They say that every cloud has a silver lining, and for Airbus, the downturn in the commercial aviation industry is proving to have its upside as the company continues to integrate on two fronts - into the single integrated Airbus company and as part of EADS. "Difficult times are giving us the opportunity to change things which it couldn't change before, or speed up things where you couldn't have the right speed before," says Gustav Humbert, Airbus's chief operating officer and EADS executive committee member.
Adds Bill Black, Airbus senior vice president of quality and integration: "Ironically, with the reduction of orders, we have actually increased capacity" to carry out integration projects.
Integration reflected "evolution - not revolution," say Airbus executives, who also describe the two integrations under way as "a parallel approach". Both processes are unalterably linked. For instance, Black oversees both integrations for the aircraft manufacturer. Most activities focus, however, on internal Airbus integration. "We have a big organisation, with several hundreds of single projects and each has a milestone and a timescale with concrete costs and concrete savings," Humbert says.
Airbus's integration will build on existing European centres of competence: wings in the UK, the cockpit in France, the fuselage in Germany and the horizontal stabiliser in Spain. These elements are key to focusing integration in purchasing, research and development (R&D) and central functions. Airbus's purchasing power is expected to be the single strongest contributor to the overall EADS value generation scheme. Abolishing duplications in R&D is crucial as Airbus launches its largest ever development projects, on the A380 ultra-large aircraft and the A400M airlifter.
Already Airbus operates more efficiently than before integration last summer because there is no longer any room for gamesmanship between competing partners, Humbert suggests. Before integration, Humbert had first-hand knowledge of the psychology at work in his role as head of Airbus's German partner Dasa Airbus. "As a German chief executive, I knew very well the cost structure, the unit cost of a part in my plant. I didn't know what it was in the UK or France or Spain because they were somehow competitors. We were sitting there and dealing prices with Airbus Industrie, and if you deal with someone else's prices, you don't tell them what your cost is. It was sort of a poker game - but that's finished."
"So now, for the first time," he says, "we know the real costs, and we can really allocate the work where we have the best cost structure." A key to that success is an internal benchmarking programme under way that aims to pinpoint and share existing best practices throughout the company.
"Sharing best practice is easy to say, difficult to do," says Black. "There's a lot of personal feeling involved. It's easy to say work together. At the beginning, everyone believes their way is the only way. The first step is to open the doors which have been closed, and then open the minds - which is genuinely challenging." Now, however, Black says, "we're seeing genuine exploitation of best practice. Most people are now open to thinking about new ways of working."
External benchmarking is next. As benchmarking with rival Boeing on a final assembly line will be difficult "because we won't give them our details and they won't give us theirs", Humbert believes that "insight from comparable mass production industries such as the automotive business can be valuable." Two new plant managers have been recruited from the auto world, Humbert says, in part to bring in "challenging ideas because we cannot be challenged by the market".
Part of any reorganisation is determining who will fit which slot - in Airbus' case, no small feat considering the number of top-level players who were vying for the top 50 executive roles as well as the high sensitivities at play. An outside consultant was involved, to provide a filter against filling the positions with "people who might fit from the passports and from personal relationships", Humbert says, adding that decisions were "logical but also brutally taken. It's a huge task. It's not easy if you are 50 years old, and were the head of a big entity before, and you have to apply for a new job. But we did it, and everybody had to do it for the top 50 positions."
Source: Flight International
