corporate Procurement and Fleet Development. Expanding and updating its fleet with airplanes that are fuel- efficient and can fly long distances is part of KLM’s response to this challenge. For instance, it has increased its service to and Toronto and launched nonstop service to , , with its new 777s. “Boeing builds good aircraft that match our re- quirements,” said Witsenboer. These requirements increasingly involve environmental con- cerns—chiefly fuel consumption, carbon dioxide emissions and noise. By spring 2008, all of KLM’s Next-Generation 737s will have Blended Winglets, which enhance performance and reduce carbon dioxide emissions. The airline also partners with Boeing, Schiphol and air traffic control authority LVNL on ways to reduce environmental impact through advanced air traffic management (see story on Page 33). One of Boeing’s environmentally progressive solutions is the 787 Dreamliner. Asked if he was considering the 787, Witsenboer

ISTOCKP H OTO . CO M I A G E replied, “Yes—who’s not?” He noted that KLM regularly flies

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747 Combi aircraft—280 seats, with seven pallets in the rear—to military personnel—restricts deployments to a modest number, it reduce unit costs. Using a 230-seat 787-8 on the same route, he is “lean and mean,” said van Dijk. “A few years ago, they reorga- said, it becomes “the front of a Combi,” flying the same distance nized and reduced their numbers in order to be able to invest in but with better seat-mile costs and the ability to economically open high-quality, flexible, and fully deployable forces and equipment. new routes in Asia. And Boeing was and still is part of that.” “The Netherlands is one of the most densely populated areas in Boeing products procured by the Netherlands Ministry of the world, with an expanding need for air transport and for signs of Defence include 29 AH-64D Apache attack and reconnaissance environmental innovation and improvement,” said VanderHoeven. helicopters (for which it was the first non-U.S. customer); 11 “If we can work together to find solutions, those products could CH-47D Chinook transport helicopters; two KDC-10 tanker/trans- then be accepted in other areas of the world that will soon be in the port aircraft; one DC-10 passenger/freight aircraft; the RGM-84D same situation.” Harpoon missile; the Joint Helmet Mounted Cueing System for F-16 pilots; and Joint Direct Attack Munition Precision Guidance Advanced ally Kits. The country is also part of a group of nations supporting the Dutch foreign policy focuses on the European Union, the Unit- NATO Airborne Warning and Control System program. ed Nations and NATO. Therefore, the Netherlands “recognizes its In February, the ministry’s Defence Materiel Organization and responsibility for peacekeeping missions, and is willing to take Boeing signed a direct commercial sales agreement for six new- the lead in coalition with other countries,” said Robert van Dijk, build CH-47F (NL) Chinooks to be delivered in 2009-2010—the Boeing Integrated Defense Systems director of Business Develop- first sale of that model outside the . ment, Benelux (Belgium, Netherlands, Luxembourg). “The Dutch use their Chinooks not just to fly from A to B, but While the size of the Dutch force—a little more than 50,000 also for special forces deployment,” said van Dijk. “So they oper- ate a special configuration that’s more extensively equipped and weather-independent.” Boeing products in use by the Dutch The Netherlands has some 2,000 troops deployed overseas, of armed forces which 1,600 are stationed in Afghanistan as part of the NATO-led include the AH-64D International Security Assistance Force. Apache attack and “We have a very modern glass cockpit that some countries reconnaissance are jealous of,” said Lt. Col. Bart Hoitink, commander of Royal helicopter (top) and Netherlands Air Force Squadron 298, which has three D-series CH-47D Chinook transport helicopter. Chinooks in Afghanistan, supported by 30 troops. “With it, we The Netherlands can foresee parts of the flight … and the Chinook will tell us if we earlier this year can do the mission. We also have capabilities that came from the became the first Apache for protection against missiles and radar. non-U.S. customer “All that will be brought forward into the CH-47Fs,” Hoitink for the new CH-47F continued, “plus we’re focused on adding growth potential, expan- with an order for six of the aircraft. sion capabilities.” “Defence is a proactive customer, and they pick what they need,” said van Dijk. “In negotiations such as the NATO plan to purchase C-17A airlifters, they can have a lot of influence with other countries.” Partnering with KLM Partnerships are a large and successful element of the Boeing- KLM relationship. Their joint Spares Distribution Center near Schiphol can meet requests for 35,000 types of parts in stock, usu- ally in less than 24 hours. The same facility houses the Next-Generation 737 Component Services Program, which the two companies announced in April 2005. Boeing and Air France formed a CSP for the 777 in Paris in late 2003. Airlines in either of the programs gain access to a pool of high-value parts, reducing their inventory and repair costs by up to 30 percent. Boeing manages the repair of Boeing-proprietary parts, and KLM and Air France handle the rest. “One of our early Lean initiatives was to bring all our inven- tory and people together,” said Paul Morgen, Boeing Commercial Services director of Component Services. “Each of us has an equal value of inventory shared into the program, and both Boeing and KLM people work at the same facility to improve com- munication and share best practices.” The 737 and 777 CSPs remain mostly separate despite the Air France–KLM merger, but “one synergy is that when we plan a sales campaign, CAS Sales gets together with both KLM and O F D E ENCE P H OTO NET H ERLAN D S M INISTRY

