Airbus
Auto Parts Asia|September - October 2019
Adept At Managing Complexities Of Extensive Outsourcing, Supply Chain

For Airbus, the world leader in aircraft manufacturing, partners and suppliers are part of an extended family. They play a crucial role in its common business success. With 12,000 suppliers, Airbus outsources about 80 percent of the products and services for flying and non-flying parts, equal to over two-thirds of its turnover. Having an overall sourcing volume of €49.6 billion, for Airbus global sourcing is one of its long-term objectives. It will be 40 percent outside Western Europe and the US by 2020. The company looks for partners who are ahead of the game and are able to offer creative, innovative and digital solutions even in a complex environment.

Suppliers for direct procurement are grouped under such various commodities for flying parts as Aero-structures, Equipment and systems, Material and parts, Propulsion, and Specialised IT and services. These clusters may vary depending on the product area. Indirect procurement of goods and services of non-flying parts that include buildings, machines and tools, engineering services, consulting, IT and office equipment is under the shared service unit, Airbus General Procurement.

Recently T Murrali of AutoParts Asia visited Airbus headquarters in Toulouse, France, and caught up with Thierry Vuillequez, Head of End-to-End Supply Chain Quality Boost, Procurement Operations. During an interaction he said, “We have now opened out the market as we need additional sources at competitive prices because we are selling aircraft all over the world. . . . We have set up benchmarks with Toyota, Bosch and Volvo, making use of their expertise. We are having a wide set of methods including Kaizen, Ishikawa - the fish bone concept, and others to ensure high quality standards. The levels of quality we need are more advanced than that of automotives. We use the same tools to achieve higher targets. We not only look at implementation but also sustenance of the whole system based on requirements.” Edited excerpts:

Q: Airbus works with over 12,000 suppliers and over 80 percent of the parts, including the engine, are outsourced; you make the main frame. What are the challenges you face in handling such large number of suppliers?

Vuillequez: The total supplies from about 12,000 sources include flying and non- flying parts. I deal with the non-flying parts. The first challenge is that the suppliers are spread all over the world from Europe to USA, India and other countries in Asia. With high volumes coming in from so many countries, the task is in streamlining them. Communication is one of the main issues with different time frames.

Organisational culture is another, how you handle persons in the US and China differs. The language barrier has to be taken into account. Besides handling these suppliers, we are dealing with millions of part numbers, a very complex business. Of course, now it is very interesting to work with robust data bases supported by information systems and software tools; it is a comprehensive evolution of managing all these complexities. The aerospace industry is seen as more stable than the automotive.

Q: Can you tell us about the different aircraft that you make?

Vuillequez: We make about 60 aircraft a month on a single platform. We have several working hubs for single aisle such as A-320 (319, 321), A-340 and 350 (long range). Last year we delivered 800 aircraft, equivalent to more than 10,000 cars. We hope to increase the number this year. What is very different from automotive is that our aircraft are customised depending on the configurations required by the customer right from the colour and number of seats.

Q: To that extent, the number of parts, sourcing, and everything else increases. How different is your outsourcing strategy for procuring flying and non-flying parts? How do you classify them?

Vuillequez: The constraints are diverse. For non-flying parts for India we have a big set-up of engineering services in Bengaluru. We have standardised the non-fly parts. For production of flying parts there are constraints in terms of safety and security. Safety is a major input for us. We subcontract some IT services to India, the US and other countries. At the end of the day we are not just selling an aircraft but ensuring optimum safety of the passengers. We select suppliers based on their quality and maturity on aerospace parts; we don’t buy just because it is cheap.

Q: Can you explain ‘Supplier Code of Conduct.’ What is unique about this concept? In what way has it helped Airbus?

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