Airbus Business Lines
Airbus is one of the world-leading companies manufacturing commercial jetliners and military airlifters. The company was started in 1970 with its registered headquarter in Leiden Netherlands and other headquarters in Blagnac France, Madrid Spain, and Hamburg Germany. It operates through the following business lines Airbus, Airbus Helicopters, space, and Airbus Defense. The segments in the Airbus company mostly focus on development, manufacturing, marketing, and sales as well as provision of other helicopter-related services (Woo et al 2021). The company’s supply chain is usually linked to its environmental and social impact. They usually focus on integrating high standards of responsibility in their operation to foster a good and sustainable supply chain. The company has direct and indirect suppliers from more than one hundred countries who usually provide components, parts, systems, and services. The suppliers usually have a great impact on the sustainability performance of the company. The company’s business models are proper maintenance, flight management, and aircraft monitoring data which is to be locked in separate silos which are then squabbled together to allow the Maintainance crew to identify a problem and solve it (Nelson, 2020). It is the largest international heavy commercial aircraft OEMs and Aerospace corporation in Europe. The company has a very strong heritage in Europe with more than 180 locations and thousands of suppliers.
The company has over 20 manufacturing plants each producing and assembling different parts of the aircraft but the main plant production of the company is located in Toulouse which is responsible for producing all the airbus widebody aircraft that is A330, A380, A320, and A320 (SANTONINO III et al 2018). The transport and storage of the companies’ parts are always well planned to help it achieve its production goals and serve its customers well, faster, and more efficiently. The company, therefore, works closely with DB Schenker’s who is a third-party logistics provider who helps them develop systems that allow components and assemble lines via area waterway. DB Schenker also has a new airplane hangar which enables just-in-time delivery and proper storage of the airplane parts. The company has a positive reputation which was built through having great market demand, development of products, being innovative, and having quality products services that meet the customer’s needs
Supply chain management involves the flow of products and information among the supply chain stages to maximize profitability. It, therefore, encompasses the end-to-end flow of information, money, and product. It is therefore important for an organization to have better management because they usually affect the organization’s competitiveness. A proper alignment of the supply chain strategy and the business is therefore very essential to ensure better performance (Karimi Gavareshki et al 2019). Airbus is the largest company and most globalized hence having a complex supply chain. it is therefore very difficult to have a better overview of the supply chain management and understand it without proper management (Mazaud,2020). it is therefore very important to always identify the possible disturbances and their impact on the supply chain management. the suppliers can also cause havoc in the supply chain management of the company.
Environmental and Social Responsibility in Supply Chain Management
There are various supply chain strategies that an organization mostly focuses on an Airbus company mostly focuses on integrating high standards of good responsibility in their operation and always fostering a sustainable supply chain through better maintenance of human and natural resources in all the processes of supply and production in a better way.
The company build a vertical integration supply chain in which was to strengthen its foothold in the growing aviation market (Attaran, 2020). The company also has plans to further expand its market in China which has a fast-growing aviation market. According to research, China accounts for a quarter of the Airbus company’s production hence this will help improve their production and still secure a great market share.
SWOT analysis is a very strategic and vital tool that is used by businesses and organizations to do a situational analysis of a business or the organization at a particular time. The analysis helps businesses to identify the factors that help impact the functioning of the company positively and negatively (Boldizsár and K?vári, 2020). Managers in Airbus company uses the SWOT analysis tool to evaluate the company’s strength, weaknesses, opportunities, and threats. This has helped the company to maintain its prominent position in marketing.
The company has a very strong and competitive portfolio because of its strong backlog. Their greatest percentage of the company’s backlog is from international operations which have helped the company to gain a more global footprint with a special momentum with faster annual delivery rates (Seanyen, et al 2021). The main advantage of their strong backlog is that it gives the company great liquidity, high revenues, and a positive credit rating which helps attract more investors.
The company is one of the best global players with a great market share. The company’s footprints are all over the world that is in Africa, Europe, America Middle East, and Asia. A great market share is very important as it helps in leveraging the know-how of the civil business globally.
The company also has very strong momentum in its commercial aircraft. Their strong momentum is usually brought about by their affordable cost, diverse customer base, onboard system and services, and their availability all over the world. The company developed a diverse aircraft which they use for meeting up diverse needs in different geographical regions which requires unique services. The commercial aircraft has 100 to 600 seats hence generating enough revenue for the company.
