Julian Moxon/TOULOUSE
Until recently, the manufacture of aircraft was driven by forces that had little in common with the markets into which the resulting products were sold. Lead times were long and out of step with rapid - and often unexpected - changes in demand resulting from a global economy that had little to do with the pace of activity on the shop floor.
The need for radical change was never more apparent than after the Gulf War, when airlines were caught by a sudden fall in passenger demand and had to cancel or postpone aircraft orders upon which suppliers had based their production planning and long lead time orders.
In 1993, Airbus Industrie began looking at what could be done to develop a more flexible, efficient, manufacturing system able to adjust rapidly to changes in capacity requirements. For this to happen, lead times right up the supply chain to the finished aircraft would have to come down significantly, which in turn meant a revision of component supply logistics and a move towards the concept, already pioneered in the automobile industry, of lean manufacturing.
With its final assembly site in Toulouse and four shareholders in France, Germany, Spain and the UK responsible for supplying the major aircraft sections, the consortium faced a complex task. The workshares of each partner could not change, and neither could the system of delivering large structures to Toulouse by aircraft (although a major improvement came with the replacement of the propeller-driven Super Guppy with the larger A300-600-based Beluga Super Transporter).
Airbus, however, was no stranger to changes in the production process, having introduced the twin-aisle A300 in 1974, the smaller A310 in 1983 and the single-aisle A320 in 1988. By 1993, the four-engined A340 was in production, with its twin-engined sister the A330 and the first A320 derivative, the A321, coming on line the following year. The shorter A319 was added in 1996 and has been joined by the even shorter 107-seat A318. This aircraft, and the A319 and A321, is produced at Daimler-Benz Airbus in Hamburg, with the A320 and all twin-aisle aircraft staying at Toulouse. Airbus senior vice-president for programmes and process Horst Emker notes that, as products were added, "the cyclical variations in the product mix also drove the need for change".
Process-orientated
Production had improved as a result not only of progress in contemporary manufacturing technology, but also because of how Airbus aircraft assembly had evolved. "The A330/A340 may be based on the same fuselage as that of the original A300," says Emker, "but the way it is put together is totally different."
Despite this, the consortium was still vulnerable to rapid changes in market demand. "We needed to move from being a functionally oriented organisation to a process-oriented one," says Emker. "The market wanted a reduction in the commercial lead-time [the time between the customer's final definition of the ordered aircraft and delivery] and we had to find ways of doing that while ensuring that quality and on-time delivery didn't suffer."
The aim was to reduce in-house lead time by 50%, while cutting costs "substantially". Emker points out that the two are linked because lead time reduction is related directly to cuts in the amount of work in progress. In turn, this means reducing the number of expensive components waiting for the next manufacturing operation.
In 1993, for the single-aisle line, the time between contract definition freeze (CDF) and delivery to the customer stood at just over 14 months. The target was to reduce that to nine months, which meant that manufacturing would take just six months. In the widebody line, the aim was to cut CDF from just over 16 months to12. At the same time, the price of materials would be renegotiated, "because the take-up rate would be higher".
Reducing build time to below six months has been carefully studied, and rejected, at least for the time being. "Our investigation showed that there is no need yet for a six-month aircraft," Emker says. "It would burden the system too much, would probably increase costs, might raise quality issues and could have a negative impact on flexibility." He adds that the critical path for lead time reduction would probably be that of engine supply, "because we need the engines two months before delivery. That would leave them with just four months to build the engine. It could become a nightmare."
Emker refutes criticism that Airbus does not source major structural components from the world market. He says: "We believe in retaining core competences and centres of excellence." Those centres can then develop their specialities through a long-term investment programme that keeps them up to date with the latest developments in manufacturing technology. This applies to sites such as Einswarden in Germany, which is responsible for fuselage shells for the entire Airbus range (and has a single machine for producing shells for single- and twin-aisle aircraft). "The competitive pressure comes from the marketplace," says Emker. "We tell the partners they have to adjust their prices or make a loss. It's their decision, and it's up to them whether they subcontract or produce the components themselves."
