08 December 2014

Automotive techniques to secure A350 ramp up 2/2.

Airbus is transforming their supply chain with automotive techniques to secure the series production drumbeat of the A350 ramp-up.

Source: Airbus

Airbus is gradually changing its business model, even at the risk of displeasing some airlines, by moving towards less customisation, especially in the choice of cabin layout. 

It has altered the way it deals with scrap by asking some suppliers to pre-machine parts and sharing more information with them to avoid sending shocks through the supply chain: a tool used by the car industry to manage its much higher volume.

"In automotive you find a lot of visibility and predictable demand for the supply chain to enable them to have a very high utilisation of capacity and adapt early on," Richter said.
Both Boeing, with its 787 Dreamliner, and Airbus, with its A400M military transporter, have had costly slowdowns in the past blamed on inadequate oversight of outside suppliers.

Source: PAG

Of 3.000 suppliers on the A350, only about 200 are so-called Tier 1 firms dealing directly with Airbus.
Richter said there were few points of vulnerability or "hot spots" in the supply chain and parameters like on-time delivery, missing parts and quality had all improved "significantly".

"With that strategic preparation, we are pretty confident we can imagine the exceptions and the weak partners but these will be very limited," he said in the interview.
Even before the first A350 delivery due next month, Airbus is running its supply chain at the equivalent of 2-5 jets a month, half way towards an assembly goal of 10 a month by 2018.

Still, the margin for error is tight. "You are running at near red-line capacity and if there is anything that throws things off, it can have a cascading effect through the supply chain," said former McKinsey & Co aerospace head Jerrold Lundquist, managing director of Lundquist Group.
Furthermore, the next 3 years will be crucial for Airbus, during which the A350 will be on a financial tightrope and the A320 must continue to finance the rest of the group.

With the A350 ramping to peak output quickly, any delay in reducing costs through experience could affect multiple planes.
"A large part of the learning-curve challenge is getting carbon-fibre production of the airframe and assembly up to speed in synchronisation with the supply chain," Richter said, adding the problem was "understood and intensively managed."

Based on the article “Insight: Airbus deepens carmaker thinking to drive jet output” published in Reuters.

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