A strong strategic business plan is another strength of airbus company. In all the divisions that the company operates under that as the helicopters, commercial aircraft, space, and defense their plan is always the best and they have always outperformed their competitors.
In a business weaknesses are those things in a business that brings a lot of disadvantages to the business and hinder it from achieving its goals and objectives (Kathpal and Akhtar,2021). The high manufacturing cost of the airbus has always been a problem in the company which is usually high compared to the other companies such as Boeing.
Importance of Aligning Supply Chain Strategy
There has been delay and problems with the provision of vital services by the company. The cabin objects have always caused delays and its Va350s have always had issues.
These are usually the external factors that usually favor the existence of the business hence giving it a boost and a good competitive advantage (Krivenko, 2021). The Airbus company has a great opportunity of securing more commercial aircraft orders as the demand for air travel is predicted to increase in the coming years.
Technology advancement is also another opportunity for Airbus company. Though the company has been very innovative over the past few years, they still have the opportunity to invest in more innovation as technology keeps on changing. This will then help them in addressing its flaws, operation, and faster delivery of its services.
This is anything that negatively affects the performance of an organization and can damage the product and its ventures (Heiets, Oleshko, and Leshchinsky, 2021). The company deals with a variety of suppliers all over the world who supplies various parts used in manufacturing in the company. This then possess a great risk in possible delays of some products which then will affect the manufacturing processes.
There is also the threat of economic and political scenarios because if there are issues with economy or politics and the supplier is located in the same country there are likely to be delays
The company also faces a threat of losing its market share to its competitors such as the Boeing Embraer, Lockheed Martin, and Bombardier.
In A company, procurement policy helps in the establishment of procedures of the business for the procurement of all the goods and services ensuring that they have all been attained at a cost-effective price, right quality, right time, and right specification. The company supply chain policy relies on reliability, speed, agility, and simplicity. Having a reliable supply chain is an absolute must as it helps the company in meeting the expected demand, and securing new programs for the company in the industry (Kleczka, Buts, and Jegers, 2020). For the company to eradicate issues and disruptions in their supply chain, they are always trying to improve on the quality, time, and cost of the items supplied operational efficiency and continuous suppliers’ improvement.
The company has been outsourcing several supply chain activities. They usually outsource 40% of their working package. Outsourcing is a business practice where a company hires a party outside the company to perform a certain task. Outsourcing helps a company in cutting operational costs while trying to improve productivity (Asatiani, Penttinen, and Kumar, 2019). The company usually outsources the craft design, development, and production of major subsystems of the aircraft to suppliers. This has helped the company to maintain a low manufacturing cost and assembling cost. The company has so many suppliers worldwide but the main and the top suppliers are the Airbus Avionics, AOA-LGG, Vibrio- meter, Goodrich Aircraft interior products, Technofan, and Honeywell Aerospace Electronics systems (Mazaud, 2020). They are very reliable to the company and hence considered the best.
SWOT Analysis in Airbus
Airbus usually offers international transport and cargo transport too. In the transportation of cargo, the Airbus Beluga offers a unique way of transporting oversized cargo. Whenever one travels with Airbus company some policies and procedures need to be followed from fee payments, charges, and baggage charges. The passengers are usually permitted to carry one cabin baggage and other personal items (Kissoon et al 2020). The baggage should then fit the airbus transport international overhead bins (Qiu et al 2021). Airbus transport however offers better and high-level customers satisfaction worldwide. The company also has compensation in case of cancelation of flights and delays. This is usually calculated under the Europe EC 261 regulations. This was introduced mainly to discourage the airlines from canceling their flight at the last minute and ensure that the passengers are aware of their rights in case of flight cancelation and delayed flights. The claiming process is very simple however there are circumstances where the cancelation of flights or delayed flights are unavoidable for the company and because the company is not responsible for situations such as bad weather there is usually no compensation.
