Production and Procurement Management of Research Paper

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Wings:

Airbus A350 will consist of new all-combined wings that will be common to all the variations of the A350 airliner family. The newly designed wings will be the biggest wing to be ever created for a mid-size / wide-body aircraft capable of boosting the typical cruise speed and increasing the maximum operating speed. The new wings design will incorporate an innovative trailing-edge system and an improved dropped-hinge flap that allows the closure of the space between the trailing edge and flap with the spoiler.

Cockpit:

The production of Airbus A350 family of airliners will incorporate a revised configuration of the cockpit to adopt LCD screens that are different from the Airbus A380-sized display. The revised design will include two central displays and a solitary flight/navigation display for each pilot. While the two central displays will be built up on top of each other, the solitary flight/navigation display will have an on-board information system next to it. The new revised cockpit design will allow further developments in navigation technology to be mounted on the displays. The new cockpit will be able to merge data from various sources as well as flight management sensors and control of air systems because of flexibility and potential to upload new software.

Landing Gear:

As part of the change to a compound wing structure, Airbus implemented a new design in the addition of the main landing gear in the production of Airbus A350. This new design resulted in the attachment of each major landing gear to rear wing spar forward and gear beam aft. The gear beam aft is in turn attached to the fuselage and wing. However, a double side-stay design was implemented in order to help lessen the loads added into the wing.

Furthermore, the production of a more efficient Airbus A350 airliner family has led to the invention of a three-pointed main landing gear configuration philosophy that incorporates four and six wheel bogies. The new design philosophy incorporates both the four and six wheel bogies for the purpose of ensuring that the landing gear can keep the roadway loading within limits. Notably, not all the three variants will have both the four and six wheel bogies in the landing gear structure because of need to save weight. Therefore, the four-wheel bogey is designed for the A250-800 and A350-900 variants with the six-wheel bogey designed for the A350-1000 variant.

Cost and Schedule:

As mentioned earlier, the production of Airbus A350 involved three variations namely A350-800, A350-900 and A350-1000. While the production of these three variants was launched in 2006, the costs and schedule of these three variations varies because of the slight differences in configurations. To understand the cost and schedule of Airbus A350 Aircraft, it's important to examine each of the variant separately as the development of the aircraft continues since its launch in 2006. Basically, all the production of the variants has adopted a common configuration but have slight differences which results in the difference in costs and schedule. The following description of each variant reveals the difference in cost and schedule:

A350-800:

Designed to directly substitute Airbus 330-200 and compete with Boeing 787, Airbus A350-800 has the capacity of carrying 270 passengers. In addition to having a range of 15,400 km, the aircraft is a three-class cabin nine-side by side layout that is scheduled to enter service in 2014. One of the slight differences in the design of A350-800 is that it's developed as a simple shrivel of the A350-900 variant. As compared to the A350-900 variant, the A350-800 variant is not an optimized variant but it includes some slight changes in system and structure. The production of this variant is expected to cost an approximate of U.S.$208.7 million.

A350-900:

As compared to the A350-800 model, the A350-900 is a more complex variant of the Airbus A350 with the capacity of carrying 314 passengers with a standard configuration range of 15,000 km. While the layout of the variant is similar to that of the A350-800 model, it will be the first variant of the Airbus A350 airliners to enter service as it is scheduled for a 2013 introduction. The model is designed as a replacement of the Airbus A340-300 and will cost approximately U.S.$240.6 million.

A350-1000:

This is the final variant of the Airbus A350 aircrafts that is scheduled for an introduction into service by the end of 2015. This is the biggest model of the Airbus A350 family with a capacity of seating 350 passengers with a similar layout like the other variants.

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Furthermore, this model has an 11-frame extension over the A350-900 model with a range of 14,800km and will incorporate a little larger wing than the other models. Being the largest model of the A350 family, the model is designed to be a replacement of the A40-600 and will cost approximately U.S.$269.6 million.

Consequently, it is approximated that the production of the Airbus A350 family will cost up to U.S.$15 billion (Hamilton, 2006). Additionally, the first model of the variants is scheduled for a 2013 entry into service with the final model scheduled for entry into service by the end of 2015.

Procurement Management:

With procurement management being the ability of a company to acquire relevant goods and/or services to be able to meet the quantity and quality needs, its one of the most important segments for Airbus in the production of Airbus A350 family of airliners. An effective procurement management enables Airbus to realize its goal in production of Airbus A350 while lessening the chances of fraud or collusion. Given that companies are usually involved in determining procurement processes for their businesses, there is a possibility of either direct or indirect procurement occurring in the business. These are the two distinct categories of procurement activities with direct procurement taking place in production settings only. On the other hand, indirect procurement occurs in non-production related settings.

For the production of A350 airliner family, Airbus has been involved in both direct and indirect procurement activities. The focus of its direct procurement activities i.e. supply chain management has a significant effect in the production process of the three A350 variants. This is because direct procurement includes items such as components, materials and parts of the aircraft. The focus of indirect procurement activities is working resources that promote the operations of the company. As part of its procurement management activities, Airbus has had to rely on the United States' suppliers of Boeing 787 with several contracts awarded to date. Furthermore, Airbus had received over 500 firm orders from 33 customers by August 2010.

In procurement management that mainly focuses on supply chain management, Airbus had awarded major contracts to the United States by the end of 2008. Apart contracts on engine and engine systems, Airbus directly awarded other contracts worth $30 billion to sub-contractors by the end of 2008. In the supply chain management, the company has awarded most of its contracts to the United States with the other contracts awarded to other companies and its partners. In fact, the United States companies have been awarded eleven out of the twenty-six major contracts. In the production of the Airbus A350 family, the major strategic partners in the hydraulic, fuel and avionics segments are U.S. companies.

Airbus decided to depend on strategic partners from the United States for the assimilation of most of the major systems. This decision was partly based on the fact that these U.S. companies have gained much experience while manufacturing the lighter and more effective systems for Boeing 787 aircraft. The other reason why Airbus chose various U.S. companies for the integration of the major systems is because of the unpredictability of the U.S. dollar in exchange to the Euro. In fact, the fluctuations exchange rate between the U.S. dollar and Euro has been a major problem for Airbus. Awarding major contracts to these companies has enabled Airbus to effectively evade its cost base on the production of Airbus A350 for the next two decades.

Examples of the companies awarded one of these contracts is Goodrich which has been chosen for the purpose of supplying carbon brakes. As the brake supplier, Goodrich is expected to supply carbon brakes that are made of heat sink material and were first used in the production of Boeing 787 aircraft. This procurement management decision has not only proved to be productive but also challenging for Airbus in the production of the Airbus A350 family. Furthermore, the value of the contracts awarded the U.S. companies are estimated to be more than $24 billion which basically represents 80% of all contracts. The breakdown and details of the major awarded contracts by Airbus as of February 2009 is listed in Table 1 below:

Table 1: Major Airbus A350 Contracts awarded by February 2009

Company

Country of Origin

Value

Cockpit Systems (including avionics

Rockwell….....

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