Management of Airbus Company - Assignment Example

?INTRODUCTION Airbus is a subsidiary company of EADS, a Europe based aerospace company. Airbus deals into the manufacturing of aircrafts and is basedin Blagnac, France. The company has been involved in various activities across the European continent and is the largest producer of jet airliners in the world. The company initially started as a consortium of small companies engaged into aircraft manufacture business. In 2001, this group was set up as a simplified joint stock company, which was owned 80% by the EADS and the remaining 20% by BAE systems. Later in October 2006, BAE sold its shares to EADS. The company employs more than 52,000 employees based in four countries at sixteen different sites. The four countries in which the 16 sites are set up are Germany, France, the United Kingdom and Spain. The final assembly of the aircraft is done in Toulouse (France). Also, the company has its subsidiaries in the United States, Japan, China and India. The company has built the world first commercially viable fly-by-wire airliner, the Airbus A320, and also the largest airliner, the A380. The Airbus A380 is a four engine double deck airplane is a double-deck, and is the largest airplane in the world. It took its first flight on 27 April 2005 from Toulouse, and the first commercial flight was operated on 25 October 2007 from Singapore to Sydney in alliance with the Singapore Airlines Corporation. The airplane design offers cabin size of 50% more than the Boeing 747 which is the second largest airplane in the world and provides for a seating space of 850 people as compared to only 525 in the Boeing 727. Airbus 380 is available in both the passenger and freight models and is the first airplane to use the GTL-based fuel technology. This paper, divided into four section, will make a detailed study about the operations management of Airbus 380, use of Information technology, and soft system methodology to enhance the business and management operations of Airbus. SECTION 1 This section will study the role of operations management, the reasons behind its initiation at the company, and its effect on the business objectives. This section provides the detailed analysis of operations management at Airbus, and how it has been implemented with the help of various OM techniques to increase efficiency. The previous operations at Airbus were not in line with the new requirements of Airbus A380. The new system required higher efficiencies, with precision, and reliability of speedy data and decision making. The old manufacturing facilities were not able to support the requirements of a new and more complex engineering product. It was important that the management makes significant changes in the operational process and data handling system to improve efficiencies. Also the supply chain of the company was in dire need of modifications and up gradations to carry out all the requirements for the manufacture of airbus A380. The engineers were not able to identify the cause of frequent disruptions that usually occurred in the system, which resulted in fault decision making at most of the times. In order to cure the system of these problems, it was evident that operational management would be employed in the form of various techniques that would assist in managing the overall business in a more profitable manner. The company management decided to implement two operations management techniques in its manufacturing floors – Enterprise resource planning and SCOR. Airbus introduced a new oracle based ERP system which also consisted of integrated accounting and costing along with the regular purchase and inventory management, production planning, and logistics management systems. The implementation of the ERP made it mandatory that the system is centralized in nature required and the production chain assumes a “Pull type” formation instead of the existing “Push type” configuration, ( Chekland, 1981). With these two reforms in place, it became easier to share the data easily within the various manufacturing centers of Airbus and easy sharing of resources and information significantly brought down the work load on each departments. This new ERP system offered many advantages to the Airbus management – decreased the amount of huge procurement of resources, high inventories which were responsible for the increase in cost, WIP, and the quality of products. Also, the ERP system, offered new computerized technology for daily costing calculation, as per requirements and subsequently evaluate the daily and monthly performance as per the targets set by the management. This new ERP system was able to successfully integrate most of the business fronts into one system. Procurement, manufacturing, performance checks, order management, costing, and distribution were the major areas covered by this one system that allowed for excellent visibility and transparency, (Scheer, et. al, 2003). The implementation of this system has definitely established a series of wise changes to the entire business process of Airbus. Regarding SCOR implementation, the management understood that in order to achieve an efficient business process, it was evident that real time information about the manufacturing line is available with them so that they can act in the same time frame. The importance of accurate data and its real time sharing between various departments. For this purpose, a process reference model – SCOR was implemented – a customary analytical tool for the entire supply-chain management purposes, right from the procurement to the delivery processes, (SCOR, 2001). With a hierarchical structure, SCOR is able to easily inter relate a number of operational and organizational processes that are significant to the business performance and also supply optimal solutions in case of any problems arising. The process reference model is utilized in the form of a prototype or support configuration for the blueprint of processes that are a part of the entire supply chain of a business. With this exceptional structure and formation, it was easier for the management to unite the organizational activities and management targets. SCOR is basically a SCM management tool that is able to identify and interrelate all business activities that are coupled as per the business targets, (Kilger, 2004). SCOR can easily use a set of both complex and easy solutions and a number of sectors have already been using SCOR for development and expansion of their business processes. SCOR implementation consists of four levels - Level 1 – this level identified the existing capacity of the airbus operations chain, and the scope