{"id":24370,"date":"2017-11-15T18:03:31","date_gmt":"2017-11-15T23:03:31","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/"},"modified":"2017-11-15T18:03:31","modified_gmt":"2017-11-15T23:03:31","slug":"airbus-digitization-on-the-fly","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/","title":{"rendered":"Airbus: Digitization on the fly"},"content":{"rendered":"

Airbus: A decade behind <\/strong><\/p>\n

If Airbus were to stop selling new aircraft today, it would still take the company an entire decade to fulfill its existing orders[1]<\/a>.<\/p>\n

The cause of this significant backlog is threefold. Firstly, demand for aircraft has surged due to increases in global passenger traffic \u2013 3.8 billion passengers used a plane in 2016, and this number is expected to double within the next 20 years[2]<\/a>. This growth means that Airbus and Boeing need to produce 30% more planes annually by 2020 to meet existing orders (see Figure 1).<\/p>\n

\"\"<\/a>
\nFigure 1:<\/u> Airbus and Boeing annual aircraft production (1990 \u2013 2020). Source: Wall Street Journal [3]<\/strong><\/a><\/em><\/p>\n

Secondly, aircraft production plants lack the automation and industrial maturity of motor vehicle manufacturers due to their limited involvement in mass production to date[4]<\/a>.<\/p>\n

Thirdly, aircraft producers rely on a complex global supply chain of tier 1-3 suppliers and sub-contractors for components (e.g. engine parts, seats, toilets) in which delays are highly common.<\/p>\n

With customer loyalty increasingly being based on on-time delivery[5]<\/a>, it is critical that Airbus ramp up production rapidly in the face of strong competition from Boeing and emerging aircraft producers from China, Russia and Canada.<\/p>\n

Digitization at Airbus<\/strong><\/p>\n

Resolving this production pressure requires more than just incremental improvements. Airbus needs to \u201cdisrupt its productivity\u201d by setting up a different mode of organization and employing new means of production[6]<\/a>. To this end, Airbus has kick-started a digital transformation that will impact the complete lifecycle of an aircraft (see Figure 2).<\/p>\n

\"\"<\/a><\/p>\n

Figure 2:<\/u> Selection of digital solutions and cross-functional technologies by stage of aircraft lifecycle. Source: AIAC\u00a0<\/em>[7]<\/a><\/p>\n

An initiative currently underway is BoostAerospace, a joint venture between Airbus, Dassault, Safran and Thales. It is a cloud-based digital platform (see Table 1) that provides a common collaboration tool for industry stakeholders who currently need to manage 5-6 different systems. Its AirSupply service in particular enables a much higher level of interaction between customers and suppliers, which leads to \u201cincreased responsiveness when collaborating over quantities and delivery time frames, fewer supply disruptions, reduced stock levels, fewer outstanding amounts, and improved reputations.\u201d Estimated benefits of current services include an average time-saving of 10% with regards to administrative activities, and supplier performance improvement of 5%.<\/p>\n

Table 1:<\/u> Cloud-based services provided on BoostAerospace platform.<\/em><\/p>\n

\"\"<\/a>In addition to continuing to develop its service offering, the focus for BoostAerospace over the next few years will be extending use of the portal to all levels of the supply chain in order to create a completely connected ecosystem. It aims to do this by using an adaptive pricing model and offering free limited access to very small suppliers[8]<\/a>.<\/p>\n

What does the next decade hold?<\/strong><\/p>\n

Over the next decade Airbus will continue to focus on building its digital supply chain, and complementing it with the development of a \u201cFactory of the Future\u201d that fully integrates Enterprise Resource Planning (ERP), manufacturing and engineering resource management, and factory floor systems[9]<\/a> using sensor-generated data. \u00a0The factory floor itself will be transformed through the \u201cuse of Augmented and Virtual Reality devices for employees to improve methods of working, use of Internet of Things for logistics equipment in Final Assembly Lines, and use of Cobots (collaborative robots) to increase the efficiency of workers with improved ergonomics[10]<\/a>\u201d (see Figure 3).<\/p>\n

\"\"<\/a><\/p>\n

Figure 3:<\/span> Cobots under development for use in Airbus assembly lines. Source: Deeside.com\u00a0[11]<\/a><\/em><\/p>\n

Is having the right technology all that’s required for success<\/strong>?<\/strong><\/p>\n

Success of digitization at Airbus rests on whether the company and its collaborators can make the radical shift to a completely digital mindset[12]<\/a>. This will require a comprehensive realignment of the company\u2019s internal organizational components \u2013 namely its operating model (structure and systems), people (skills and characteristics), culture (values and norms) and critical tasks \u2013 as well as securing cooperation across its entire supply chain. It is critical that management prioritize these efforts in conjunction with deploying the right technology to ensure long-term sustainability of its digital transformation[13]<\/a>.<\/p>\n

