Airbus Spares Support and Services

Airbus Spares Support and Services

James Rutledge Director Spares Operations

Airbus Spares Support and Services

Market MarketSituation Situation

Spares Planning for maintenance

© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

How Howmuch muchis isenough? enough?

Conclusion: Conclusion:Spares SparesSupply SupplyLogistics Logistics Home 2

DLGR Airbus Feb Service 2003Value East - Welcome Airbus Service Value Meeting Meeting - Middle Middle East

Page 2

CustomerServices Services Customer

Airbus today

Shareholders

Broughton

Hamburg Stade

Filton

Bremen


80%

20%

3


St Nazaire

Nantes

Munich

Madrid Toulouse

Page 3




AGENDA AGENDA



Conclusion: Conclusion:Spares SparesSupply SupplyLogistics Logistics Home 4


Page 4


New Airbus organisation Create an integrated, highly competitive company AM Airbus

DASA Airbus

BAeS Airbus

CASA Airbus

EADS

BAE

Shareholders Ownership

Airbus Industrie GIE

Customer Customer

Suppliers


AM Airbus

DASA Airbus

BAeS Airbus

CASA Airbus

Airbus Airbus

Customer Customer

1 Company 1 Accountability 1 Management

Yesterday

Now

l 4 national managements l National companies optimising their performance

l One management line l One company with one target to enhance the performance of Airbus l Clear accountabilities

Deliver faster and better solutions to the Customer 5


Page 5


Airbus worldwide AIRBUS INDUSTRIE FRANCE

GREAT BRITAIN

SPAIN

A330

A340 -500

A340

A340 -600

GERMANY

A330 -200

A321

A310


A300 AIR FRANCE

69 6

70

LUFTHANSA AIR INTER AIR FRANCE UTA A320 SABENA NORTHWEST

71

72

SWISSAIR LUFTHANSA

73

74

75

76

77

78

ALITALIA AIR INTER LUFTHANSA ILFC

AIR FRANCE BRITISH CAL. ADRIA AIR INTER CYPRUS

79

80

81


82

83

84

85

86

Years

AIR CANADA EGYPTAIR EMIRATES LUFTHANSA FLIGHTLEASE A319 VIRGIN ATLANTIC SINGAPORE AIRLINES

87

88 90 89

91

92

ILFC KOREAN AIR EMIRATES AUSTRIAN SABENA SWISSAIR ILFC 93

94 96 98 95

Page 6

97



Customer Services management structure

7


Page 7


Airbus Customer Services

Mission


“To ensure safety of operations. To maintain high level of customer satisfaction.”

To be the undisputed Number 1 in Customer Services 8


Page 8


Airbus Customer Services

Operational objectives • Support customised to customer requirements • Materiel and engineering support available on a 24-hour basis

• A wide range of services to help ensure © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

that the customer's fleet is flying on schedule

Our customers get the best operational results from their fleet 9


Page 9



Airbus worldwide

• 4 400 aircraft ordered • 2 700 in service • 188 customers / 178 operators 10 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 10


Airbus AirbusProduct ProductLine Line


12 2,800 303

models delivered 2002 production

11 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

4,400 aircraft sold to 188 customers Page 11



An Airbus aircraft takes off . . . .

1/2 . . . . every 5 12 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

seconds Page 12


Air travel will continue to grow strongly World annual traffic - trillion RPK 9 8

370 billion RPK

2018-2019 annual increment > total traffic at 747 EIS

7

(4.6% p.a.)

6 (5.2% p.a.)

5 ICAO traffic history

4

(4.5% p.a.)


3

1

Airbus projection + 4.88 % per annum

(6.9% p.a.)

2 (11.2% p.a.)

