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ITA Europe 2015 Keynote Speaker
Airbus Procurement Olivier CAUQUIL
Head of Material & Parts Procurement
Chairman of the AIRBUS GROUP Material Board
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Way forward
Aerospace Market
Titanium Market Outlook
Performance
Airbus Material & Parts Strategy
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Aerospace Market
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Aircraft Market Overview Air Travel Overview
The steady air traffic growth will increase the demand for new aircrafts
Source: Global Market Forecast 2014-2033
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Aircraft Market Overview Forecasted Demand for Passenger Aircraft
The increased demand for aircrafts will require more sourcing opportunities
Source: Global Market Forecast 2014-2033
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
May 2015 Airbus - Procurement
Meet the Airbus family from 100 to 500+ seats
The Airbus Family
A320 Family A330 Family A350 XWB A380
The market leader The right aircraft, right now The Xtra that makes a difference Own the sky
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
The A320 Family is the world’s best selling aircraft
Data to end April 2015
11,688 Orders
6,544 Deliveries
313 Operators
A320
- Superior comfort, lowest
cost and highest reliability
A320neo - 20% lower fuel
burn
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
The most modern, efficient & comprehensive range of widebody aircraft available today
1,502 Orders
1,183 In service
102 Operators
A330
- The world’s most
popular mid-size
aircraft
A330neo - 14% lower
fuel burn, more seats,
more range
May 2015 Airbus - Procurement
Data to end April 2015
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
A350 XWB – the Xtra that makes a difference
780 Orders
40 Customers
25% Lower operating cost
A350 Xtra Widebody
- Xtra space for unrivalled
passenger comfort
Xtra innovative
technologies for
optimised airline efficiency
May 2015 Airbus - Procurement
Data to end April 2015
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
A380 – a solution to increased demand for air transport
310+ Orders
150+ Deliveries Customers
18
A380
- Most profitable, most
comfortable way to transport
more people
A take-off or landing every
4 minutes
May 2015 Airbus - Procurement
Data to end April 2015
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Performance
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus Performance – 2014 Key achievements
629 Aircrafts delivered
1456 net orders (Airbus’ second best year)
Last two years: ~3000 net orders: Airbus’ best and second best years
Book to bill > 2
1st flight of A320neo
Launch of the A330neo
1st A350 XWB delivered on time to Qatar Airways on 22nd December
May 2015 Airbus - Procurement
Continuous Growth of Production Volume
with New Aircrafts involving more and more Titanium
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus Performance Backlog up to 30th April 2015 – Commercial Aircraft
The high volume of order backlog ensures long-term sourcing demand.
Approx 6,400 @ end of March
9 to 10 years at full production !
1,350
3,794
174
778
158
6,399 Total order backlog 145
Sources: Airbus Orders & Deliveries
(to end April 2015)
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Titanium Market Outlook
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
ILLUSTRATIVE Material & Parts Procurement Characteristics
A very diverse footprint
Glo
balizati
on
global
regional
local
Supply base consolidation low medium high
Standard Parts
Chemicals
Composites
Forgings
&
Castings
Titanium
Aluminium
Metallic Detail Parts Size indicates Volume
: With
Titanium impact
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
AIRBUS Metallic commodity
Every working day, Airbus products manufacturing requires
around 30 tons of Titanium (2014 consumption)
Titanium, Forgings & Castings
Supplier
locations
UNITED KINGDOM FRANCE GERMANY
UNITED STATES
RUSSIA KAZAKHSTAN
New aircraft models require more Titanium:
The input weight of Titanium is 18 times higher on
A350 XWB than on A330
2013 2020
Forgings
Casting
Titanium
Spend evolution 2013 => 2020(*)
Forging: +50%
Casting: +10%
Titanium: +180%
All incremental development (NEO’s) to support
optimisation of Aircraft performance involves
new Pylon, where Titanium is key
Composite is a new major player in Aircraft
manufacturing, Titanium demand is linked
Titanium is key for Airbus
May 2015 Airbus - Procurement
JAPAN CHINA AUSTRIA
(*)estimation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus
Material & Parts Strategy
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Material and Parts Strategy is articulated around 5 Strategic Objectives
Up to 90% of the material we purchase is going into scrap or swarf.
