Aeronautics: Transformation Projects

Transformation projects in the aeronautics sector: critical for supporting sector growth
Case study
06/12/2015

Context and Challenges

Amid strong growth in the aeronautics sector, sustained by the replacement of the main airlines’ fleets and investment in the longhaul market, a Tier1 equipment manufacturer and leader in the construction of fuselage sections and doors needed to develop its Supply Chain to overcome sectoral challenges, such as large fluctuations in customer demand, long industrial cycles, significant quality demands and flows involving a large number of internal and external stakeholders.
The project was launched by the equipment manufacturer at a time when its order book was rapidly expanding but it was subject to uncertainties.

It presented various challenges:
• Fulfilling commitments made to customers and improving service by reducing missing production and nonquality to become a robust partner for aircraft manufacturers
• Ensuring the profitability of programs by reducing inventory and workin-progress
• Adapting Supply Chain processes, organization, and roles and responsibilities to new business line demands

Approach and methodology

Following an initial analysis phase, based on four major areas (anticipation and crossfunctional planning, managing developments and processing nonquality, shortterm planning and flow management, performance management and accountability) the following numerical targets were identified:
•Delivering 95% OnTime InFull (OTIF)
•Reducing inventory by 15 million euros
•Reducing costs by 5.6 million euros

To achieve the desired level of performance, the following initiatives were undertaken:

1. Sales and Operations Planning (S&OP) processes and inventory policy creation​
This process was tested in pilot mode for its approval and adjustment. The necessary indicators were also developed for managing the successful execution of processes. This process was implemented together with lower levels of planning in order to ensure overall consistency.
The group’s inventory policy was created during this phase, and backed by quantitative analyses.

2. Design and implementation of the Master Production Schedule (MPS) and operational management of production
The project challenges presented themselves in the management of the Upstream Supply Chain: the MPS must stabilize the demand for parts and ensure their availability.
The project team started by identifying flows and defining MPS items, then continued by building tools for load/capacity planning. A daytoday production management system was defined and implemented, integrating production commitment management.

3. Design of the target process for processing non-quality​
The main objective was to speed up the processing of nonquality to respond to sectoral demand.
So the project team started by conducting a quantitative and qualitative analysis of global flow processing cycles, from the detection of the anomaly to verification of completion of the approved corrective or preventative action. Multiprogram taskforces then identified any failures encountered in the existing flow and defined the related processing process.

4. Reduction of nonquality in two aircraft programs
The projects employed the 8D method to find the root causes of nonquality. Action was taken and implemented on two aircraft programs, ensuring ontheground coordination with operational teams, the recording of gains and regular reporting to the group’s management committee.

Results

The implementation of the MPS and the execution of a pilot project reduced manufacturing cycles by 60%, allowing a return to standard time (failing which, extra costs would have amounted to 20 million euros) and 95% fulfilment of manufacturing commitments across the cycle.