0 1969

350 billion RPK 1979


1989

- Welcome

1999

2009

Page 13

2019


20-year forecast (2000-2019) - World

15,403 new passenger and cargo aircraft valued at

$1.3 trillion © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

768 new passenger and cargo aircraft per year

Valued at

$65 billion 14 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 14


New aircraft deliveries Number of aircraft

7 570

8 000 7 000 6 000 5 000 4 000

3 046

3 000

2 118


2 000 1 000

1 235 692

315

0 70 & 85

100 - 175


- Welcome

210 & 250

300, 350 & 400

> 400

Page 15

Freighter > 80t


Mission and Role

Delivering aircraft value l Safety l Spares to assure operational reliability


l Operating costs reduction To contribute to the sale of more Airbus Aircraft


- Welcome

Page 16


Optimizing utilization, reliability & costs Indirect Operating Cost (IOC) Ticketing, sales & promotion

Passenger services

Direct Operating Cost (DOC) Airframe consumed spares

Labour

Flight crew Operational fees

Engine Station & ground expenses

consumed

Insurance

spares Engine


spares General & administrative

Spares holding and handling Spares administration

Fuel

inventory Aircraft depreciation & Finance

Airframe spares inventory

8 - 9 % of OC is influenced by materiel


- Welcome

Page 17


Materiel Supply and Services Q Airbus Materiel Support’s operation ð Assuring supply and availability of Airbus spares world-wide 120,000 different part numbers on stock

1,5 million part numbers in database

ð Order desk services for all maintenance needs 24 hours around the clock 192,000 customer orders

US$ 327 million turnover


ð Full spare parts data and provisioning support 101 days of consultancy and provisioning conference

2800 spares investment forecast studies

ð Consultancy and On-site spares assistance To operate as a service centre in providing materiel and related services for the Airbus fleet world-wide. 18 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 18


Materiel Supply and Services


Q Materiel supply

GSE and Tools

Supply management of Standard hardware and Raw bulk materiel. 19 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 19


Materiel Management Seminar Entry Into Service Case Study

Calculation of Calculation of Estimated Estimated Demand Demand E E -Expendables [SPC Expendables [SPC 1] 1]

Flighthours per year Flighthours per year Quantity per a/c


Fleetsize

E= Step 11

FH ⋅ n ⋅ N  LT + AT  ⋅  MTBUR  365 

Step Step 2

Calculation of estimated demand “E”

1.0 1.1 0

1.2

1.3

... ... ... ...

1

... ... ... ...

2

... ... ... ...

n

Since 2001

n

70 customer participants to date

n

Classroom style and case study

n

Best industry practice

n

AIRBUS benchmark

n

Customer training for key airline staff

n

Helping customers to improve cost effective materiel management in daily business

n

Learning about cost implications of materiel management

Step 3 Gauss/ Poisson Tables

Rec. Qty

Mean Time Between Unscheduled Removals Removals

Leadtime ++ Admin’time Admin’time

Expendables Expendables[SPC [SPC1] 1] Gauss Gauss Rotables [SPC Rotables [SPC 2] 2]

Recommended Qty Recommended Poisson

Repairables [SPC Repairables 6] [SPC 6] USD

Total Cost Ownership Cost

Shortage Cost

Spares Investment


- Welcome

Page 20


Consultancy Services Supply Chain Consultancy Order Process

• Elements


Planning Process

Transport Process

• Analysis Process mapping

Identification of stress areas


- Welcome

Prioritize ideas for improvement

Recommend possible solutions

Page 21

FINAL REPORT


Airbus Transport Logistics Guide

n n n n


n

Investigation in Transport Logistics General Conditions on Transport General Routing Instruction Airbus Materiel Support Transport Logistics.


- Welcome

Page 22




AGENDA AGENDA



Spares SparesSupply SupplyLogistics LogisticsManagement Management Home 23 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 23


Mathematical Model

Step 1

Step 2

Calculation of estimated demand “E”

1.0 1.1 1.2 1.3 0

... ... ... ...

1

... ... ... ...

2

... ... ... ...

