Supply Chain Management: Boeing And Airbus

Supply Chain Management Boeing And AirbusI would like to mention a subject relating to aviation industry, especially in leasing shipcraft sector. The most important proletariat in this sector is how to order, purchase and lease back aircraft to airlines. But to implement this task, we should know in detail how the aircraft assembly process under the restrict of aircraft bring to pass is.In Vietnam, the aviation market has a great development with the air traffic increasing year by year. In order to meet the gamy demand, Vietnamese airliners fuck off to add more(prenominal) aircraft to their fleet. They not scarce purchase aircraft by itself, but also need to lease from aircraft lessors. So that, aircraft lessors have to curb airlines to develop their fleet. Beside, leasing aircraft sector is the new one in Vietnam aviation industry. With this purpose, this final paper will provide an overview of the submit twine management practices by Airbus and Boeing in their new produc ts as Airbus A350 XWB (Extra Wide Body) and Boeing B787 Dreamliners and how the both aircraft manufactures apply range process management. Understanding this process, aircraft lessors will off a suitable decision to purchase aircrafts.On this occasion, I would like to thanks my partners in Boeing Commercial Airplane and Airbus SAS for providing necessary intimate documents for reference. I also thanks my colleague in aircraft technical instalment in my company, Vietnam Aircraft Leasing Company, and technical staff from Vietnam Airlines Corporation for supporting during the data collection.2. Research Goals and Approach2.1 Goals In this final paper, I would like to provide the some overview for reason the emerging of supply chain management strategies in the commercial aviation industry. It also shows the longer-term implications of the supply chain management in the aviation industry in the future.2.2 Approach To implement a comparative analysis of supply chain management appli ed by Boeing and Airbus and their lean process management. To focus on dickens new large development chopines in commercial aviation (Boeing 787 Dreamliners and Airbus A350 XWB). To concentrate on the common set of providers supporting both programs to develop a bully compare and contrast perspective, looking at Boeing Airbus from the vantage point of these common suppliers.3. Literature reviewThe extensive literature showing that lean supply chain management practices represent a critical source of sustained competitive advantage and containing some factors as following Supplier ne t fit architecture conjugated to companys vision strategy. Early supplier integration into fig and development. Visibility and transparency through open communications. Long-term, trust-based, mutually-beneficial relationships. Continuous supplier development process improvement. New supplier network architectures represent a defining feature of emerging new business models for managing complexi ty, uncertainty and competition in a globalized market environment. Access to investment capital, new markets and new sources of innovation. Greater outsourcing, strategic alliances partnerships, delegation of greater responsibilities to suppliers to minimize risk and transaction hails. Internet-enabled study technologies and placements radically redefining supplier integration via improved information visibility and information-sharing strength gains. Machine-to-machine data communication system integration globally. Unprecedented visibility, transparency and accuracy. Greater flexibility in interconnecting different systems, facilitating both bilateral and twelve-sided collaboration.4. Research Design To develop baseline data about the individual supplier companies. To gauge whether and the ex dwell to which they are employing lean practices. To assess the extent to which the two large node companies are practicing lean principles in their engagement with the suppliers. T o document the extent to which the two large customer companies have proactively required the suppliers to adopt lean practices. To develop more deeply into specific topical areas (e.g., role in design development, information/communication links, contract design). To probe how exactly the two customer companies manage their relationships with these specific suppliers. Open source information to ensure external validity generalizability. About the two companies their supply chain management practices. About the two specific programs. About the common suppliers.5. Boeing 787 computer program5.1 Overview Launch Year in 2002 in order to responding to the overwhelming preference of airlines around the world, Boeing Commercial Airplanes new aeroplane is the Boeing 787 Dreamliner, a super- businesslike woodworking plane. An international team of top aerospace companies is developing the airplane, led by Boeing at its Everett, Washington facility near Seattle. Represents Boeings resp onse to expected demand for an aircraft that would cost less to own, operate and maintain. Targeted at the middle of the market segment the rapid, top, point-to-point connections