Operation Management Practices at Airbus During Covid-19
Digital business operation management is considered as the notion of infusing the business processes with automation, intelligence, and agility to establish operational models that improve performance and delight customers. Due to the sudden outbreak and onset of Covid-19, the aviation industry is found to be adversely affected, witnessing challenges in terms of financial challenges, workers shortage, business survivability, and others. During the pandemic situation, digital strategy, market needs, and operation management are found to become an integral function for businesses operating across the mentioned industry to stabilise their present and future business operations. Thus, the subsequent section aims to provide brief evaluation about the operation management practices at Airbus in relation to the Covid-19 situation with the help of Hayes and Wheelwright model. The way selected organisations have responded to the current digital transformation has also been underlined in the adjacent sections. Along with this, lean and Total Quality Management (TQM) that can be applied to manufacturing practices in the context of Airbus has been demonstrated briefly.
Operation management is considered as the administration of the business’s practices for establishing high-efficiency levels at the workplace. Operation management is found to be emphasised in converting labour and materials into services and goods efficiently that drive profitability and overall organisational growth. In the context of the manufacturing aviation industry, operation management is found to have relied upon the management of the production activities for ensuring smooth operational flow without any kind of disruption (Zhang et al. 2019). However, after the outbreak of Covid-19, the mentioned industry has witnessed adverse operational disruptions and work discrepancies that generate questions about the survivability of the market. In this regard, the case of Airbus can be interlinked as the company has witnessed a huge financial decline after the outbreak of Covid-19. A news report published in 2020 underlines Airbus slowing the production of planes after they had witnessed a loss of £1.7bn due to the pandemic situation. Along with this, the order for the new aircraft also collapsed during the second quarter of 2020 due to which the company had to cut jobs of 15,000 employees (Jolly, 2020).
Figure 1: Hayes and Wheelwright model
(Source: Bophela, 2022)
The operational management of Airbus during Covid-19 can be interpreted by considering Hayes and Wheelwright model. As mentioned by Bophela (2022), Hayes and Wheelwright are found to be associated with four specific stage organisations such as internally neutral, externally neutral, internally supportive, and externally supportive respectively. The operations of Airbus in relation to the pandemic situation can be interlinked with the stage three organisations, which are internally supportive. The key reason behind this statement is that according to the Hayes and Wheelwright stage three organisations are found to have operational strategies that are being linked with as well as derived from predefined organisational strategy. This reflects objectives of the operational performance that are supportive and aligned with the overall organisational objectives that maximises the chance of obtaining competitive advantages (Shukla and Adil, 2020).
In relation to Airbus, it is identified that a “Realigned strategy” can be considered as one of the best approaches that the company has undertaken in response to Covid-19. The company has been ramping up its production function to meet the growing needs of its target customers during the pandemic situation (Basu, 2022). Along with this, the company had axed its global workforce and minimised its investment due to the work discrepancies after the sudden outbreak of Covid-19. Despite these challenges, the realigned strategy of Airbus can bring opportunity in this fluctuating aviation industry. As compared to the market competitors, Airbus is found to be strong, and relying on the reinforced strategy enhances the chance for the mentioned company to strengthen its existing and future business growth.
Hayes and Wheelwright Model
Along with this, in order to meet the needs of the market and people across the globe, Airbus had made some modifications to their A330 as well as A350 family aircraft (Airbus, 2020). The modification offers airlines to incorporate freight pallets into the seat track of the cabin floor directly after the removal of the seats in economy class. These operational initiatives are undertaken by Airbus to enhance their growth opportunities by addressing growing demands for the humanitarian flights for transporting vast amounts of medical equipment walking with other essential supplies across the globe.
The modification carried out by Airbus is found to be packaged for the operators as “Airbus Service Bulletin (SB)”. In relation to this arrangement, Airbus illustrated their engineering work scope as well as managed processes for achieving one-time certification from “European Union Aviation Safety Agency (EASA)” (Airbus, 2020). In this regard, considering the mentioned third stage organisation from the Hayes and Wheelwright model, the company showed their best capabilities that helped them to interlink their competitiveness with required operations. Airbus is found to exploit its operations to meet the demands of target audiences during pandemic situations and enhance its market share.
