MANAGING SUPPLIER RELATIONSHIPS

AIRBUS

PJ TWEEDALE

0929683

AIRBUSAN EADS COMPANY

AIRBUSAN EADS COMPANY

• World leading aircraft manufacturer• Based in Europe• Build aircraft from 107 to 525 seats• €28.8 Billion Turnover 2010• Global supply chain with interests in USA, EU,

Asia, etc.• Main competitor Boeing (market duopoly)• 6988 Aircraft in Operation

THE SUPPLY CHAIN

• Network of over 1500 contractors in 30 countries

• Every supplier contributes to manufacturing and technological development

– Promotes trust and sense of unity across supply chain

– Fosters stronger relationships between firms

– Whole supply chain advances simultaneously

KRALJIC’S SUPPLY POSITIONING MATRIX

EXAMPLES OF MAIN SUPPLIERS

PARTNERSHIP WITH SUPPLIERS

“Airbus is committed to outsourcing larger work packages to suitable long-term partners and trusted Tier One suppliers”

“Airbus’ policy is to involve partners and suppliers at the earliest possible joint development stage to foster a

collaborative relationship”

”This allows for enhanced lean design and manufacturing for Airbus, along with increased industrial flexibility.”

“Airbus identifies areas where improvements can be made in the supply chain and implements action plans to achieve those improvements by actively collaborating with our suppliers.”

PROCUREMENT DEPT.

• Procurement split into 6 ‘commodities’ departments

• Each department responsible for own suppliers• Focussed relationship between suppliers and

procurement staff• More face to face contact time• Risk that one supplier could deal with multiple

departments– May “confuse” relationship– Depends how supplier treats each department

SUPPLIER SELECTION

• New suppliers are always encouraged to join and “work with us to achieve even more success”

• SME’s are directed to establish contact through 1st and 2nd tier suppliers– Allows Airbus to focus on 1st and 2nd tier partnerships– Possibly narrows focus too much – could encourage

stronger relationships early on for future benefit

CONCLUSIONSAre partnerships common in this industry?

Yes, it would not be able to function without them

Do participants in the supply chain trust each other?

Yes, through their collaborative partnerships and joint development projects they develop trust in each other

Are relationships likely to change in the next 5 years?

No, most relationships are open long term commitments and are unlikely to change

How can relationships be improved?• More collaboration and technological development outside of aircraft

development projects• Involve 3rd Tier suppliers and beyond more

REFERENCES1. Airbus (2012) Company, Available from: http://www.airbus.com/company/

2. Amadeus (2012) AIRBUS, Available from: https://amadeus.bvdinfo.com/version-2012119/Report.serv?_CID=341&context=G79Y4ZRQIZP0Q5S

3. Boeing Co. (2012) Investor Relations, Available from: http://www.boeing.com/companyoffices/financial/quarterly.htm

4. Giannakis, M. & Chicksand, D. (2010) IB3840 Supply Chain Management Course Material

5. Sharpe, D. (2012) Supply Chain Management: Relationships, Available: http://www2.warwick.ac.uk/fac/sci/eng/eso/modules/year4/es4c9/resources/lecture_resources/lec11/

6. Airbus (2012) Airbus for Suppliers, Available: http://www.airbus.com/tools/airbusfor/suppliers/?contentId=%5B_TABLE%3Att_content%3B_FIELD%3Auid%5D%2C&cHash=22935adfac92fcbbd4ba4e1441d13383b

7. Airbus (2012) Supplier Support Management, Available: http://www.airbus.com/support/material-logistics/suppliers/?contentId=%5B_TABLE%3Att_content%3B_FIELD%3Auid%5D%2C&cHash=22935adfac92fcbbd4ba4e1441d13383

8. Airbus (2012) Procurement Organisation and Major Suppliers, Available: http://www.airbus.com/fileadmin/media_gallery/files/supply___world/Procurement-Organisation-Major-Suppliers_261110.pdf

9. Airbus (2012) Supply Chain, Available: http://www.airbus.com/innovation/eco-efficiency/supply-chain/?contentId=%5B_TABLE%3Att_content%3B_FIELD%3Auid%5D%2C&cHash=22935adfac92fcbbd4ba4e1441d13383

THANK YOU FOR LISTENINGAny Questions?

“Collaborating with the entire supply chain is key to ensuring reliability at each subcomponent level, and delivering products

on time and within budget that satisfy the highest environmental and quality standards. ”