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NATEP and the Need for

Supply Chain Excellence

NATEP Showcase, 20 September 2016

Stephen Gregory Airbus UK

© AIRBUS Operations LTD. All rights reserved. Confidential and proprietary document.

NATEP and the Need for Supply Chain Excellence

• The market

• Growth in air travel

• What this means to Airbus

• NATEP

• Opportunity

• What are your customer’s requirements?

• Current performance

• An Airbus perspective UK and Global

• Why

• My place in the world

• Summary


Air travel has proved to be resilient to external shocks

The market


Air traffic will double in the next 15 years

The market


• Airbus is growing

AIRBUS Today…

0

200

400

600

800

1000

1200

1400

1600

Airbus deliveries and orders 1989 to 2015

Deliveries

The market


• Airbus is growing

AIRBUS Today…

0

200

400

600

800

1000

1200

1400

1600

Airbus deliveries and orders 1989 to 2015

Net orders

Deliveries

The market


AIRBUS Today…

*data July 31 2016

0

1000

2000

3000

4000

5000

6000

7000

8000

Net order backlog

Backlog

Current

backlog of

6815* A/C ~10 years of

work

The market


Customer 1st…

• Production will ramp up to meet customer demand

• The whole supply chain needs to increase its performance and capacity

inline with their customer expectations

Rate / month* today 2020 Increase

SA 47 62 32%

LR 5 9 80%

A350 5 12 140%

A380 2 1 -50%

A400M 2 2 static

*Airbus Official rates 109

The market


NATEP – an opportunity

• The supply chain therefore needs to:

• Embrace the opportunity

• New thoughts, new ideas, new ways of working…


Keep your eye on the prize

• A NATEP project requirement:

• Show clear benefit technically and have a clear path to commercial exploitation…

Cost

Quality Delivery

Customer requirements



Cost

Quality Delivery

• Increase capacity…




Cost

Quality Delivery

Suppliers

Customers

Manage /

Decrease

Risk



Keep your eye on the prize – because it’s only good business when you sell it!

Cost

Quality Delivery

Suppliers

Customers

Manage /

Decrease

Risk

Cash Flow

and Profit



Airbus supply chain performance

• Airbus Airframe performance

• Global average Quality performance = 759 ppm / month*

• UK average Quality performance = 5584 ppm / month*

• Global average Delivery performance = 85% / month*

• ~10.5M late deliveries per annum

• UK average Delivery performance = 82% / month*

• Is this the USP UK PLC want to sell to the globe?

• If the UK wants to maintain and / or increase it’s market share then we need

to take immediate action to improve performance

• NATEP is one part of the solution…

*data Jan 16 to July 16

Current performance

https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=&url=https://es.dreamstime.com/imagen-de-archivo-confrontacin-con-la-realidad-mark-box-realistic-potential-possibility-image35852831&psig=AFQjCNGQP9f7boSqM50DsNpBBPlh3cvU8w&ust=1472112905204162


The Need for Supply Chain Excellence…

• But there is always more to do…

• Continue to use NATEP to exploit (new) technology

• Work smarter and drive out waste in our supply chains

• Utilise Supplier Development programmes e.g. SiG, SC21, etc.

• Identify where and why we are failing and correct the root causes

• And tackle bottlenecks

• Let’s build UK PLC to be:

• a centre of competitive excellence,

• a centre of technical excellence and

• continue the journey to success….

Current performance

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwiJtvCZztnOAhWlHJoKHbeVB4cQjRwIBw&url=http://asmithblog.com/fear-reality/&psig=AFQjCNGQP9f7boSqM50DsNpBBPlh3cvU8w&ust=1472112905204162&cad=rjt


Customer

Tier 1

Tier 2

Tier n

Tier n

Tier 2

Tier n

Tier 2 Tier 2

Tier n

Tier 2

Tier n

Tier 2

Tier n

Tier 2

Tier n

Tier n

Tier 2

Tier n

Tier 1

Tier 2

Tier n

Tier 1

Tier 2

Tier n

Tier 1

Tier 2

Tier n

Tier 1

Tier 2

Tier n

Tier 1

Tier 2

Tier

n

The Aerospace supply chain is not a simple chain…

It is an interwoven web

My place in the world


Airbus Supplier Mapping - UK

Airbus has over 935 known UK suppliers

• Approximately 165 tier 1’s


Airbus Supplier Mapping – UK dependencies



The Need for Supply Chain Excellence…

• Why…

• Because aerospace is a global business

• UK PLC need to ensure it is internationally competitive



Summary

• You are all important members of the Aerospace supply web

• The market is growing and represents a big opportunity for UK PLC

• It’s up to you to take it…

• NATEP, SiG and SC21 represent a big opportunity to improve our businesses

• We all need to be more competitive

• UK QCD, capacity, capability and risk management all need to improve

• OTIF, ‘Right first time’ is what customers pay for!

• You’ve made a start

• What else could you do?

• What’s in it for me?

• The ability to offer your customers a new option that your competitors cannot match!

Month 20XX Use Tab 'Insert - Header & Footer' for Presentation Title - Siglum - Reference

https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=&url=https://aroraprashant.wordpress.com/2014/11/20/knowledge-beyond-the-knowledge-management-the-5-top-challenges/&bvm=bv.132479545,d.d24&psig=AFQjCNHLL6H_-rxhEOilNwNUMvvZ4akHLQ&ust=1473773872479094


Month 20XX Use Tab 'Insert - Header & Footer' for Presentation Title - Siglum - Reference

© AIRBUS Operations LTD. All rights reserved. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS Operations LTD, No intellectual property rights are granted by the delivery of this document or

the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS Operations LTD. This document and its content shall not be used for any purpose other than that for which it is supplied.

The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, AIRBUS Operations LTD will be pleased to explain the basis

thereof. AIRBUS, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered trademarks.

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