Professional Documents
Culture Documents
GMBA+ BLENDED 2
GLOBAL OPERATIONS AND SUPPLY CHAIN MANAGEMENT
PROFESSOR
LUIS EDUARDO SOLS GALVN
1. Industry Context and Competitive Environment
Company Overviews
Business areas: Manufacturer of commercial jetliners and military Business areas: Aerospace and defence related
aircraft. Additionally, designs and manufactures rotorcraft, electronic services.
and defence systems, missiles, satellites, launch vehicles and
advanced information and communication systems.
Global Reach Provides products and support services to customers in Global Reach: Fully-owned subsidiaries in the United
150 countries. States, China, Japan and in the Middle East. More than
150 global field offices.
Employees: Boeing employs more than 170,000 people across the
United States and in 70 countries Employees: 59,000 globally.
Supply Chain: Hundreds of thousands more skilled people working for Supply Chain: Has a network of 1,500 suppliers in 30
Boeing suppliers worldwide. countries
2012 Net income: $3.9 billion 2012 Net income: $1.59 billion (parent company
EADS)
2012 net orders: 1203
2012 net orders: 833
Market Share: 59%
Market Share: 41%
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 2
1. Industry Context and Competitive Environment
Primary customer for Boeing and Airbus is global airline industry. To understand their market
position we need to establish the current state of the global Airline business.
The growing global middle class and increased levels of urbanization are generating sustained levels of
demand.
Passenger traffic rose 5% between 2011 and 2013 and this trend is expected to continue in the long term.
Boeing predicts that there will be 35,000 new aircraft in circulation in 20 years.
Technological advances are making aircraft much more fuel efficient and cheaper to run.
As a result, airlines everywhere are looking to replace older planes and update their
fleets.
Combined with enhanced demand, this is good news for manufacturers like Boeing and
Airbus. Are looking at sustained long-term market growth and a boom in sales.
The Airbus A380 and the Boeing 787 Dreamliner, represent efforts to take the initiative
and tap into the demand for more efficient models.
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 3
1. Industry Context and Competitive Environment
Threat of substitute products Rivalry among existing competitors Threat of new entrants
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 4
1. Industry Context and Competitive Environment
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 5
2. Key Corporate Objectives - Airbus
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 6
2. Key Corporate Objectives - Boeing
Mission Statement:
Be the leader among
the premier industrial
concerns in terms of
quality, profitability
and growth
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 7
3. Marketing Strategies - Airbus
Strategy: Airbus wanted to break Boeings stronghold in long range, big capacity Airplanes
with the new A380 and new technology
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 8
3. Marketing Strategies - Boeing
Strategy: Boeing wanted to meet its need to have a product to compete in the market
for mid-long range air transport
Boeing bets on Point-to-Point Model
o The plane travels directly to a destination, rather than
going through a central hub
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 9
4. Order Qualifiers and Order Winners
Performance (65%)
Reliability Do better than the rest, with less fuel
The Company has to be as reliable as their aircraft. Boeing
and Airbus sell multi-million dollar products to their civil
aviation customers. Airlines base their operations in this
aircrafts and reliability is expected.
Conformance
Product conformance is a must in the civil aviation Serviceability (20%)
industry. Safety standards and Aviation regulatory bodies Make it easy for my operations and give me support
establish very clear rules that have to followed. in time, every time
Perceived Quality
How the product is perceived is very important in this
industry. Current events are a clear example
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 10
5. Main Transformation Process - Boeing
Operational Transformation:
o From integrating separate designs to
design with suppliers
Components had to be built from scratch, and Boeing Suppliers, from four continents to Everett, WA, USA
compatibility had to be gained from the design
phase.
o From manufacturing for customers to
manufacturing with customers
Customers were asked to come onboard during the
assembly process. Insight is gained on both sides.
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 11
5. Main Transformation Process - Airbus
Operational Transformation:
o Design
A3XX project / Not just a copy paste product
Double digit operating cost reduction
More range, quieter and more cargo volume
o Production
Main fuselage, wings, fins and control surfaces
manufactured all over Europe. Assembly takes
place in Toulouse, France. Interiors & further
testing in Hamburg, Germany.
Technical Transformation
Systems Integration
Control / System redundancy Timeline, A380
Size / Performance
Active load alleviation
Digital mock up systems
Advanced composite materials
Central wing box
Smoothly contoured wing cross section
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 12
6. Major Infrastructure Dimensions of the Operation Strategies - Airbus
o US: A350
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 13
6. Major Infrastructure Dimensions of the Operation Strategies - Airbus
Efficient and
integrated
Full supplier Globalization (spread
supply chain financial risks, open new
responsibility
markets)
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6. Major Infrastructure Dimensions of the Operation Strategies - Airbus
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 15
6. Major Infrastructure Dimensions of the Operation Strategies - Boeing
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 16
6. Major Infrastructure Dimensions of the Operation Strategies - Boeing
Air Cruisers Escape slides Kawasaki Heavy Industries Fixed trailing edge, forward fuselage
Alenia Aeronautica Centre Fuselage, horizontal stabilizer Kidde Technologies Fire protection system
Bridgestone Tires Korean Airlines Wing tips, stringers, nose wheel well
C&D Zodiac Windows, Doors Safran Labinal Wiring
Dassault Systemes Tools/software Latecoere Passenger doors
Delmia Corp. Software Messier-Bugatti Electric brakes
Diehl Aerospace Main cabin lighting Messier-Dowty Landing gear structure
Donaldson Air purification system Mitsubishi Heavy Wing box
Monogram Systems Water & waste systems
Eaton Aerospace Pumps, valves, hydraulics etc.