aviation market segment, with capacity of 250 riders.Unparalleled PerformanceAt the premiere stage of the program, Boeing tent to plant 03 type of aircraft 787-3, 787-8, 787-9 but up to now, there are 02 main versions. The 787-8 Dreamliner will range 210 250 passengers on routes of 7,650 to 8,200 maritime miles (14,200 to 15,200 kilometers), while the 787-9 Dreamliner will carry 250 290 passengers on routes of 8,000 to 8, euchre nautical miles (14,800 to 15,750 kilometers).In addition to bringing big-jet ranges to mid- coat airplanes, the 787 will provide airlines with unmatched fuel efficiency, resulting in exceptional environmental exertion. The airplane will use 20 percent less fuel for comparable missions than todays similarly sized airplane. It will also travel at speeds similar to todays fast est wide bodies, Mach 0.85. Airlines will hump more cargo revenue capacity.Passengers will also see improvements with the new airplane, from an interior environment with higher humidity to increased comfort and convenience.Advanced engine roomThe delineate to this exceptional performance is a suite of new technologies being developed by Boeing and its international technology development team.50 percent of the primary winding structure including the fuselage and wing on the 787 will be made of multiform materials.An open architecture will be at the heart of the 787s systems, which will be more simplified than todays airplanes and offer increased functionality. For example, the team is looking at incorporating health-monitoring systems that will allow the airplane to self-monitor and report maintenance requirements to ground-based computer systems.General voltaic and Rolls-Royce are the two engine manufacture to develop engines for the new airplane. It is expected that advan ces in engine technology will contribute as much as 8 percent of the increased efficiency of the new airplane, representing a nearly two-generation jump in technology for the middle of the market.Another improvement in efficiency will come in the way the airplane is designed and built. New technologies and processes are in development to help Boeing and its supplier partners achieve unprecedented levels of performance at every phase of the program. For example, by manufacturing a one-piece fuselage section, we are eliminating 1,500 atomic number 13 sheets and 40,000 50,000 fasteners.Continuing ProgressThe Boeing board of directors granted authority to offer the airplane for sale in late 2003. architectural plan launch occurred in April 2004 with a record order from All-Nippon Airways. Since that time, 56 customers from six continents of the world have placed orders for 847 airplanes determine at $147 billion, making this the most successful launch of a new commercial airplane in Boeings history. The 787 program opened its final assembly constitute in Everett in May 2007. First flight of the 787 Dreamliner occurred in Dec. 2009.The program has signed on more than 40 of the worlds most capable top-tier supplier partners and unitedly finalized the airplanes configuration in September 2005. Boeing has been working with its top tier suppliers since the early expatiate design phase of the program and all are connected roughly at 135 sites around the world. Eleven partners from around the world completed facility construction for a total of three million additional square(a) feet to create their major structures and bring the next new airplane to market.5.2. SpecificationModelB787-8B787-9EngineGEnext or Rolls Royce Trent 1000GEnext or Rolls Royce Trent 1000Range7,650 to 8,200 nautical miles (14,200 to 15,200 kilometers)8,000 to 8,500 nautical miles (14,800 to 15,750 kilometers)Seat210 to 250 passengers250 to 290 passengersConfigurationTwin aisleTwin aisleCro ss Section226 inches (574 centimeters)226 inches (574 centimeters)Wing Span197 feet (60 meters)197 feet (60 meters)Length186 feet (57 meters)206 feet (63 meters)Height56 feet (17 meters)56 feet (17 meters)Cruise SpeedMach 0.85Mach 0.85Total Cargo Volume4,400 cubic feet5,400 cubic feetMax Takeoff Weight502,500 lbs (227,930 kilograms)545,000 lbs (247,208 kg)Program milestonesAuthority to offer late 2003Program launch April 2004Assembly start 2006First roll-out ceremony July 2007First flight December 2009First delivery Mid Q1/2011 (estimated)5.3. Program Fact SheetThe 787 Program covers many areas of interest, from the market, customers, and airplane technology to manufacturing enhancements and an extensive partner team, among others. Here are some interesting facts and figures on a number of these topic areasMarket size3,310 units over 20 years (Boeing Market Forecast 2009-2028)Firm orders by customer (up to October 2010 at www.boeing.com)Model SeriesOrdersDeliveriesTotalB787-8629629B 787-9218218B787 Total847847B787 vs. B777 on composites and aluminum (by weight)B787B77750 % composites12 % composites20 % aluminum50 % aluminumMaterial breakout on B787Composites 50%Aluminum 20%Titanium 15% nerve 10%Other 5%Better designe More fuel efficient 20 % more fuel efficient than similarly sized airplanes Produces fewer emissions 20 % fewer than similarly sized airplanes