Airbus: Supply Chain

EADS specialises in aerospace, defence and related products and services. The group includes Airbus, Eurocopter and EADS Astrium, the European leader in space programmes.

EADS is the major partner in the Eurofighter consortium, develops the A400M military transport aircraft, and holds a stake in MBDA, the international leader in missile systems. The group employs over 100,000 people at more than 70 production sites in France, Germany, the UK and Spain as well as in the US and Australia.

Oakland Consulting has been working with EADS over several years to develop and implement an effective improvement programme. This case study briefly describes just one of the hundreds of projects undertaken. It describes the first project undertaken by an EADS Black Belt candidate, recently trained by Oakland Consulting in Lean Six Sigma.

Assignment

Procurement was faced with increasing complexity in its supply chain as a result of the increasing sophisticated programmes such as A380, A 350 and A400M. Tier 1 suppliers were acquiring larger work packages which in turn led to weaknesses in the management of their tier 2 suppliers.

As a result there was an increasing volume of NCR’s and problems within the supply chain that were causing delays, unforeseen costs and risks that need addressing. The team appreciated that the later the problem is identified the greater the cost to the programme. It is estimated that the ratio is 1: 10: 100 (T2: T1: Airbus)

The team wanted to study the symptoms of the existing processes and to identify the root causes and from there to develop effective solutions to enable the Tier 1 suppliers to take more responsibility for Tier 2 supply chain management and reduce or eliminate problems reaching Airbus.

Approach

The team used the DRIVER methodology to systematically analyse the symptoms and from there to develop their plans. The initial key objective was to gain a clear understanding of the Voice of the Customer and Voice of the Business’ i.e. the requirements of the principle stakeholders in the supply chain. This was identified via a series of structured workshops from which key requirements were identified for each stakeholder.

This was followed by the development of an accurate As Is process map and a detailed assessment of the performance of each of the suppliers and the impact on Airbus in terms of cost, quality and time. This allowed the team to develop a gap analysis that helped to prioritise the key issues that needed addressing and this then formed the basis for workshops and brainstorming sessions with 9 key suppliers to identify root causes.

This led to the identification of 6 core difficulties in the supply chain which was supported again with tangible data to that also helped prioritise the teams focus.

A portfolio of solutions was agreed and a To Be process was developed that impacted all the stakeholders. A series of transnational workshop took place to review the pilot that was established in order to refine and optimise the new process. The three key deliverables were:

  • An agreed set of best practices for all the stakeholders
  • A supplier assessment tool
  • A refinement to the GRESS (General Requirements for Equipment and System Suppliers) tool

Prior to the implementation of the above a series of training activities took place and assessment and best practice user guides were developed and deployed to the supply chain. To ensure continued use and improved performance a series of KPI’s and assessment tools were established. Furthermore a list of further activities was published for additional continuous improvement activity.

Achievements

As a result of this action the team managed to develop a shared understanding of the issues facing each of the stakeholders and then to instil a common understanding that one stakeholder problem is every stakeholder’s problem because the impact can rapidly escalate if it is not prevented or resolved quickly. Further benefits included:

  • Instilled a common & shared set of best practices
  • Reduced the overall cost of issues
  • Became embedded in the GRESS User Guide & Training material
  • Impacted many programs and therefore multiple tiers 2 suppliers
  • Estimated conservative cost reduction of 750k€ per annum

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