30 October 2007 BOEING FRONTIERS n FEATURE STORY

KLM operates several Boeing jetliner models, including the 777 (below, at Amsterdam Airport Schiphol). The airline was the launch customer for the -200 and the Electronic Flight Bag, and the European launch customer for the 737-900. P H OTOS F OR KL M CAPITAL

Air France Sales and we develop an approach together,” said Morgen. “Whoever we all decide has the best relationship with the The Netherlands at a glance customer takes the lead.” Location: Western Europe, bordering the North Sea, between Building business relationships Belgium and Boeing’s defense contracts also provide work for Dutch indus- Area: 16,033 square miles (41,525 square kilometers), about try, due to military offset requirements that say 100 percent of a double the size of the U.S. state of New Jersey contract’s value must be reflected in in-country projects. More than 80 Dutch organizations are at work on both military and com- Estimated population: 16.6 million mercial projects to satisfy the requirement in a way that benefits Capital: Amsterdam (seat of government is The Hague) everyone. Other major cities: Rotterdam, Utrecht “The Dutch Ministry of Economic Affairs’ goal is to grow tech- nology, working with small and medium enterprise, and grow their Total gross domestic product, 2006: $612.7 billion aerospace industries,” said Ligia McLean, IDS Industrial Partici- Estimated GDP growth rate, 2006: 2.9 percent pation manager for the Netherlands and Belgium. “The Dutch are very skilled in advanced composites, machining of hard metals, Main export partners: Germany, Belgium, , France, precision machining, and advanced electronics. Plus, they are able Italy, United States to remain cost-competitive despite the [monetary] exchange rate.” Main import partners: Germany, Belgium, China, United States, Success stories include Dutch Aero’s one-piece instrument pan- United Kingdom, Russia, France el for the Apache, Tedopres’ conversion of helicopter Integrated Military expenditures as percent of GDP, 2005: 1.6 percent Electronic Technical Manuals into an automated Japanese format, and Dutch Thermoplastic Composites and Kok & Van Engelen’s Languages: Dutch; Frisian. About 85 percent of the population can manufacture of reinforced thermolaminate composites for both speak English. IDS and Commercial Airplanes. Small business To70 Air Traffic Sources: CIA World Factbook; Netherlands Foreign Investment Agency Management worked with Boeing subsidiary Jeppesen to provide studies of integrated simulation, decision support and scheduling solutions for airports.

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Boeing also created an opportunity with the Institute of Knowl- edge and Technology Center and machining company Genius Klinkenberg International, in which Boeing Quality and Lean+ experts provided training to a consortium of small businesses with John Bruins works on a C-17 GKI as focal. “Boeing is helping to create business relationships ramp attach torque box at Stork with economic benefits to the Netherlands that extend beyond the Aerospace in Papendrecht. The terms of the contract obligations,” said McLean. “In return, these company was named a 2004 Dutch entities have an interest in supporting the sale of our prod- Boeing Supplier of the Year for its work on the C-17 and Apache ucts and services.” programs. Preferred supplier: Stork Aerospace One such entity is Stork Aerospace, a close-knit group of compa- nies that includes the heritage of aviation pioneer Anthony ’s namesake factory. Stork develops and produces advanced components and systems and supplies maintenance services to the commercial, civ- il and military aerospace segments. “Our background in aircraft integration distinguishes us from other suppliers,” said Peter Flinkerbusch, sales director for structures provider Stork Fokker, an operating company of Stork Aerospace. “And the Dutch are traditionally known for their entrepreneurial spirit. We’re a good partner for Boeing as it expands globally.” Stork Aerospace’s relationship with Boeing began with an offset program for Apache avionics bays, which developed into a regu- lar contract. It also provides the C-17’s ramp attach torque box and troop door air deflector. The company was named a 2004 Boeing Supplier of the Year, Major Structures category, for its work on these programs. On the commercial side, Stork Fokker contributed to the wing redesign for the 747-8 and is providing the engineering and initial production for that airplane’s inboard flaps—including manage- ment of the supply chain. Building on its success with other Boeing programs, wiring unit Fokker Elmo in 2005 won several contracts for the electrical wiring packages for the 737 and 777—and also has a development contract with IDS to provide wiring for the P-8A Poseidon. Mar- keting & Sales Manager Mischa Baert noted that a large part of the P-8A work will be subcontracted to U.S. small businesses while managed by Fokker Elmo. “Stork is an intelligent supplier—it improves the product and the process by emphasizing innovation, a strong customer focus and cost management,” said Boeing’s van Dijk. The company invests about 11 percent of its profits in research and development, and is enhancing both its Lean processes and its global supply chain— including facilities in Lang Fang, China, and in Kent, Wash. “We outsource some of our work in other countries not only to improve on costs, but also to support our customers’ business case in those locations,” said Arjan Vergouw, Stork Aerospace director of Business Development. Many relationships, one Boeing SA M RENT EESTER /FM A X P H OTO Jan Narlinge, president, Boeing Northern Europe, calls the Netherlands an example of “achieving an optimum.” “They want to be part European and part transatlantic—and It’s our future they’ve been very successful,” he said. “Likewise, the Netherlands Actions cited in this story show how employees are applying con- is an example of Boeing’s success in building international rela- cepts of the Boeing Management Model to support the company’s tionships in all sectors. business strategies. Here’s how. “But we have to remember that customers don’t see us as IDS or Commercial Airplanes or International—they see us as The • Growth and productivity: Integration, global partnerships. Boeing Company,” Narlinge added. “If we work together as one To learn more about the Management Model, visit http://bmm.web. company, with an international outlook, we can only grow—in the boeing.com on the Boeing intranet. Netherlands, in Europe, and around the world.” n [email protected]