Better kind seat mile costs than peer airplanes 10 % Better maintenance costs 30%Generators quadruplet at 250 kVA (two per engine)Two at 225 kVA (on auxiliary power unit)Hydraulic powerDistributed at 5,000 pounds per square inch on the 787 3,000 pounds per square inch standard profit of the new electric architecture Extracts as much as 35 percent less power from the engines than traditional pneumatic systems on todays airplanes.US and non-US matter on the 787 Roughly 70 percent US Roughly 30 percent non-US.The number of new city pairs the 787 will connect At to the lowest degree 450Other special features Represents large step towards all-electric-airplane, one in which all systems are run by electricity. Driven by the belief that power electronics, key to the all-electric airplane, are on a steep curve of performance cost improvement, while pneumatic systems maturement has tapped out around 1995. The traditional bleed air and hydraulic power are replaced with electrically powered compressors and pumps. Cabin pressurized by electric motors, not by bleed air used by almost every pressurized aircraft. An open architecture centralized computer hosts the avionics and utility functions, rather than dozens of individual buses. Anti-icing of the wing to be done with electric heat sooner of bleed air. Composites resist long-term wear and tear, because cracks do not propagate from holes as in aluminum inspections are made easier maintenance intervals stretched to 1000 hrs (compared with 500 hrs for 767 or 700 hrs for A330 the two most prominent aircraft 787 aims to replace). Much more s avvy focus on flexible financing arrangements, plus closer attention to passenger comfort, fuel burn and life cycle costs.6. Airbus A350 XWB Program6.1. OverviewAimed at compete with B787 from Boeing, Airbus has decided to build A350 XWB based on the technologies developed for A380. The Airbus A350 XWB is a long-range, mid-size, wide-body family of airliners presently under development by European aircraft manufacturer Airbus. The A350 will be the first Airbus with both fuselage and wing structures made primarily of carbon fibre-reinforced polymer. The A350 is designed to compete with the Boeing 777 and the Boeing 787. Airbus claims that it will be more fuel-efficient, with up to 8% lower operating cost than the Boeing 787. It is scheduled to enter into airline service during the second half of 2013. The launch customer for the Airbus A350 is Qatar Airways. Development costs are projected to be US$15 billion.Airbus utilises next-generation manufacturing and assembly techniques to make the A350 XWB a more efficient and reliable aircraft. The A350 XWB is furnished with an advanced cockpit and onboard systems optimised for robustness and simplicity, while its advanced wing design makes this aircraft faster and quieter.The A350 XWBs onboard systems are designed for maximum reliability, operability and simplicity.The advanced wing design of the A350 XWB will make it a faster, quieter and more efficient aircraft.Airbus utilises new techniques to optimise the A350 XWBs weight, maintenance and operating costs.The A350 XWBs cockpit features the latest in display technology and integrated modular avionics.6.2. SpecificationAircraft Dimensions boilers suit length198 ft.7.5 in.219 ft. 5.5 in.242 ft. 4.7 in.Height55 ft. 11.3 in.55 ft. 11.3 in.55 ft. 11.3 in.Fuselage diameter19 ft. 58 in. (horiz)19 ft. 58 in. (horiz)19 ft. 6 in. (horiz)Wingspan (geometric)212 ft. 5 in.212 ft. 5 in.212 ft. 5 in.Wing area (reference)4,740 ft24,767 ft24,767 ft2Wing sweep (25% chord)31.9 deg rees31.9 degrees31.9 degreesWheelbase81 ft. 7 in.94 ft. 1 in.108 ft. 7 in.Wheel track34 ft. 9 in.34 ft. 9 in.35 ft. 2 in.Basic Operation DataEngines2 Rolls-Royce Trent XWB2 Rolls-Royce Trent XWB2 Rolls-Royce Trent XWBEngine thrust range75,000 lb. slst.84,000 lb. slst.93,000 lb. slst.Typical passenger sit down270 (3-class)314 (3-class)350 (3-class)Range (w/max. passengers)8,300 nm.8,100 nm.8,000 nm.Max. operating Mach number (Mmo)0.89 Mo.0.89 Mo.0.89 Mo.Design WeightsMaximum ramp weight548.7 lbs. x 1000592.8 lbs. x 1000659.0 lbs. x 1000Maximum fraudulence weight546.7 lbs. x 1000590.8 lbs. x 1000657.0 lbs. x 1000Maximum landing weight407.9 lbs. x 1000451.9 lbs. x 1000503.8 lbs. x 1000Maximum zero fuel weight382.5 lbs. x 1000423.3 lbs. x 1000470.6 lbs. x 1000Maximum fuel capacity34,082 US gal.36,460 US gal.41,215 US gal.Some Design Technical Features Cockpit design follows same cockpit layout, characteristics and operating procedures as in the A320 and A330/A340 platforms, providing a number of advantages (e.g., in terms of bunch training, crew transition, cross-crew qualification). Also incorporates new features that benefit from innovation in technologies for displays, flight management navigation systems. First commercial airplane to adopt EHAs (electrohydrostatic actuators) flight control technologies, a step forward to the all-electric airplane. EHAs are electrically powered but use hydraulic pumps and reservoirs that transform electrical power into hydraulic power. Advantages large nest egg in terms of weight and space (e.g., reduction in the