Moog Flight control actuation system
Esterline Flight deck control panels
Panasonic Cabin services system
Fuji Heavy Industries Centre wing box
Parker Aerospace Hydraulic subsystem
GE Aviation Landing gear actuation and control system, etc
PFW Metallic tubing and ducting
GE Engines Engines
PPG Aerospace Dimmable windows
GKN Aerospace Composuite mat for wing ice protection
Displays, pilot control systems,
Goodrich Engine nacelles, numerous systems Rockwell Collins
communications
Auxilliary power unit, environmental control Rolls-Royce Engines
Hamilton Sundstrand
systems Saab Cargo doors
Honeywell Navigation Securaplane Emergency lighting systems
Intercim Software Forward fuselage, flight deck, engine
Spirit Aerosystems
Intertechnique & Avox Oxygen systems pylons etc
Ipeco Flight deck seats Toray Prepreg composites
Jamco Lavatories, galleys, bar units etc Ultra Electronics Wing ice portection
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 17
6. Major Infrastructure Dimensions of the Operation Strategies - Boeing
Engines
UK & Ohio, US
Landing Gear
UK
Passenger entry doors Forward Fuselage
France Japan
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 18
6. Major Infrastructure Dimensions of the Operation Strategies - Boeing
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 19
6. Major Infrastructure Dimensions of the Operation Strategies - Boeing
When they required to make design changes, Boeing follows a very rigid process to ensure that the overall integrity of
the aircraft is not compromised. This redesign is a process that involves participation from representatives throughout
Boeings operations and its supply chain.
Senior engineers for all different parts of the aircraft go over the
proposal to determine how the proposed change it will affect their
section.
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 20
7. Companies Culture and Values - Airbus
Companys Culture: Airbus day-to-day operations are AFCs, Airbus Key Competencies,
guided by a strong commitment to integrity, transparency a set principles within Airbus
that encapsulates the mission
and professionalism across its operations: each and every statement of the organization.
employee is committed to defending high ethical standards The skill of Airbus employees
in business relations inside as well as outside the company. are cultivated through regular
workshops and training,
ultimately leading to career
advancement and staff
retention.
ISO 14001Certified.
Environmental awareness and
responsibility permeates the
procedures and processes
associated with R&D.
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 21
7. Companies Culture and Values - Boeing
1. Leadership
2. Integrity
3. Quality
4. Customer Satisfaction
5. People Working Together
6. A Diverse and Involved Team
7. Good Corporate Citizenship
8. Enhancing Shareholder Value
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 22
8. Major Capabilities Developed - Supply Chain Management
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 23
8. Major Capabilities Developed - Technical and Operational
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 24
9. Level of Alignment
Order Winners
- +35% seating - Cheaper and efficient airplanes
- +49% more floor space - -20% less fuel & -10% costs/seat
- -15-20% cost per seat - -20% operating costs
Performance (65%)
- -13% less fuel - -30% maintenance costs
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 25
9. Level of Alignment - Orders and Deliveries
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Orders 78 0 34 10 10 24 33 9 4 32 19 9 0 262
Deliveries 0 0 0 0 0 0 1 12 10 18 26 30 9 106
First time in 2011 delivered according to schedule / As of July 2012 three aircraft per month
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Orders 56 235 157 369 93 -59 -4 13 -12 82 930
Deliveries 0 0 0 0 0 0 0 3 46 17 66
Up until 2009 announced 5 consecutive delays / 787 was first certified in August 2011
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 26
10. Future Challenges
Internal:
o Safety Standards
As of late, there have been noticeable lapse in the enforcement of safety standards.
Which reduces brand reputation and customer confidence
In the future, the efficiency of outsourcing the various parts of a these aircraft may
no longer be as cost efficient . The cause might be the increasing competitiveness
of external manufacturers due to the advent of globalization and changes within
the global economic landscape
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 27
10. Future Challenges
External:
o Fuel price
Although fuel prices are purchases on margins, the cost of fuel has
increased in volatility
o Politics:
Cut budgets to defense purchases threaten the jobs markets of local
communities where Boeing offices are located.
o New Competition:
New market entrants may vie to compete with Boeing on a quality and
technological front while reducing prices to increase its viability in the
market.
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer, Lpez Rivera, Papadellis Page 28
Competing in Commercial Aviation for the Airlines TEAM CLARO!
Case in point : Airbus A380 vs. Boeing 787 Operations and SCM CHAVES GUILLERMO, GOMME,
JOHNSON, LANGKAMMER,
Thank You!! LPEZ RIVERA, PAPADELLIS
GMBA+ BLENDED 2
GLOBAL OPERATIONS AND SUPPLY CHAIN MANAGEMENT
PROFESSOR
LUIS EDUARDO SOLS GALVN
Main Sources
1. Industry Context and Competitive Environment
http://www.srr.com/article/aerospace-industry-overview-and-update-fall-2011
http://travel.cnn.com/explorations/life/boeing-747-8-and-airbus-a380-death-match-152563
http://www.boeing.com/boeing/commercial/cmo/
3. Marketing Strategies
http://www.airbus.com/aircraftfamilies/passengeraircraft/a380family/
http://www.boeing.com/boeing/commercial/787family/index.page
9. Level of Alignment