Gulfstream Aerospace

Gulfstream AerospaceProduction & Procurement

Review & Analysis

MSA 641 – Production & Procurement Management Final Presentation

December 2010

by Can Bayrak

Overview• Background & History• Product Line• Innovation • Product Support• Supplier Relations • Customer Relations• Production• Story of a GV• Conclusion• References

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Background• What does Gulfstream Aerospace do?

– Gulfstream Aerospace Corporation is a global manufacturer of business jet aircraft.

– “The Gulfstream product line offers an exceptional combination of price, performance, and value-added customer preferences in each segment of the mid-cabin to ultra-large-cabin business jet market.”

• Gulfstream employs more than 9700 people at seven major locations: Savannah, GA; Appleton, WI; Dallas, TX; Long Beach, CA; Brunswick, GA; London, UK; and Mexicali, Mexico.

• 34 governments operate Gulfstream jets and 22 countries, incl. the US, use Gulfstream aircraft to transport their head-of-state.

• Gulfstream aircraft have also been reconfigured and equipped to be involved in missions as diverse as maritime and aerial reconnaissance, medical evacuation, and pilot and astronaut training.

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History• 1958 - First appearance as the G-I (a turboprop driven)

series of Grumman Aircraft Engineering Co.

• 1966 – At the beginning of GII series production, military focused Grumman separated the business aircraft division and relocated in Savannah, GA.

• 1977 – The Gulfstream Line and the Savannah plant were sold to American Jet Industries, which was headed by an aviation entrepreneur Allen Paulson. Paulson renamed the company Gulfstream American.

• 1979 – GIII made its first flight. It also became the first business jet to fly over both poles.

• 1982 – The company renamed as Gulfstream Aerospace Corp.

• 1983 – The company went public by offering 8.8 Million shares of its stock.

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History• 1985 – Chrysler acquired Gulfstream Aerospace.

Gulfstream entered the Fortune 500 list from the 417th place.

• 1989 – Paulson and Forstmann Little & Co. teamed up and bought Gulfstream back from Chrysler for $825 Million.

• 1994 – Gulfstream signed its first 5-year contract with NetJets.

• 1997 – With the expansion of Savannah plant in ‘96, Gulfstream began manufacturing two different aircraft simultaneously, the GIV & GV.

• 1999 – General Dynamics acquired Gulfstream for $5 Billion.

• 2002 – Gulfstream renamed its products with Arabic numerals instead of Roman ones (i.e. GII to G200, GIV to G400).

• 2006 – Gulfstream started to replace its product line (i.e. G100 to G150, G400 to G450).

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Product Line• Mid-Size Class

– Longest range & fastest speed in its class.

• Powered by two Honeywell TFE731-40ARs

• Avionics by Rockwell Collins ProLine 21

• Being assembled by Israel Aerospace Industries (IAI) at Ben Gurion International – Maiden flight on May 3, 2005.

• Robb Report ‘s 2010 Best of the Best Winner in mid-size cabin

• Price: $15 Million

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Product Line• Available in 3 configurations (6 to 8 people):

– The Executive

– The Universal

– The Hallmark

• Acquisition includes:– 5-years Warranty

• Engines• Primary Structures• APU & Avionics

– Training– Maintenance

• Optional:– Enhanced Vision System TM

– Wide Area Augmentation System

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Product Line• Super Mid-Size Class

• Formerly known as IAI’s Galaxy line – Acquired by Gulfstream in 2001.

– Went under several improvements:• Sound-Proofing Package• Redesigned Interior• Weight Reduction (approx. 600 pounds)

• Powered by two Pratt & Whitney C306As

• Avionics by Rockwell Collins ProLine 4

• Being assembled by Israel Aerospace Industries (IAI) at Ben Gurion International.– Maiden flight December 25, 1993.

• Price: $ 23 Million

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– The Executive

– The Universal

– The Hallmark

• Acquisition includes:– 5-years Warranty

• Engines• Primary Structures• APU & Avionics

– Training– Maintenance

• Going to be replaced by G250 in 2011.

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Product Line

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• Super Mid-Size Class– Longest range & fastest speed in its class.

• 3 Test aircraft are assembled by Israel Aerospace Industries (IAI) at Ben Gurion International.

– Maiden flight December 11, 2009.

• Going to replace G200 series:– Increased cabin length – New engine– New T-tail– New glass cockpit– Heated leading edges– 3 or more windows– Increased range– Decreased runway requirements

• Powered by two Honeywell HTF7250G• Avionics by Rockwell Collins PlaneView250TM

• Price: $ 24 Million

Product Line

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• Available in 3 configurations (8 to 10 people):– The Executive

– The Universal

– The Hallmark


– HUD II (Heads up Display)– Synthetic Vision (SV-PFD) System

• Expected to be certified in 2011.

