Airbus Strategy of Assembling an Aircraft Essay

Airbus is a multinational company, with its headquarters in Toulouse, which coordinates all activities and controls the progress in all corporate functions. Its main actions are focused on four EU members: France, Germany, UK, Spain (Airbus online: 2012) France includes four manufacturing sites and three assembly lines. As one of the founder members France has the biggest number of employees. Germany has an important role in the development and engineering of all aircrafts. Hamburg is the Centre of Excellence for cabin and cargo customisation. (Airbusonline:2012) The main contribution of the United Kingdom is the expertise in the design and manufacturing of wings. The assembling of wings for all Airbus aircrafts takes place in the UK. Spain contributes the expertise in weight-saving, composite materials and in innovative manufacturing technologies. However, non EU members like China, Japan, USA or Russia have become more and more attractive in terms of working conditions and tax policy. (Airbusonline:2012) These international collaborations emphasize the multinational thinking of Airbus and indicate the EU as an important partner in terms of creating attractive general conditions. It has to be noticed that Airbus’s operations are one before and one after the implementation of the Sup@irWorld Program. In the next, are listed some of the advantages and disadvantages of the its implementation. Pros: * Improved productivity of its operations to effectively cater to the changing requirements of its customers. * Cycle time reduction of manufacturing aircrafts from 7.5 to 6 years * Smart buying- Reduced its supply cost base: The aim of this program was sharing risk with their suppliers and thus make them more responsible for the overall performance of Airbus. * Improvements in Supply Chain * Improved efficiency through new implemented technology in the supply chain * Quality standards * Economies of scales * Better scope for interoperability between its several entities * Fewer but dedicated suppliers and service providers * Introduction of the Supply Chain Quality Improvement Program (SQIP) to achieve the best performance in the industry such as supply chain efficiency, quality and on time delivery. Cons: * Job cuts -10,000 employees out of 87,000 across its plants were fired when implementing the power8 program * Lack of standardization before the introduction of sup@irWorld. This was leading to inefficiency in its operations with its different manufacturers, ordering the same spare fro different suppliers and using several logistic providers. Airbus recently introduced a ‘maintenance, repair and overhaul’ (MRO) strategy supporting RFID adoption for â€Å"value chain visibility,† by tracing both flyable and non-flyable components over their total lifecycle. According to Carlo K. Nizam, Airbus’s head of value chain visibility, the increasingly competitive global market, and the need to reduce costs and streamline business processes in order to remain competitive has driven the firm to adopt RFID. Airbus introduced the RFID-technology to increase their overall supply chain transparency and visibility to improve their general reactivity. Its goal is to â€Å"error-proof and automate† its supply chain and manufacturing operations to reduce aircraft production and maintenance costs. †¢ Minimize unplanned maintenance and detect malfunction early †¢ Manage and reduce airline parts inventories †¢ Establish audit trails for each uniquely identified object †¢ Ensure that the correct part is being used in the right place †¢ Mechanics can access document, task, and parts data, and locate and track approved spare parts in real time †¢ Identify and track tool location, usage history, and repair requirements †¢ Improve safety and security by authenticating components Benefits of utilizing RFID to Airbus: * Visibility: getting automatic updates of events in the value chain and an unprecedented high level of information * Process Benefits: the cycle times are shorter and less inventory is needed * Business Benefits: reduction in inventory, capital assets and stock reconciliations, and an increased labour productivity and supplier monitoring Drawbacks of utilizing RFID to Airbus: * High Costs * Standardization Issues: It can be very challenging to manage multiple readers and hardware, especially across many facilities * Potential Data Interference and Overload Issues: whether multiple passive RFID devices can cause interference to aircraft systems, whether a strong and undesired signal can activate all devices simultaneously, and the corresponding effects on aircraft systems * Environmental factors: emperature, presence of liquids or metals, such as foil packaging and liquid detergents, can affect the ability of readers to work reliably * Resistance to Change from Barcode System