Optimizing the Buy to Fly ratio is of essence,
All proposals are analysed
Double Sourcing when relevant
− De-risking supply chain in the perspective of significant production rates
Optimisation of material use (Buy to Fly ratio)
Vertical Integration
Optimize value chain, look for the optimum solution
Recycling
Competitiveness
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Optimize Buy to Fly Ration to improve Total Cost of Ownership
We need to engineer Cost out of the Supply chain.
All proposals will be considered
Enlarge scope of work only when bringing real benefits
Reduce Non Value Added
at the interfaces
Billet
Plates
Casting
Machining Nesting
Forging
May 2015 Airbus - Procurement
Reduce scrap and optimize scrap value when it can not be avoided
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Buy to fly evolution
Impact on Buy to
Fly reduction
Maturity
Extrusions
Smart Welding
ALM
Nesting
Increase maturity of Buy to Fly optimization techniques.
Create more opportunities.
Forming
Step 1
Step 2
Step 3
May 2015 Airbus - Procurement
Innovative 3D-printing
technology is beginning to
shape the future of aircraft
component manufacturing.
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Material and Parts Strategy is articulated around 5 Strategic Objectives
We are reaching record high production volumes,
we need to de-risk our supply chain.
Ensure Supply Chain derisking
and ability to meet ramp-up
Manage and develop Supply base to set solid foundations towards
− Improvement of quality and On time delivery performance to automotive standards
Focus on Development jointly with suppliers to reach full robustness on demand
management & production system
Favour horizontal collaboration within Supply Chain to simplify Material and Parts flows
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Material and Parts Strategy is articulated around 5 Strategic Objectives
We are developing Regional / Continental supply chains,
which will serve the needs of both Airbus and our Suppliers’
Propose an efficient and
consistent global footprint
Meet market access requirements
Develop local for local supply chain
Develop Best Cost Sourcing approach
Pre-requisite : $ spend (natural hedging)
Billet
Plates Forging
Casting Machining Assembly
Standard
Parts Special
Processes
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Material and Parts Strategy is articulated around 5 Strategic Objectives
A pioneering spirit that puts innovation at the heart of everything we do
Does the Titanium supply Chain uses all the levers vs other technologies?
Foster innovation on current
and future programmes
Joint Innovation Initiatives with supplier, leveraging Airbus incremental
innovation policy
Identify and prepare for future technological paradigm shifts
Preserve standardization and multiple sources to secure supply chain
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Material and Parts Strategy is articulated around 5 Strategic Objectives
Develop synergies within Airbus
Group and Extended Enterprise
Less than 20% of the Airbus Group Material demand is directly ordered by Airbus
Identify and implement synergies with Airbus Group BUs through Procurement
Synergy Group
Enhance consolidated Material management with Extended Enterprise
Enablement of material and standard parts
IT tools to manage end to end material use within the whole supply chain
Airbus Group uses Procurement levers for its wide supply chain
May 2015 Airbus - Procurement
Airbus
20% Airbus BUs + Enabled suppliers
80%
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Way Forward
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Titanium strategy Way forward
Airbus Confidential
4.480
5.845
Stable and robust supply
Deliver on
commitments
Boost
competitiveness
Investigate all opportunities to
improve the Total Cost of
Ownership of flying parts
Prepare the
future
Innovation and new technologies
Technological trade-offs
To push the most competitive
solutions forward
Supplier development
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Material Innovation to cover the Global supply Chain Demand
Focus on reduction of Buy to Fly ratio including Vertical Integration, Nesting & Recycling
How can you support Airbus’ Titanium value chain and support Titanium growth ?
Are you ready to support Airbus in the ramp up ?
May 2015 Airbus - Procurement
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
© AIRBUS (Airbus S.A.S., Airbus Operations S.A.S., Airbus Operations GmbH, Airbus Operations LDT, Airbus Opeartions SL, Airbus China LTD, Airbus (Tianjin) Final Assembly Company LTD, Airbus (Tianjin) Delivery Centre LTD). All rights reserved. Confidential and proprietary
document. This document and all information contained herein is the sole property of AIRBUS. 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 S.A.S. 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 S.A.S. 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.
May 2015 Airbus - Procurement