Product Line• Large Class

– Large Cabin, Mid-Range

• Powered by two Rolls Royce Tay Mk 611-8Cs

• Avionics by Honeywell PlaneView TM

• Being assembled at the Savannah, GA plant.– Replaced G300 series.

– Visually identical to G450, but range is shorter.

– Entered service in June 2005.




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– The Executive (Forward & Aft)– The Universal (Forward & Aft)– The Hallmark (Forward & Aft)

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Product Line• Super Large Class

– Large Cabin, Long-Range

• Powered by two Rolls Royce Tay Mk 611-8Cs


• Being assembled at the Savannah, GA plant.– Replaced G400 series.

– Visually identical to G350, but range is longer.

– Maiden flight on April 30th, 2003.

• Standardized Enhanced Vision System TM

• Optional:– HUD II (Heads up Display)– Synthetic Vision (SV-PFD) System


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• Robb Report ‘s 2010 Best of the Best Winner in large-size cabin

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Product Line• Super Large Class

– Large Cabin, Ultra Long-Range

• Powered by two Rolls Royce BR710 C4-11s


• Being assembled at the Savannah, GA plant.– Reduced range of G550.

– Visually identical to G550, but range is shorter.

– Maiden flight on November 28th, 1995.

• Optional:– Enhanced Vision System II TM


• Price: $42.5 Million

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Product Line• Longer Range Class

– Large Cabin, Ultra Long-Range

• Powered by two Rolls Royce BR710 C4-11s


• Being assembled at the Savannah, GA plant.– Increased range of G500.

– Visually identical to G550, but range is longer.


• Standardized HUD

• Optional:– Enhanced Vision System II TM

– Synthetic Vision (SV-PFD) System


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– The Executive (Forward & Aft)– The Universal (Forward & Aft)– The Hallmark (Forward & Aft)– Plus, cabin crew configurations

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Product Line• Longer Range Class

– Ultra Large Cabin, Ultra Long-Range

• Powered by two Rolls Royce BR725 A1-12s

• Avionics by Honeywell PlaneView II TM

• 5 Test aircraft were assembled at the Savannah, GA plant.– The fastest civilian aircraft ever built.


– Expected to be type certificated (TC) in 2011.

– Expected first delivery in 2012.

– will be completely fly-by-wire.

• Standardized:– Enhanced Vision System II TM



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– The Executive (Forward & Aft)– The Universal (Forward & Aft)– The Hallmark (Forward & Aft)– Plus, cabin crew configurations

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Innovation• Broad Band Multi Link (BBML)

– Delivers Internet access via a broad band data channel between the aircraft and the ground.

– Data speed is up to 3.5 Mbps– Offered for Large, Super Large, and Long-range Jets (G300 and

up)– Supplied by ARINC

• Enhanced Vision System (EVS) I & II– A nose-mounted FLIR (forward-looking infrared) camera to

generate actual, real-time images of the aircraft’s surroundings.– Designed by Elbit Systems of America – Commercial Aviation

Kollsman– EVS dramatically increases situational awareness at night

and during low-visibility daylight conditions by allowing pilots to see terrain, runways, taxiways and approaches that are undetectable by unaided sight.

– 460+ Gulfstream aircraft with EVS I– 30+ Gulfstream aircraft with EVS II

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Innovation• PlaneBook TM

– Electronic document manager that Gulfstream innovated.– %100 paperless solution to flight documentation.– Can be used as a tablet PC as well.

• Fujitsu hardware & Windows OS.

• PlaneConnect TM

– Transmits reports on your aircraft to experts on the ground all while you’re en route.

– Providing an automatic update of the condition of your aircraft during flight.

– Enables speedy resolution of any maintenance issues which may arise.

– The information identifies new trends with system reliability so that investigations can be ordered sooner and fleet corrective actions implemented faster.

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Innovation• Synthetic Vision – Primary Flight Display (SV-PFD)

– A large three-dimensional color image of terrain overlaid with the PFD instrument readings.

– Improved two dimensional blue over brown image– Developed with Honeywell– Includes both traditional and Head-Up Display (HUD)

symbology; such as attitude, altitude, airspeed, bank and steering cues, flight path marker, Terrain Awareness and Warning System (TAWS) alerts, and Traffic alert Collision Avoidance System (TCAS) all remain the same.

– Optional upgrade to current operators of PlaneView-equipped Gulfstream G550, G500, G450 and G350 business jet models.

