The aerospace industry's supply chain can be brutally complex. Building just one aircraft requires the participation of thousands of suppliers large and small. And, as manufacturers come to rely more heavily on external partners for larger portions of the plane, the challenge of coordinating all of those elements becomes greater than ever.
Airbus oversees a global supply chain of more than 7,800 suppliers from around the world. Each of those partners has a role to play in helping the company to meet production targets and fill customer orders, which currently equate to 10 years of production.
Some suppliers, though, are more critical than others. To prevent disruptions that could bring production to a halt, the company needs to know which ones are likely to have the greatest impact on operations. It must assess their individual levels of stability and maturity, and be prepared to take action based on that knowledge.
Given the fact that 80 percent of an aircraft’s content is procured, maximum supply-chain efficiency is key. Often that requires continual, direct contact with vendors. James Snow, head of supplier development for Airbus, oversees a team of 100 consultants who spend the lion’s share of their time onsite with suppliers.
Technology, especially in the age of the digital supply chain, is equally important. To keep tabs on the supplier base, and generate active intelligence on its reliability, Airbus has developed what it calls a digital control room.
The tool replaces the traditional paper-based method of supplier monitoring with technology that allows for rapid access to information throughout the Airbus supply-chain network. It connects operational teams scattered around the globe, and cuts back sharply on e-mail traffic and redundant reporting.
The old control room focused on Airbus’s top 80 suppliers, providing a quick scan as to where the manufacturer should be focusing its energies, says Snow. That method worked well enough, especially during ramp-up of production for the A320 in 2014. But then came the order from top management: replicate the practice for Airbus’s entire supply chain, and do it digitally.
Production on the Rise
Given the company’s ambitious plans for expanding production, maximum efficiency and control of the supplier base was crucial. Airbus was increasing production of the A320 from 42 to 50 aircraft per month, and there was talk of hitting 60. Then there’s the A350, the company’s newest product, which it plans to turn out at the rate of 13 per month within the coming year. In all, Airbus’s order backlog amounts to more than 6,800 aircraft.
For the first time, the digital control room links operational teams domiciled worldwide. With the help of a visual intuitive system, built on a web-based platform, it provides for the real-time flow of information.
Each Airbus supplier is furnished with a unique ID card, tied to every activity that the vendor performs for the manufacturer. The control room itself is designed in the form of a visual management board, with multiple “zones” that report on supplier activity and status. Each object to be monitored is represented by a digital card, created by the user in the process of reporting key actions. The card is updated as long as the relevant topic remains open. It’s deleted when the action plan is closed.
Cards can be filtered according to multiple criteria, including aircraft program, procurement domain, degree of topic criticality, and supplier site. A color code, signaling “good,” “bad,” “critical” or “unknown,” allows Airbus to see at a glance the progress and status of any given action.
The tool includes the ability to perform a rapid “health check,” lasting between 10 and 15 minutes, which assesses a targeted supplier site based on predefined criteria. In the process, Airbus can quickly identify any stress points, risk factors or weaknesses in the supplier’s operation.
Airbus evaluates four factors related to its suppliers: their overall performance, industry capacity, industry maturity and industrial risk. Together they help the manufacturer to assess suppliers’ ability to keep pace with the heavy demand that Airbus is working to satisfy.
Collaboration, Not Talk
Under the old system, says Snow, teams would show up on site in the case of a potential problem, “but would spend far too much time trying to explain what the issue was, and not enough time working with suppliers.” Now, Airbus is better able to identify hotspots, plant issues and the need for escalating corrective action.
Across its supply chain, Airbus today can ensure that its supplier-development teams are focused on the right mission. They concentrate on eight key skills: recovery, transfer of work, advanced product quality planning (APQP) and Six Sigma quality benchmarks, problem solving, operations management, lean supply chains, industry assessment and capacity assessment.
“The tool shows where people are, what they’re working on, and whether they’re aligned with top management,” says Snow.
The primary benefit of the digital control room, he says, is “global trust.” Through a tool that’s available to users around the clock, Airbus gains unprecedented transparency of its suppliers and production activities. The latest updates, as well as necessary actions, are available for all to see.
The digital control room simplifies the process of supplier management, Snow says. Airbus’s internal reporting workload has been reduced by more than 50 percent. Some 1,200 active users have replaced formal meetings with more direct supplier collaboration. Faster decision-making allows Airbus to keep its commitments to customers, he adds.
Risks associated with future work are more clearly understood than in the past, and can be headed off before they disrupt production. Most importantly, when it comes to addressing problems, everyone is on the same page. Says Snow: “There are no more orphan action plans.”
Next, Airbus plans to introduce a mobile version of the digital control room, to improve accessibility when teams are onsite with suppliers. Snow says the company is working to integrate additional functions, including engineering and contract support, in order to develop predictive key performance indicators.
The tool remains internally based for the moment, “but the idea of opening it up so that we can have shared action plans with suppliers is something we’re looking at,” says Snow.
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