and elements of SCOR that can be applied to enhance the current performance level at airbus. For this purpose, five management purposes were used - plan, source, make, deliver, and return, which in turn set the scope and capacities of all other processes in the chain. Level 2 –This level is concerned with the flow of resources at ever point within the operational chain. Level 3 – this level concerns the inputs versus the outputs, performance metrics, optimum methods, infrastructure and other facilities to reach efficient targets. Level 4 – this level is concerned with the feedbacks and improvement and control activities. By deploying suitable operational methods and techniques, the airbus management was able to improve its production capacities and cost efficiencies by suitable margins. SECTION 2 This section will offer some recommendation s in the field of Information technology and operations management to assist the airbus management increase their support systems and business efficiency. Also this will focus on adding more capabilities to the aircraft operations team and manage systems more efficiently than ever. These recommendations to enhance the business operations of airbus are a set of information technology systems, modern applications, and other forms of data management systems that intend to support the various complex processes involved in the aircraft operations, like ground planning and scheduling, flight control processes and facilities, and engineering. 1. Air Information Data and Inertial Reference Systems - (ADIRS) - these IT based systems especially designed for airplane use, offer efficient, fast and reliable air data. These light weight data management systems provide the navigational data to help in enhanced airport route tracking and landing. This helps in time savings and cost reductions. Various data inputs like speed of air, angle of air attack and speed, the position and attitude data to the airplane pilots and crew members. The ADIRS works as a single, error tolerant navigational information system for the pilots. This system has already been implemented by the competitor of airbus – Boeing 747. Increased track efficient will be one of the basic advantages to airbus by using the ADIRS. 2. Maintenance performance system – this IT based performance support system helps the pilots and the operators to regularly update the fleet information with the help of intelligent documentation systems. This system will allow the airbus to easily stream line the aircraft information with other departments also. Just in time training can also be offered by this system which is of great assistance in trouble hooting, repair management, and training issues. With the help of maintenance performance system, airbus can efficiently, securely and accurately store data and maintain its transfer management as well. 3. Airplane Health management – airbus can also utilize an online decision support system will assist in faster and reliable online decision making and time monitoring by the operators and the pilots. In case of faults, the system is capable of providing the operators and the pilots with a list of causes and solutions, (Amalberti, 1993). Also this will help to reduce the delay in maintenance activities as it will allow the maintenance crew members to be ready in case of errors or system faults as soon as the aircraft lands, (Amalberti, 1993). This will significantly reduce the costs, and other operational delays that are currently being faced by the airbus. 4. Electronic Flight bag – this is a general purpose aircraft communication system which can be integrated on the deck board, to calculate performances, chart calculations and their display, improve the position information by adding more data, offer high quality video entry surveillance, and faster access to electronic documents between the pilots and operators. This will help to reduce the time taken for intercommunication and collaboration, (Amalberti, 1993). 5. Electronic log book system – this IT based operational system will assist the airbus operators and pilots to merge their infrastructure ant any point of time and interconnect the ground and air data work in coordination while generating important pilot reports. This system will further assist the operations to effectively schedule the aircraft operations by generating faster reports and identifying the faulty data more often, V. This will help to reduce operations costs. 6. Aircraft Environment Surveillance System - this system aims to upgrade the increase the safety of the aircraft by enhancing the awareness towards weather issues and concerns. This system monitors the weather radar and detects the storms and proposes rerouting to the pilots as well for safer operations. 7. Use of RFID technology – this recommendation will focus upon the operations chain of airbus manufacture chain rather than airbus aircraft operations. Use of RFID in various points within the supply, logistics and operational chain within the manufacturing operations of airbus will help to reduce the minimize the unplanned activities, better manage the inventories, ensure resource availability to engineers, locate and maintain a record of data and resources for faster turnaround of work, and also improve the safety of various parts operations which will in turn increase the transparency within the supply chains and operations, reduce costs and improve the visibility as well. RFID cane be used to track the supplies and also the transport of containers to track faster response service and reduce delays. 8. Production management software – among the various manufacturing operations soft wares available, production management software is expected to change the present situation at airbus manufacturing site. This software will gather and manage real time data about the jobs, labor, resources, machine, and logistics. Also the performance integrated analysis system with this software will offer display metrics for various line operations and also record the performance levels, which will help in analysis of quality standards by comparing two data sets. Also, human machine interface software will help machine operators and engineers to control and administer the processes with the help of a computer-based interface. SECTION 3 Soft systems methodology is designed ti solve issues and problems that exist within a company’s management. It is basically a 7 step process or a defined methodology on how to deal with problems. SSM is based upon the system engineering approach, and breaks down the problem by identifying the central significance of perspective, (Checkland, & Poulter, 2006). The