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Innovation• PlaneView TM

– The most advanced integrated flight deck in existence - in display technology, avionics architecture, processing power and its exclusive Interactive Navigation (INAV) management system

– Honeywell Primus Epic Avionics Suite implemented– Includes the EVS & SV-PFD– The open architecture provides the capability to easily

integrate avionics functions that are not yet envisioned.– Optional Jeppesen FlightDeck® charts & maps.

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Product Support• The largest company-owned product-support

network in business aviation.

• Along with General Dynamics Aviation Services:– 11 company owned service centers worldwide– 14 authorized warranty and line service facilities– 3000+ professionals dedicated to product support program.

• A dedicated G100 to deliver flight-essential parts and a technician to Gulfstream aircraft under warranty at airports throughout North America, Central America and the Caribbean.

• 24 hr. technical support

• Gulfstream operators consistently rank Gulfstream Product Support Program #1 in the annual survey conducted by Professional Pilot magazine and in the AIN Product Support Survey.

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Product Support• $1 billion worth of inventory only in the US.• $600 million worth of inventory worldwide.• Gulfstream recently established a $40 million North

American parts facility in Memphis, TN to provide late-night and overnight-shipping service.

• International network of parts warehouses, distribution centers, and authorized warranty service facilities:– Hong Kong, China– Madrid, Spain– Singapore– London, UK– Basel, Switzerland– Sao Paulo, Brazil– Moscow, Russia

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– Sendai, Japan– Mumbai, India– Tel Aviv, Israel– Hannover, Germany– Dubai, U.A.E.– Johannesburg, South Africa– Sydney, Australia

Supplier Relations• Gulfstream Aerospace Supply Chain Management

portal– Contains all the guidelines and detailed information a supplier

will need to work with Gulfstream

– The portal creates a customer-focused, world-class strategic environment that produces expertise in the areas of strategic sourcing, materials management and supplier relationships.

– Contains Quality Assurance requirements that each supplier should meet.

– Enhances the suppliers to get in touch among each other, which improves communication quality.

• Annual Gulfstream ‘Supplier of the Year’ Awards– Enhances the supplier dedication, which improves the overall

quality and, thereby, increases the customer value of the aircraft.

– Categories of total value chain cost, quality, reliability, delivery, and product and aftermarket support.

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Supplier Relations• PPG Aerospace

– Supplies Gulfstream with high-solids topcoat, sealants, windshields, cockpit and passenger-cabin windows, and various light lenses

– Winner of 2008 & 2009 Supplier of the Year award

• VOLT Workforce Solutions– Volt supplies aerospace engineers, IT professionals and manufacturing

personnel to Gulfstream’s service centers.

– Winner of a 2009 Supplier of the Year award

• Aircell– World’s leading provider of in-flight connectivity

– Makes two new high-speed network services beneficial to Gulfstream customers at the factory: SwiftBroadband Solution (only for G150 andG200) & Gogo Biz™ Inflight Internet

• Goodyear– Supplies Gulfstream with its Flight Eagle® tires


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Supplier Relations• Deutsch

– Electrical connector supplier to Gulfstream Aerospace, operates a VMI (Vendor Managed Inventory) program within Gulfstream Aerospace which is responsible for the kitting and on JIT delivery of connectors to the manufacturing floor.


• L-3 Crestview (subsidiary of L-3 Communications)– One of the most biggest providers of aircraft modification,

fabrication and assembly in the world

– Uses lean manufacturing techniques and continuous improvement process to ensure its products and services result in enduring customer satisfaction.


• Coastal Logistics Group (CLG)– Offers Manufacturing & Distribution Support Services


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Customer Relations• The Gulfstream Outstanding Flight Award Program

– The program was launched in 2008.– Designed specifically to reward Gulfstream operators, both

commercial and governmental, who use their aircraft in the most outstanding and noteworthy manner each year.

– Amway Corp. and the U.S. Air Force’s 310th Airlift Squadron named as the 2009 winners

– Phoenix Air Group Inc. and the U.S. Navy’s Executive Transport Detachment Pacific named as the 2010 winners

– An excellent opportunity for Gulfstream to highlight not only the superior performance and safety of the operators, but also the outstanding performance and significant safety features of Gulfstream aircraft (Lombardo, 2008).

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Customer Relations• NetJets

– Gulfstream’s biggest affair– First 5-year contract in 1994.– Gulfstream dedicated a special group just to satisfy NetJets operators.– The NetJets Support Team dedicated to initiating and monitoring unscheduled

maintenance activities for the composite Gulfstream fleet of large- and mid-cabin aircraft.