The advent of technology and adoption of technology-based solutions has opened up new opportunities for companies to strengthen their operational efficiency and adjust themselves easily in the fast-changing business environment. As mentioned by Tardieu et al. (2020), digital transformation has changed the way business entities operate traditionally. Covid-19 pandemics generate sudden urgency for companies to transform their overall business operation digitally in order to prevent business from any kind of severe consequences. Business operations operating across the aviation industry also tried to utilise emerging digital technology-based solutions to meet the demands of target audiences accurately. Covid-19 is found to accelerate the adoption and incorporation of digital technology in order to maintain smooth operational activities during the crisis.
Figure 2: Airbus digital capabilities
(Source: Airbus, 2020)
In the context of Airbus, the Covid-19 crisis brings opportunity in the field of digital transformation. Digital transformation enhances the chance for Airbus to generate profitability margins throughout the different business operational domains during a crisis. For example, “Data-Driven Digital Transformation” promotes the business efficiency and operational effectiveness of Airbus. A news report published in 2021 underlines Airbus has been typing to offer more customer-centric services with the help of data-driven strategies. After the incorporation of a data-driven digital approach, the company is able to address and solve customer-related challenges such as product building or shipping delays (Horwitz, 2021).
The mentioned organisations have also shown their preferences for the adoption of the Internet of Things (IoT) in their operational activities to enhance their overall operational and service efficiency. Instead of relying on collecting new points of data, Airbus selected to obtain its own data house in order to store existing available data in an asynchronous manner that positively enhanced its chance to accomplish business needs. Digital transformation of Airbus can be interlinked with Schumpeter innovation theory as the organisation has undertaken innovative approach to minimise operational cost and maximise business profitability.
Lean and Total Quality Management for Manufacturing Practices at Airbus
Figure 3: Schumpeter innovation theory
(Source: Schallmo and Williams, 2018)
On the other hand, it has been identified that due to the outbreak of Covid-19, provides opportunities for Airbus to reinforce its digitalisation potential in aircraft manufacturing. For example, it is identified that the adoption of different technology-based collaborative tools helps the company to shift their on-site activities remotely systematically (Schallmo and Williams, 2018). In addition to this, the company also perceived the way incorporating digital tools strengthens their planning, productivity, and performance. Presently, Airbus is found to have digital dashboards that help to determine their performance and identify their improvement areas in accordance to which proactive measures can be undertaken. Along with this, the existing open data platform of Airbus namely “Skywise” helps them to connect operations, engineering, and in-flight data that improve their overall business efficiency (Airbus, 2020). The aforementioned company is also trying to introduce “real-time location tracking” platforms that will foster their operational activities in terms of understanding customer behaviour and changing market needs in a more accurate and systematic manner before and after Covid-19.
Figure 4: Characteristics of Skywise
(Source: Airbus, 2020)
The existing employees of Airbus are found to show their proactive commitment and engagement to reinvent, realign, and adapt new normal business operations to maintain organisational competitiveness (Marion et al. 2021). Along with this, the company is found to take digital transformation initiatives in different operational fields such as establishment of social media presence, aircraft recycling, maintenance programme, and others. The company underlines that before digitalisation the company had witnessed about US$42 billion in inefficiencies within the industry. In contrast, after digitalisation, they minimise operational inefficiencies to US$10 billion respectively (Holland, 2021). Thus, it can be articulated that by perceiving the effectiveness of current digital and technology-based solutions, Airbus incorporated emerging technology to upgrade their operations and meet the business as well as target audiences’ needs during and post-Covid era.