32 October 2007 BOEING FRONTIERS n FEATURE STORY P H OTO LVNL Controllers work in the air traffic control tower of Amsterdam Airport Schiphol. Boeing is partnering on Air Traffic Management -re search and development work with KLM Royal Dutch Airlines, Schiphol and LVNL (Air Traffic Control the Netherlands), among other Dutch partners. The team’s Tailored Arrivals concept recently completed in-service trials at the airport. ATM: a common language One of Boeing’s most exciting partnerships in the Netherlands is its Air Senior Technical Fellow Belur Shivashankara said Commercial Traffic Management research and development work with KLM Royal Airplanes will use knowledge gained in the Netherlands “in develop- Dutch Airlines, Amsterdam Airport Schiphol, LVNL (Air Traffic Control ing computer programs that will help define optimum low-noise, the Netherlands) and other partners. The team has been working on low-emissions takeoff and landing procedures. We are also discussing concepts designed to save fuel and reduce emissions and noise while features for the [aircraft] flight management computer to aid the use of allowing aviation to grow. environmentally progressive operational procedures.” “The Netherlands has stringent environmental requirements, complex Shivashankara called his Dutch counterparts “truly experts among the levels of air traffic, lots of neighbors, demand for growth,” said Rob air navigation service providers.” Mead, a lead Phantom Works engineer for Boeing ATM. “Partnering “Our cooperation with Boeing has added momentum to our develop- here gives us insight into some of the most demanding situations likely ment work,” said Evert Westerveld, manager of ATM R&D for LVNL. to be encountered in ATM.” “Our engineers and Boeing’s connected well. There’s respect for one The team’s first deployed concept was the collaborative decision- another’s expertise.” making tool that emerged from the joint Inbound Priority Sequencing The team also wants to play a part as larger U.S. and European ATM project. It involves letting airlines influence which flights receive priority initiatives begin to define common architectures and interoperability handling by ATM when demand exceeds capacity. It is now in use standards. “The United States is ahead in some aspects, while Europe by KLM, in cooperation with LVNL and the Eurocontrol Central Flow is in others,” said Eugenie Kalshoven-van Tijen, KLM ATM director of Management Unit. Strategy. “We’ll share what we’ve learned so we each don’t reinvent Another concept—the efficient, predictable, continuous descents the wheel.” known as Tailored Arrivals—has completed in-service trials at Schiphol “Really big endeavors get a lot of press, and rightfully so,” said Kevin and then in San Francisco and with NASA. The participation of Eurocon- Brown, Commercial Airplanes ATM vice president and general manager. trol Maastricht, which is responsible for traffic control in the upper “But there will continue to be a critical need for spiraled development, airspace of Belgium, Luxembourg, the Netherlands and northwest testing, and deployment of transformational concepts of operation and Germany, expanded the project’s European footprint, said Mead. “The technologies. That’s where forward-looking partners can work together results are now being fed back into the next round of development in to change how airplanes fly.” the Netherlands, through the Speed And Route Advisory project,” Mead added. —Maribeth Bruno

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