– The specialists liaison directly with the operator and multiple maintenance providers to ensure adequate support wherever the aircraft may be located.

• U.S. Government– A dedicated group within Gulfstream headed by a Vice President– 2nd biggest customer after NetJets.– The Government Leased Five Gulfstream C-37A Aircraft In $477 Million

Lease And Maintenance Agreement for 10 years, started in 2001.– An additional C-37A was ordered by the Air Force in 2010.– The House Appropriations Committee added another $132 million dollars

to the bill in July 2009 for a total of 3 C-37A aircraft.– The FAA’s Gulfstream has the tail number # N1.

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Customer Relations• Apple Board Of Directors Rewarded CEO Steve Jobs

With Gulfstream V in 2000.• Gulfstream devoted special resources to assist

customers at the 2010 FIFA World Cup in South Africa.• National Air Services (NAS), the largest and fastest-growing

independent provider of private aviation and fractional share services in the Middle East , signed a multi-aircraft contract for three G450s with options for 17 more G450s which if exercised will make the total potential value of the contract in excess of US$650 million.

• Israeli Air Force agreement valued at some $174 million for three GVs, with an option for a second 10-year customer logistic support program valued at $32 million.

• $100 million contract by Japan Coast Guard for two GVs.

• Asia Jet, a Hong Kong-based private charter company, ordered a G150, a G200, and a G250.

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a Visual Supply Chain

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Production

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• Challenges:– Producing two or more different models at the same time.

– Lowering the costs while increasing the quality and safety of the product.

– Due to rapid changing market, adaptation should be as fast as possible.

– Performing more “final phase manufacturing” while utilizing less capacity.

• Constraints:– The “final phase manufacturing” capacity is limited.

– Each aircraft is different.• Different engineering configurations

• Personnel skills

• Inventory outfitting and manufacturing devices cost.

– The cycle time was over 30 weeks, not a competitive advantage at all.

– Aircraft is a difficult product to test, maintain, and service.

• So, how did Gulfstream Aerospace handle these challenges and overcome aircraft production issues?

Production

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• The Answer: “Reducing variability while keeping diversity high.”

– Concurrent manufacturing and the Rollback program triggered Lean Production and Continuous Improvement among assembly level activities.

– “Within the value-stream of manufacturing, you have the necessity, if not the obligation, of maximizing the distribution of resources and tasks (Lombardo, 2004).”

– 80% of the customers are looking for the same, standard configurations. • Reduction of cycle-times

• Standardized engineering methods (drawings, software, personnel skill, etc.)

• Standardized wiring, furniture, and cockpit solutions

– Standard requirements are, thereby, rolled back to initial phase manufacturing.

– 12-week outfitting cycle went down to four weeks.

– Gulfstream also value-stream maps its supplier activities and tries to find solutions to reduce costs.

• What else does Gulfstream do for quality improvement?

Production

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• The Answer: “Total Quality Management (TQM) is a must.”

– Since the number of industrial engineers are limited to identify every single waste, employees are empowered by suggesting ideas to the “parking lot” idea pool.

– The parking lot is the pool of ideas that every employee from every level might suggest anything to improve lean manufacturing process by eliminating waste.

– To avoid excessive debris, the ideas are filtered according to following criteria:

• The idea should support 5-year lean vision.

• There must be a positive business case for it.

• There must be sufficient resources and budget for the idea.

• Clear definition of objectives with responsibility and schedule.

– Every ‘suitable’ idea are analyzed regarding its cost vs. benefit ratio

• In essence, Gulfstream focuses on Lean and 6-Sigma concepts to eliminate waste while improving overall quality and decreasing costs.

• Continuous Improvement is one of the key components of the process.

Production

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• G450 & G550 Examples:

– Both aircraft has its final phase manufacturing at the Savannah plant.

– G45 & G550 are visually identical.

– Required pilot ratings are the same.

– They share most of the electrical infrastructure (cockpit displays, pressurization system, nose landing gear, oxygen & fire extinguishing systems, etc.)

– Since common systems require identical parts, the inventory variety is minimal.

– Reduction in various aspects:

• Skilled personnel• Testing• Maintenance costs• Support difficulty• Training costs• Overall Inventory

Production

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• Innovative G650– Parts count has been slashed by 50%,

compared to previous large cabin aircraft.

– The large aluminum components assemblies have precisely positioned with pre-drilled mounting holes for fasteners.