Step 3

Gauss/ Poisson Tables

Rec. Qty

Expendables [SPC 1] Gauss


Rotables [SPC 2]

Recommended Qty Poisson

Repairables [SPC 6]


- Welcome

Page 24


Mathematical Model - Step 2

Calculation of Recommended Quantity m

Gauss factor

E > 10


Estimated demand

E < 10 Protection Level Poisson distribution


- Welcome

Page 25



Calculation of Estimated Demand E Repairables [SPC 6]

Flighthours per year Quantity per a/c


Fleetsize

Mean Time between Unscheduled Removals

Scrap Rate

Leadtime + Admin’time

Turnaroundtime = MSPT+TT


- Welcome

Page 26


Mathematical Model - Appendix III

Q Example for the calculation of recommended quantities using the Poisson distribution for E < 10 Poisson Distribution Table Estimated Demand [E] m

Estimated Demand E = 1,1


Protection Level PL = 95%

The Protection Level value of the calculated Estimated Demand is between PL [ m=2 ] = 0.900 and PL [ m=3 ] = 0.974

1.0

1.1

1.2

1.3

1.4

9.0

1.6

1.7

1.8

1.9

2.0

0

.368

.333

.301

.273

.247

.223

.202

.183

.165

.150

.135

1

.736

.699

.663

.627

.592

.558

.525

.493

.463

.434

.406

2

.920

.900

.879

.857

.833

.809

.783

.757

.731

.704

.677

3

.981

.974

.966

.957

.946

.934

.921

.907

.891

.875

.857

4

.996

.996

.992

.989

.986

.981

.976

.970

.964

.956

.947

5

.999

.999

.998

.998

.997

.996

.994

.992

.990

.987

.983

1.000 1.000 1.000 1.000

.999

.999

.999

.998

.997

.997

.995

1.000 1.000 1.000 1.000

.999

.999

.999

6 7 8

1.000 1.000 1.000

Recommended Quantity [m]

Protection Level [PL]

Since PL = 95% is above PL [ m=2 ] = 90%, the result is ==> Recommended Quantity m = 3 BACK 27 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 27



Divided in material categories: • Line Replaceable Units (LRUs)


• Line Maintenance Parts (LMPs) • Airbus Proprietary Parts • Standard Hardware / Cockpit Push Buttons • Tools and Ground Support Equipment


- Welcome

Page 28


Consumption Report Data Analysis 100

number of checks that used x parts 90

80

70

60

50


40

30

20

10

parts used per check 0 0

100

200

300

400

500

600

700


800

900

- Welcome

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

2000

Page 29

2100

2200

2300

2400

2500


Consumption Report Data Analysis 100

number of checks that used x parts 14 90

12 Average 236 Std Deviation 335

80

10 70

8 lower C-Checks Average 212 Std Deviation 117

60

6 50

higher C Checks Average 622 Std Deviation 218

4 40


2 30

0 0

100

200

300

400

500

600

700

800

900

1000

1100

1200

20

10

parts used per check

0 0

100

200

300

400

500

600

700


800

900

- Welcome

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

2000

Page 30

2100

2200

2300

2400

2500




AGENDA AGENDA

Spares Planning for effective maintenance


Spares SparesSupply SupplyLogistics Logistics

Home 31 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East

- Welcome

Page 31


Logistics Challenges Ÿ Complexity of operational “Model” Ÿ High variance in quality of operational and strategic management in spares area Ÿ Spares planning, movement, and organisation Ÿ Supplier management skills: procurement, monitoring / reporting, remedial actions Ÿ QC and safety factors: spares attributes, data, control


Ÿ Regional and cultural factors Ÿ Conflict between spares availability and operating costs targets Ÿ Balance of power within airline: Operations - Engineering - Materiel – Finance Ÿ Financial and economic conditions.