size of pipelines, actuators and other components, power generation equipment, tubing, amount of fluid required), as well as ease of installation. First commercial aircraft capable of flying with total hydraulic failure, using electricity to operate the flight control surfaces. Extensive use of composite materials 25% (by weight), compared with 10% in A320 and 30% in A340-500/600. Use of carbon composites and ad vanced metallic hybrid materials, along with laser beam welding to decease fasteners, press weight and provide enhanced fatigue tolerance. spot highly resistant to fatigue, used in construction of panels for upper fuselage. Aluminum and fiberglass layers of Glare do not allow propagation of cracks. Glare lighter than conventional materials represents a weight saving of about 500kg.6.3. Fact SheetFirm orders by customer (up to October 2010 at www.airbus.com)Model SeriesOrdersDeliveriesTotalA350-800158158A350-900340340A350-10007575A350 Total573573A350 vs. B787 on material breakout (by weight)A350B787Composites 53%Composites 50%Aluminum 19%Aluminum 20%Titanium 14%Titanium 15%Steel 6%Steel 10%Other 8%Other 5%Airbus internal goal to freeze the design and expects10% lower airframe maintenance cost14% lower empty seat weight than competing aircraftMore fuel efficient Up to 25 % more fuel efficient than similarly sized airplanesProduces fewer emissions Up to 25% fewer than similarly siz ed airplanesBetter cash seat mile costs than peer airplanes 15%7. Supply Chain Management Practices by Airbus and Boeing Supplier selection on both programs following a typical competitive bid process during initial plateau phase selection on best-value basis. Boeing retains unified list of pre-qualified suppliers/ venders (qualified parts list QPL qualified vendor list QVL). Airbus does not yet maintain such a unified list, but moving in same direction. Both have major suppliers go in early in design and development process. Both committed to long-term, mutually-beneficial, reliable and stable relationships with key suppliers. Supplier partnerships typically limited to suppliers that continuously show probity in performance, demonstrate credible long-term business interest, and back it up with their own development and investment. Life-of-program fixed-cost contracts, but with some differences. Electronic links with suppliers via supplier portals (request for summon/proposal o rder placement technical data interchange, such as technical specifications, key characteristics, engineering drawings exchanging documents facilitating virtual collaboration with global partnering suppliers in a 3D design software environment). RFID (Radio Frequency Identification) initiatives Both Boeing and Airbus have expanded the application of RFID tags for both the B787 and A350 programs they have worked together to reach for consensus regarding standards for using global RFID technology on commercial airplanes).8. Major suppliers responsibility is greater Important strategic shifts in supply chain management, driven by pressing need to reduce cost and spread development costs. Both have asked major suppliers in B787 and A350 to absorb non-recurring costs, thus greatly shifting costs and risks to suppliers, but using passably different approaches. Suppliers delegated much more responsibility for design, development and manufacturing through closer collaboration, partnerships and integration across supplier networks.Boeing 787 Boeing has gone the extra distance with the 787 program retains only about 33%-35% of the total 787 work share Deliberate effort to reduce parts count to enable snap three-day assembly of the 787 Suppliers moving up the value chain assuming more of a system integrator role, providing more integrated components and managing their own sub-tier suppliers This is the first time Boeing has outsourced the entire wing design and manufacturing to external suppliers (risk-sharing partners Fuji Heavy Industries, Ltd. center wing box Kawasaki Heavy Industries, Ltd. main wing fixed trailing edge Mitsubishi Heavy Industries, Ltd. wing box) This is the first time Boeing applied lean manufacturing process in B787 program to improve absence management while merging its short and long-term disability program administration with leave-of-absence offering.Airbus A350 Airbus, as a multinational consortium prior to July 2001, had already adopted a s trategic partnership model with well-defined work-share arrangements. Airbus has increased its outsourcing in the A350 program, but has still kept in-house core technologies, such as composite technology and wing design. Airbus also applied lean process technique by getting advice from Porsche (a German car manufacture) in order to reduce production time and avoid delay as happened in A380 program.9. Worldwide OutsourcingBoth Airbus and Boeing have increased their global outsourcing in Japan, China, India, Middle East, Eastern Europe and Russia (estimated in the future). Why the two aircraft manufacture select these region because of the strong economic growth as well as fast-growing air travel particularly in Asia/Pacific region. Large Asian and Middle Eastern