Warehouse management usually encompasses all the principles and processes that are involved in ensuring that there is an effective day-to-day running of the operations of the warehouse. This usually includes receiving of products, better organization of the warehouse, enough space, enough labor, proper inventory management, and order fulfillment (Demir, Yilmaz, and Paksoy, 2020). The company management system is usually located in the Hamburg-Hausbruch site which operates as a new material management center for airbus Deutschland GmbH. The center usually assumes that there is complete logistics for the parts of the airbus and other existing programs of the aircraft. The warehouse covers an area of 20,000 Square meters and has small automated parts of the warehouse, a palette warehouse, block storage, and boom. It is usually very expensive and challenging to manage too much stock on the shelf and at the same time ensure safe and proper management without delays (Melo, 2021). To avoid this the company has an automated replenishment setup that meets and fits the needs of the company inventory level. The activities carried out in the airbus warehouse include transport and logistics, inventory management, repairs, storage of tools and services, and outsourcing of materials, services, and solutions.
Reverse logistics usually stands for all the operations that are related to the reuse of any product and materials in the organization. It usually involves recalls, return, repairs, repackaging, resale, recycling, and disposal (Bravo, Vieira, and Ferrer,2021). The main benefits of reverse logistics are that it helps the company in increasing its asset utilization, reduces losses, increases revenue, improves environmental sustainability, and generates a better ROI (Kumar et al 2020). The company uses RFID in its operation. The company stated that the RFID system has a major benefit to their operation.it helps during manufacturing where the three is the provision of accurate information, on the company’s demand, the level of inventory, and the right time for the plane repairs. The company also joined the product -life- cycle management vendors Sopheon plc and siemens business services with the main intentions of setting the industry-wide internet portal to choose reference sources of the RFID implementation. The siemens was also to help promote a better standardization of the RFID usage and the management applications in the products-life cycle (SANTONINO III et al 2018). Reverse logistics however possess several problems to the company because of its complexity, of the reverse logistics networks, and the problem of realizing a better and reliable way of pursuing and monitoring the several parts of end-of-life aircraft in the reverse network.
Airbus’ Competitive Advantage through Global Market Share
Sustainability policy usually defines the company’s commitment towards ethical and environmentally friendly practices in the organization. Reverse logistics is usually considered together with the dimensions of sustainability. In Airbus, company sustainability means uniting the safeguarding the world in a safe, ethical a social, and environmentally responsible way. The company strongly believes that it is its responsibility to have a successful business. sustainability is usually the heart of the company’s purpose which helps in pioneering sustainability aerospace for a safe and united world that is fully integrated into the company corporate strategy (Nishant et al 2019). Their commitment acts as a guide in ensuring that they make the right decisions which will help in contributing to a healthier environment that the company thrives in.
Conclusion
In conclusion, the airbus company’s supply chain management is very important. This is because it is a big company operating globally with over 8000 direct suppliers and 18,000 indirect suppliers who supply various parts and components which helps in the manufacturing of the aircraft. The enormous suppliers’ network has contributed positively towards the growth of the company in terms of value creation, sustainable development, and economic prosperity. The diverse suppliers’ network also poses some problems to the company as there are the risks of delays in case of any disruption in the supplier’s country which disrupts the manufacturing processes in the company. The company is therefore very careful when it comes to the choice of suppliers and they have to clearly state the requirements and the standards in the suppliers’ code of conduct. What matters to them is quality products, timely delivery, cost-effective products without delays. The company is likely to face challenges from other upcoming and already existing companies such as Boeing, it is, therefore, high time that the company became more innovative in its operation and improve its services and operations. This is because the world’s technology is changing and the other companies are continuously being innovative to improve their services and secure their space in the market. The company should continue developing its intelligence program lines of the airbus defense and space which helps the company in unrivaled expertise in satellite imagery acquisition, fusion, dissemination, intelligence extraction, data processing, and control capabilities. With this, the company will always be able to create a comprehensive situational awareness picture and deliver a sophisticated end-to-end possible solution. When it comes to leadership and management the company is likely to face problems if at all the leaders have leaders who are not competent enough to participate in the day-to-day operations of the company. To avoid this in the future the company should always choose the best person to act as a leader in the operations of the company. Airbus company has also been facing a financial crisis which results in delayed production and deliveries. They have therefore been cutting the number of productions of the aircraft. To avoid this challenge in the future the company should try and increasingly look at its open financial markets, invest more in new programs and ensure that there is continuous production that generates more revenue for the company for its financial sustainability.
Airbus’ Strong Momentum in Commercial Aircraft
References
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