In the Airbus system, each partner is responsible for its own materials purchasing, so that British Aerospace, for example, retains its core competence in building wings, but is free to source materials from wherever it finds the best price and quality. Partners have a constant dialogue on improvements in manufacturing, benchmarking (comparing) new technologies and holding bilateral meetings on engineering and other issues. "One looks over the shoulder of the other," says Emker. "It's a kind of internal competition and it works extremely well."
New numerically controlled machines have brought about another reversal of previous thinking on batch sizes. "At the beginning of the 1990s, people believed in ordering batches of materials annually," says Emker. "This led to high inventories and work in progress, added to which some items were scrapped because of modifications. Now, the idea is to have small batches, even down to single pieces. There is no such thing as an order for 10 sets of wing panels any more. It is essentially single-piece manufacturing. There are virtually no stores."
Parts turned out to order
The result is visible at the engine pylon centre at St Eloi, near Toulouse, where there are no items in storage. "It used to be more efficient to order in large batches, of 50-100," says Emker. "Now, numerically controlled machines give flexibility to turn out pieces to order."
The Airbus inventory fell in value from $5.4 billion to $4.5 billion between 1993 and last year, while sales increased from $8.3 billion to $13.3 billion. That equates to a doubling of manufacturing efficiency "and has bought enormous savings on aircraft and parts".
Aircraft are delivered straight off the line, and "always on time", despite the dramatic increase in production rates and the cyclic changes affecting the industry. "No-one launches an aircraft on speculation anymore," Emker adds.
Cost savings have come about through the shortening of the production cycle and the simple fact that materials are paid for much closer to the moment when they will be incorporated into the airframe - and delivered to the customer. Airbus began to hold meetings on reducing lead time as far back as 1993.
"We identified the critical paths and negotiated to reduce them," says Emker. "We also transferred work between plants where we saw efficiency improvements." He admits, however, this had to be done while maintaining overall partner workshare, although he claims Airbus "definitely competes" with the system that produces the Boeing 777.
A key area of improvement has come with what Emker calls "customer education", meaning that the responsibility for reducing lead times rests also with the customer decision-making process. A glance at the system configuration guide from which airlines choose the equipment for their aircraft reveals the enormous number of options they have. In a manual around 3cm (1.2 in) thick, the airline customer is presented with literally thousands of choices, ranging from the type and specification of engine to the kind of carpet that will furnish the passenger cabin.
To this was added the problem of buyer-furnished equipment (BFE), accounting for up to 7% of the total aircraft cost, in which the airline deals directly with certain equipment suppliers, holds its own competitions and decides what to order. "We've had airlines that forget to order basic things like galleys and seats. We have to remind them to do so, and even help them find a supplier," Emker says, adding that "BFE is the last remaining obstacle to us being in full control of the manufacturing process".
One solution is to move towards a "standard aircraft", with fewer options. While too much standardisation is likely to be unacceptable to airlines as they search for ever more innovative ways of attracting passengers, the story for leasing companies is different, since they need a more generalised aircraft to suit a wide customer base. "We're trying to negotiate the idea of a more standardised aircraft that is delivered with more provisions than normal," says Emker. "We would then develop an options catalogue. We'd say to them: 'The aircraft is sold flyable, certifiable and operational.' It would be up to them to pay for the extra options after that."
The problem has been exacerbated in the past two years because of the increases in production rate. "It can have a disproportionate effect on final assembly," says Emker. To get around it, he says, Airbus is thinking of introducing a new category, "Airbus Supplied Equipment", in which, for example, it would preselect six or seven seat manufacturers from the 20 or 30 on the market, limiting the options to those the manufacturer had deemed to be the best. "We would pre-define certain equipment so that we had more control over the delivery stream." Emker adds: "We've already done it for in-flight entertainment on long-range aircraft."
While some airline heads of purchasing may see such a development as threatening their authority in deciding the options available, Emker is in no doubt that the advantages to the airline in terms of cost reduction through simplified decision-making will soon be clear.
With a 50% market share for 125/375-seat airliners - and, with a backlog of almost 1,500 aircraft, it seems the forward thinking of the consortium will pay ever bigger dividends.
Source: Flight International