carriers as capital of Singapore Airlines, Emirates, Vietnam Airlines now are the major customers. The variety of offset arrangements have opened up new market opportunities, tied to increased sourcing (e.g., from China).Boei ng strategy long extraordinary dominance in Japanese market strong presence in China. In Japan 80% of orders from Japanese airlines from Boeing during last decade Japanese suppliers (heavies) compute for 35% of 787 work-shares. In China activities range from subcontracting, joint ventures, technical training and assistance for cooperative programs visible support from Chinese suppliers (valued at $1.6 billion), supplying necessary composite parts and structures for 787 programs.Airbus strategy relative newcomer to Japan China. In Japan facing difficulties in winning orders from Japanese airlines, but has contracted work with Japanese suppliers. In China sale activities in China jumped to 219 aircraft in 2005 from 56, overtaking Boeing by delivering 6 more aircraft committed to doubling procurement from Chinese suppliers to $120 million/year by 2010 announced Tianjin will be site for Airbus first final assembly plant outside Europe.10. The Emerging incomparable ModelBoeing Mode lThe Boeing 787 experience represents a unique model for the future in supply chain management. In essence, the Boeing model is about optimizing the total business, not just the supply chain in the traditional sense. Supply chain architecture as an integral part of the entire program extended opening architecture. Main emphasis is on optimizing portfolio of core competencies in entire value stream for mutual benefit. Lifecycle value creation perspective, not short-term waste excreting or cost minimization for Boeing itself. Boeing has adopted a bold new innovative system integrator role. This represents a revolutionary departure from the past. Boeing has asked all suppliers to carry all of the non-recurring costs in return, gives back to risk-sharing partnering suppliers the intellectual property rights on the components or systems they provide. Contracts are so designed that if the aircraft does well in the marketplace, the risk-sharing partners derive direct benefits and major p artnering suppliers can make design trades within each work package and across company units to find optimal system solutions. Lower-tier suppliers are not provided IP ownership but are given long-term relationships, where they can benefit from scale economies. Boeing only provides high-level interface definition the first-tier (major partnering suppliers) is responsible for the detailed interface definitions designs. Suppliers work together and Boeing acts as referee in case of conflicts. Web-enabled information technologies systems a critical enabler.Airbus model Airbus is reported to have established risk-sharing partnerships with more than 30 of its major suppliers covering $3.1 billion or 25% of total program non-recurring costs. These suppliers include Alenia, Eurocopter, Fokker, Gamesa, Labinal, Saab). However, this needs closer scrutiny, to see what it actually means. Airbus also continues to achievement control over all system and detail engineering interface definitions . Airbus suppliers work in parallel (bilaterally with Airbus), with limited lateral communications among them. Unlike Boeing, Airbus has no strong partners for major risk-sharing activities or as contributors to development spending. However, Airbus is currently pursuing new partnering arrangements under its Airbus Power competitiveness Industrial Plan. Plan proposes radical cost-cutting systematization measures (cutting 10,000 jobs, closing down or selling specific sites, rearranging workshare allocation). Investment partners being sought for the Extended Enterprise sites (Nordenham, Germany Meaulte, France Filton, UK). As part of the plan, supplier relationships would also change (Airbus wants partners to commit to long-term cost reductions). Airbus also reducing its supplier base from 3,000 down to 5,000.11. ConclusionAerospace supply chain management will continue to arise from a transactional or relational business model to one involving risk-sharing and cost-sharing prime-su pplier partnerships, alliances closely-knit collaborative relationships. Where primes (system-integrators) will likely to move closer to a total system integrator lifecycle value provider role. Major suppliers to assume greater system-integrator role, with greater responsibility for design, development, manufacturing, and after-market lifecycle support. Suppliers, in general, moving from short-term service providers to long-term partners. Global outsourcing considered as aerospace supply chains and is likely to be a lot more quite internationalized in the future. Adoption of information technologies enabling network-wide connectivity right down to lower tiers an exacting in the future for coordinating complex set of interdependencies. Continued consolidation likely in aerospace supplier base to build greater specialization broader system integration skills, and stronger financial backbone to make the necessary investments to enhance core capabilities.