Lean and Total Quality Management or TQM is considered as the system that is associated with principles of TQM and lean manufacturing. The entire system is found to be emphasised upon accomplishing customer satisfaction by eliminating wastes generated in any operational process at the workplace (Khalili et al. 2018). TQM and lean are found to be interlinked and similar concepts as both of the mentioned aspects help to incorporate continuous process improvements and enhance the chance for business competitiveness by sustainability strategy. With the growing concern of environmental sustainability and continuous improvement for maintaining business competitiveness, every business entity, especially those that operate across the aviation industry, is found to show their preferences for the adoption of lean manufacturing processes and TQM. In these contexts, the concept of Six Sigma can be interlinked to justify the statement (Schmuck, 2021).
Figure 5: Six-Sigma Theoretical approach
(Source: Demir and Paksoy, 2021)
Six-Sigma is considered as the lean TQM that helps and supports business entities to improve their business process capabilities. Application for incorporation of Six Sigma in the manufacturing process helps companies to improve their performance, employee morale, and quality of services or products by eliminating errors or process defects (Demir and Paksoy, 2021). In the context of the Aviation industry, it is identified that lean management and TQM can serve as beneficial to maintaining continuous process improvements by improving operational activities. In the context of Airbus, it can be mentioned that implementing lean or sustainability strategies can minimise process waste and increase operational efficiency. Airbus is found to be at the beginning of the adoption of lean manufacturing processes. The key reason behind this statement is that the operational head of Airbus has been taking lessons from the former employers across the car industry to minimise the production time and eliminate production delays.
Selected Organizations Response to the Current Digital Transformation
As mentioned by Tucci et al. (2021), businesses operating across the aviation industry that are able to incorporate lean or sustainability strategies can cut their respective operational cost while strengthening customers and employee experiences. In addition to this, a sustainability strategy also helps companies to improve their on-time performance and minimise customers’ waiting time, creating working availability for ground and aircraft assets. This also enhances the chance for obtaining employee engagement and improves overall operational efficiency at the workplace. Achieving business competition has become one of the key aspects for every business entity. In this regard, business entities are found to struggle hard in terms of adopting strategic sustainability strategies that can bring opportunity and business competitiveness (Tucci and Neto, 2019).
In the context of businesses like Airbus in the aviation industry, a lean strategy like the Six Sigma concept, which is found to be based on DMIC theory (Define Measure, Analyse, Improve and Control), can be incorporated as it supports businesses to link their corporate and strategic business strategy with the ongoing operational practices. This, in turn, can maximise the chance for the aforementioned company to accomplish its business goals during and in the post-Covid era. On the other hand, it is seen that lean Six Sigma is a data-driven and facet-based improvement principle that helps companies to improve performance by determining any kind of process defects (Hickey et al. 2018).
Figure 6: DMAIC
(Source: Hickey et al. 2018)
For example, in the context of Airbus, it has been identified that the company has already implemented a data-driven approach to digital transformation to standardise its working activities. Thus, the existing initiatives in terms of digital transformation maximises the opportunity for Airbus to gain competitiveness and business growth by implementing lean manufacturing processes in the future.
Conclusion
In the context of the above discussion, it can be articulated that digital transformation has gradually changed traditional business operations. The sudden outbreak of Covid-19 is found to generate urgency for every business entity irrespective of its size to adopt digital solutions to continue their operational process accurately during a crisis. From the discussion, it has been identified that Airbus is found to be a stage 3 organisations in accordance with the Hayes and Wheelwright model. By analysing the model, it has been identified that the company has been forced on determining the needs of the market and aligning i9t with its corporate strategy to gain success. On the other hand, the aforementioned company has also responded to the digital transformation and incorporated a data-driven digital transformation approach to achieve business competitiveness. Other than this, it has been identified that by implementing lean manufacturing like Six Sigma, Airbus can improve its operational performance more efficiently in the future.