- Welcome

Page 32


Logistics Challenges Ÿ Inherent lack of forecasting data and technical predictability: Expendable parts Ÿ Very low repeat usage of parts between checks Ÿ Little or no shared consumption data Ÿ Few reliable benchmarks Ÿ Technical or Design Factors Ÿ Component reliability and mod status © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Ÿ System redundancies and MEL Ÿ On-condition maintenance Ÿ Maintenance cycles and maintainability


- Welcome

Page 33


What exactly do you get from spares ? 100 99 98 97

OR OR+NS OR+NS+NM

96 95 94 93

No v

Oc t

Se p

Au g

Ju l

Ju n

Ma y

Ap r

De c'9 6 Ja n'9 7


90

Ma r

91

OR: Technical ground/air interruptions due to A/C basic malfuntion NS: Technical ground/air interruptions due to lacl of spares NM: Technical ground/air interrruptions due to maintenance

Fe b

92

- Logbook defect list leads to passenger/pilot dissatisfaction - Delay in maintenance due to missing parts leads to excess labour cost


- Welcome

Page 34


35 DLGR Airbus Feb Service 2003Value East Airbus Service Value Meeting Meeting - Middle Middle East - Welcome Page 35

10 - 20 A/C

> 20 A/C

> 20 A/C

< 5 A/C

< 5 A/C

10 - 20 A/C

99

98.5

98

0

Operational Reliability (%)

< 5 A/C

10 - 20 A/C

5

airline 16

airline 15

airline 14

airline 13

airline 12

airline 11

airline 10

< 5 A/C

< 5 A/C

5 - 10 A/C

6

airline 9

airline 8

10 - 20 A/C

4

airline 7

airline 6

airline 5

> 20 A/C

1

airline 4

< 5 A/C

3

airline 3

5 - 10 A/C

> 10 A/C

2

airline 2

airline 1

Spares Investment per A/C ($ millions)


A319/320/321 Spares Investment and OR More spares => higher operational reliability? 100

99.5

97.5

97 $ million

reliability (%)


Optimizing utilization, reliability & costs Breakdown of Indirect Operating Costs

Spares holding and handling


Spares administration

Clustered Shopping Internet / Spec ordering


- Welcome

Page 36


Strategic Procurement

Clustered Shopping High

Standard Hardware

Supply Supplyfrom frommarket market&&Honeywell Honeywell

Consumable Materiel Proprietary Parts, Tools & Mod. kits

Order Volume

Supplied Suppliedby byInterturbine Interturbine Logistics Logistics Customized Customized Lead LeadTime Time

Minor Vendors


Integrated Integrated Purchasing Purchasing

low Major Vendors

low


Materiel $ Value

- Welcome

GCP2000 GCP2000 Contracts Contracts with withguarantees guarantees

high

Page 37


Customized Lead Time Objective • Improve supply chain efficiency for Airbus proprietary parts stocks through just-in-time lead time è Less wastage through better shared planning è No additional cost


è Reduce

Hamburg

Frankfurt

Washington

Beijing

Singapore

Customer holds less stock


- Welcome

Regional stores hold required parts

Page 38


Customized Lead Time

C LT

Customized Lead Time Service - Advantages Order administration costs


100

100 36

80

95

74

60

[Cost % ]

[Customer Purchase Order % ]

Order administration costs

90

85

40 64

80

20 26

75

0 Non CLT customer Priority

RTN


CLT Customer

- Welcome

Cost

Page 39


C LT

Customized Lead Time Customized Lead Time - current customers Order administration costs


Philippine Airlines


- Welcome

Page 40


Optimizing utilization, reliability & costs

Breakdown of Indirect Operating Costs

Spares holding and handling


Spares administration

Clustered Shopping Internet / Spec ordering


- Welcome

Page 41


Materiel Supply and Services QElectronic ordering by Spec 2000 250,000 Number of orders placed


Non Spec 2000 200,000

192 000

By Spec 2000

37%

150,000

100,000 71 342 59 026

50,000

14%

49 091 57%

51% 49%

43%

0 AOG

WSP

19 613 25%

63%

30%of customer

86%

75%

USR

RTN

Total

Order category


- Welcome

Page 42


Airbus Spares Portal http://spares.airbus.com