seven stage approach of SSM is as follows – 1. Identification of the problem 2. Research work on the problem 3. Choosing the correct perspectives and setting up the root definitions 4. Building a conceptual model based on the perspective 5. Comparing this model with the real life scenario 6. Stating the changes that are required in the real life system by comparing the two 7. Executing the changes by adopting a new methodology / software or a systems approach In the case of Airbus, it was found out that reporting activities and processes between the managers and employees were not efficient and SSM was selected to solve this issue. Airbus management saw some potential in improving this business process in order to enhance their operational efficiencies. This section study in brief as to how the reporting in Airbus was enhanced by using the SSM methodology. SSM initially studies the existing pattern of reporting in the company. It was noticed that the executive making the report used different patterns, representations and calculations and the person reading / assessing / evaluating the report used different measures. After this, a detailed research is done on the reporting problem. With no specific method of reporting, no particular templates method used, lot of time consumption in making and analyzing the reports, number of reports were being drafted for one single purpose and a variety of report presentation formats, were the main concerns. Subsequently, a ‘CATWOE’ analysis is carried out which identified the employees who were affected by the change brought about in the reporting process, the executives who will performed the change, the advantages that could be realized by brining the change like quick, efficient and secure reporting and decreased costs and the management who will actually control this whole transformation process and the various limitations that limit the change – employee resistance to change or lack of infrastructure or other facilities, (Chekland, 2000). All the employees and the participants of the new change are then required to submit their thoughts and sample systems which encompass their feedbacks. After studying the concerns, limitations and advantages of implementing a new system for report management, SSM recommends a new software for report management. The SSM recommended a report management software – REVEAL that allowed the management to cut back on the time and resource consuming printed paper reports. This software is able to capture data from various systems that run simultaneously in the airbus operational chain, then speedily catalog and index the data and distribute it through a secured network. It also allows its users to download or fax any reports on demand. Easy click and point operations allow the users to edit and format reports and eliminates the need of generating paper reports, which in turn saves a lot of time and cost (Chekland, 2000) As a result of this software for report management systems in airbus, the productivity has been boosted by significant levels, assisting employees to make faster and well informed work related decisions. SECTION 4 ?Airbus management has made several attempts to employee management in the past. Recently, the company has launched a flexi advantage scheme for its employees where in the performance levels of all the employees from now on will be monitored and they will be given incentives and promotions based on their performance. This attempt by the company management is to increase the competitiveness nature of the employees and take on responsibility on their own. Also, the management made provisions for training of staff and employees who were interested and showed caliber and capability to take on more responsibility and roles in the company. Also the management introduced a new scheme which included free medical incentives and insurance benefits for those who outperformed. However, the management was intelligent enough to run a feedback from the employees before they implemented a benefit scheme, in which most of the employees favored the medical benefits scheme. These actions taken by the management for the benefit of the employees reduced the bridge between the management and the employees. Among other initiatives, the company has also instructed every employee to chart out a self development and work progress plan and assess how the employee and the business can benefit from the plan. Further, the management has executed several leadership courses which are mandatory for the crew members and the managers to attend. These courses aim to deliver the knowledge and usefulness of leadership capabilities, (Farley, 2005). With the regular up gradations in the technology within the aviation sector, it is important that the company is in sync with the recent developments and modern technologies and implements the same in its services. In view of this, the company has devoted an entire department for research and technology development purposes and also provides regular training of its employees so that they are capable of using the new systems and technology. The organizational activities of Airbus have been well knitted around concepts of global responsibility. The company management in its policies has laid stress upon the issues of Socially Responsible Procurement which can be understood as the use of resources or the buying capacity to create social value for the people. The company management also gives importance to the modernization of social values, human rights, diversity, equal opportunity and environmental issues. REFERENCES Checkland, P & Poulter, J (2006) Learning for action: a short definitive account of soft systems methodology Chichester, John Wiley Checkland, Peter B. (2000). Soft Systems Methodology: A thirty year retrospective. Systems Research and Behavioral Science, 17, 11–58 Amalberti, R. (1993), Safety in Flight Operations, in Reliability and Safety in Hazardous Work System, Wilpert B. & Quale T. (Eds), pp171-194, 1993 Farley, C. 2005. HR's role in talent management and driving business results. EmploymentRelations Today, 32(1): 55-6 Checkland, P (1981) Systems thinking, systems practice London, John Wiley [SCOR 2001] “Supply Chain Operations Reference Model Overview”, version 5.0, www.supply-chain.org, Supply-Chain Council, Inc., 303 Freeport Road, Pittsburgh, PA 15215. Scheer A. W. , P. Abolhassan, and W. J. M. Kirchmer, (2003) Business Process Excellence – ARIS in practice. (Springer, 2003). ISBN 3 540 43479 8 H. Stadtler and C. Kilger: Supply Chain Management and Advanced Planning: Concepts, Models, Software and Case Studies, Indiana University Press, 2004, p. 25. Read More