– Assembly time slashed because no custom fitting, machining or filing is needed to build

the primary airframe structure.– However, G650 is a clean sheet product line for Gulfstream. – There are various aspects that might increase cycle time:

• All fly-by-Wire aircraft• New certification• New pilot rating requirements• Additional test aircraft

– 200+ orders today, valuing approximately $13 Billion.

Production Rates

Source: GAMA

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2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

20

40

60

80

100

120

140

160

180

G100 G150 & G200 G200 G300 G350, G450, G500, G550 G500 & G550 Total per Year

Gulfstream Aeropace Business Jet Delivery Rates 2000 to 2009

Story of a GV

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• High-performance Instrumented Airborne Platform for Environmental Research (HIAPER)– An advanced airborne research platform built and modified to serve the National Science

Foundation's environmental research needs for the next several decades.

• One of the Special Missions of Gulfstream Aerospace

• In December 2001, Gulfstream was awarded the contract of manufacturing a special modified GV which will be used for testing scientific payloads at such high altitudes that will enable scientists to conduct important atmospheric studies in and near the Tropopause.

• Modifications were made by Gulfstream and Lockheed Martin at Savannah, GA plant & Greenville, SC center, respectively.

• While a regular GV costs approximately $56 million, the HIAPER GV cost around $80 million.

• Production of the basic green aircraft was completed in 2002.

• Lockheed Martin kept the aircraft for testing and modification until June 2004.

• The final product delivered to the University Corporation for Atmospheric Research in 2005.

Story of a GV

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Conclusion• Assemble-to-Order approach

– 80% of the orders are standard configurations.

– The interior and additional Cockpit solutions are implemented on demand.

– Initial manufacturing phases are not interrupted by any customization demand.

– The customization occurs is during final manufacturing phases.

• Various Lean Manufacturing and 6-Sigma approaches– Multiple Test aircraft, testing different systems concurrently.

– Multiple aircraft production simultaneously.

– Robust supplier & customer relations benefit both quality and inventory flow.

– Initial Manufacturing phases are done in several sites around the globe.

– Final Manufacturing phases are done in several sites around the globe as well (Savannah & Israel plants).

• Even though Gulfstream strives for reducing variability in product line, the company competes at several markets.– Mid, Large, and Ultra-Large cabin portfolio

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References• Anonymous. (2010, August 28). PPG Aerospace Earns Gulfstream 2009 Supplier of the Year Awards. Investment Weekly News.

• Anonymous. (2010, September 13). Volt Workforce Solutions Receives Gulfstream Supplier of the Year Award. Professional Services Close - Up. Jacksonville.

• Anselmo, J. C., Garvey, W. (2010, October 18). The Haves and Have Nots. Aviation Week & Space Technology, 52-62.

• Business Editors. (2003, October 30). API assists Gulfstream achieve number one product support rating. Business Wire.

• General Aviation Manufacturers Association. (2010). Shipment database statistics. Retrieved December/1, 2010, from http://www.gama.aero/media-center/industry-facts-and-statistics/shipment-database?page=compare&tab=company&type1=all&comp_id=207&year1=2000&year=2009&quarter=1&type=all&submit=Go

• George, F. (n.d.). G650 Assembly. Aviation Week. McGraw Hill.

• Gulfstream Aerospace. (2010). News home. Retrieved November/29, 2010, from http://www.gulfstream.com/news/

• Gulfstream Aerospace. (2010). Products enhancements home. Retrieved November/29, 2010, from http://www.gulfstream.com/product_enhancements/

• Gulfstream Aerospace. (2010). Products overview. Retrieved November/29, 2010, from http://www.gulfstream.com/products/

• Gulfstream Aerospace. (2010). Product support home. Retrieved November/29, 2010, from http://www.gulfstream.com/product_support/

• Gulfstream Aerospace. (2010). Sites home. Retrieved November/29, 2010, from http://www.gulfstream.com/sites/

• High-performance Instrumented Airborne Platform for Environmental Research (HIAPER). (2010). HIAPER project office. Retrieved November/29, 2010, from http://www.hiaper.ucar.edu/what_is_hiaper.html

• Lombardo, J. T. (2004, November). Concurrent manufacturing, re-engineering and variability control. Presented at the Fifty-Sixth Advanced Manufacturing Forum. The Pennsylvania State University, PA.

• National Business Aviation Association (NBAA). (2010). Member directory. Retrieved November/29, 2010, from https://data.nbaa.org/source/security/site-logon.cfm?section=unknown&activesection=home&a=1

• Peaford, A., Nichols, S., Thomas, G. (2011). 2011 Pocket Guide to Business Aircraft. Flightglobal

• Trimble, S., Hall, T. (2010, October 12). Diversity Rules. Flight International, 64-65.

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