References
Airbus, 2020. Airbus develops solution for airlines to use their widebody aircraft for pure cargo operations during the COVID-19 pandemic. [Online]. Available at: <https://www.airbus.com/en/newsroom/press-releases/2020-04-airbus-develops-solution-for-airlines-to-use-their-widebody> [Accessed on 20 March 2022]
Airbus, 2020. Digital Manufacturing: An Opportunity Amid the Pandemic. [Online]. Available at: <https://acubed.airbus.com/blog/adam/digital-manufacturing-an-opportunity-amid-the-pandemic/> [Accessed on 20 March 2022]
Basu, A., 2022. Airbus’ Realigned Strategy Can Be the Best Response to the European Aerospace Industry’s Distress Signal. [Online]. Available at: <https://isg-one.com/articles/airbus-realigned-strategy-can-be-the-best-response-to-the-european-aerospace-industry-s-distress-signal> [Accessed on 20 March 2022]
Bophela, M.J.K., 2022. Analysing Stokvels Development Through the Lens of Layered Conceptual Framework. Technium Social Sciences Journal, 29, pp.458-470.
Demir, S. and Paksoy, T., 2021. Lean management tools in aviation industry: New wine into old wineskins. International Journal of Aeronautics and Astronautics, 2(3), pp.77-83.
Hickey, E.J., Halvorsen, F., Laussen, P.C., Hirst, G., Schwartz, S. and Van Arsdell, G.S., 2018. Chasing the 6-sigma: drawing lessons from the cockpit culture. The Journal of Thoracic and Cardiovascular Surgery, 155(2), pp.690-696.
Holland, J., 2021. Airbus creating a digital future as Covid crisis “unleashes creative energy” and accelerates services revolution. [Online]. Available at: <https://www.aviationbusinessnews.com/mro/airbus-creating-a-digital-future-as-covid-crisis-accelerates-services-revolution/> [Accessed on 20 March 2022]
Horwitz, L., 2021. Data-Driven Digital Transformation Propels Airbus to New Heights [Online]. Available at: <https://www.iotworldtoday.com/2021/01/19/data-driven-digital-transformation-propels-airbus-to-new-heights/> [Accessed on 20 March 2022]
Jolly, J., 2020. Airbus slows plane-making as Covid-19 leads to £1.7bn loss. [Online]. Available at: <https://www.theguardian.com/business/2020/jul/30/airbus-slows-plane-making-covid-19-loss-aircraft-orders> [Accessed on 20 March 2022]
Khalili, A., Ismail, M.Y., Karim, A.N.M. and Daud, M.R.C., 2018. Soft total quality management and lean manufacturing initiatives: model development through structural equation modelling. International Journal of Productivity and Quality Management, 23(1), pp.1-30.
Marion, J.W., Richardson, T.M. and Anantatmula, V., 2021. Managing Quality in Aviation Projects. Engineering Management Journal, pp.1-13.
Schallmo, D.R. and Williams, C.A., 2018. Roadmap for the digital transformation of business models. In Digital Transformation Now! (pp. 41-68). Springer, Cham.
Schmuck, R., 2021. Global supply chain quality integration strategies and the case of the Boeing 787 Dreamliner development. Procedia Manufacturing, 54, pp.88-94.
Shukla, G.P. and Adil, G.K., 2020. Exploring sustainability implications for manufacturing strategy decision areas-a new model with a case study. Procedia Manufacturing, 43, pp.352-359.
Tardieu, H., Daly, D., Esteban-Lauzán, J., Hall, J. and Miller, G., 2020. Case study 6: The digital transformation of manufacturing. In Deliberately Digital (pp. 269-280). Springer, Cham.
Tucci, H.N.P. and Neto, G.O., 2019. Analysis of application of Six Sigma in refuelling process in Brazilian airline. The Aeronautical Journal, 123(1260), pp.265-282.
Tucci, H.N.P., de Oliveira Neto, G.C., Rodrigues, F.L., Giannetti, B.F. and de Almeida, C.M.V.B., 2021. Six sigma with the blue economy fundamentals to assess the economic and environmental performance in the aircraft refueling process. Renewable and Sustainable Energy Reviews, 150, p.111424.
Zhang, W.J., Wang, J.W. and Lin, Y., 2019. Integrated design and operation management for enterprise systems. Enterprise Information Systems, 13(4), pp.424-429.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