Can they do it?<\/strong><\/p>\n

Airbus is currently juggling multiple vital imperatives \u2013 reducing existing backlog, managing immediate-term financials, digitally transforming global operations, whilst simultaneously realigning its organization and supply chain. This is no mean feat. So the key question is: how should Airbus prioritize and allocate resources such that it ensures ongoing commercial viability whilst also completely revolutionizing its ways of working?<\/p>\n

[775 words]<\/p>\n

 <\/p>\n

\n

[1]<\/a> Adrian Bridgwater, \u201cAirbus: engineering the future of intelligent factories,\u201d Internet of Business <\/em>(blog), February 10, 2017, https:\/\/internetofbusiness.com\/airbus-engineering-intelligent-factories\/<\/a>, accessed November 2017<\/p>\n

[2]<\/a> Altran, \u201cIndustry 4.0: Why the aeronautical industry must reinvent itself?\u201d http:\/\/ignition.altran.com\/en\/article\/industry-4-0-why-the-aeronautical-industry-must-reinvent-itself\/<\/a>, accessed November 2017<\/p>\n

[3]<\/a> Robert Wall and Doug Cameron, \u201cWhere Are the Toilets? Order Glut Stretches Giant Jet Makers to Limit,\u201d Wall Street Journal<\/em>, February 23, 2017, https:\/\/www.wsj.com\/articles\/where-are-the-toilets-order-glut-stretches-giant-jet-makers-to-limit-1487885428<\/a>, accessed November 2017<\/p>\n

[4]<\/a> Altran, \u201cIndustry 4.0: Why the aeronautical industry must reinvent itself?\u201d<\/p>\n

[5]<\/a> Wall and Cameron, \u201cWhere Are the Toilets? Order Glut Stretches Giant Jet Makers to Limit\u201d<\/p>\n

[6]<\/a> Altran, \u201cIndustry 4.0: Why the aeronautical industry must reinvent itself?\u201d<\/p>\n

[7]<\/a> Thibault Dupont, \u201cDigitization and Industry 4.0 in Aerospace and Defense: Boosting the Transformation\u201d, AIAC<\/em>, May 10, 2017,\u00a0 http:\/\/aiac.ca\/blog_posts\/digitization-industry-4-0-aerospace-defense-boosting-transformation\/<\/a>, accessed November 2017<\/p>\n

[8]<\/a> Cornelia Staib, \u201cDigital transformation in the aerospace industry\u201d, SupplyOn Blog<\/em>, August 10, 2016, https:\/\/www.supplyon.com\/en\/blog\/digital-transformation-in-the-aerospace-industry\/<\/a>, accessed November 2017<\/p>\n

[9]<\/a> Bridgwater, \u201cAirbus: engineering the future of intelligent factories\u201d<\/p>\n

[10]<\/a> Airbus, 2016 Annual Report, http:\/\/company.airbus.com\/investors\/Annual-reports-and-registration-documents.html<\/a>, accessed November 2017<\/p>\n

[11]<\/a> Deeside.com, \u201cAirbus are working on humanoid \u2018Cobots\u2019 to work on assembly lines\u201d, May 12, 2016, http:\/\/www.deeside.com\/airbus-are-working-on-humanoid-cobots-to-work-on-assembly-lines\/<\/a>, accessed November 2017<\/p>\n

[12]<\/a> Dupont, \u201cDigitization and Industry 4.0 in Aerospace and Defense: Boosting the Transformation\u201d<\/p>\n

[13]<\/a> Dr. Reinhard Geissbauer, Jesper Vedso and Stefan Schrauf, \u201cIndustry 4.0: Building the digital enterprise\u201d, PWC (2016), https:\/\/www.pwc.com\/gx\/en\/industries\/industries-4.0\/landing-page\/industry-4.0-building-your-digital-enterprise-april-2016.pdf<\/a>, accessed November 2017<\/p>\n","protected":false},"excerpt":{"rendered":"

Airbus needs to achieve one of its steepest production increases since World War II to keep abreast with surging demand. Its answer: revolutionize the industry through digitization.<\/p>\n","protected":false},"author":9846,"featured_media":24377,"comment_status":"open","ping_status":"closed","template":"","categories":[285,3822,1900,3796,2029,628,3797,2308,3631],"class_list":["post-24370","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-aerospace","category-air-transport","category-airbus","category-boostaerospace","category-digitization","category-europe","category-factory-of-the-future","category-industry-40","category-supply-chain-40","hck-taxonomy-organization-airbus","hck-taxonomy-industry-air-transportation"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nAirbus: Digitization on the fly - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Airbus: Digitization on the fly - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Airbus needs to achieve one of its steepest production increases since World War II to keep abreast with surging demand. Its answer: revolutionize the industry through digitization.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/airbus.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1196\" \/>\n\t<meta property=\"og:image:height\" content=\"898\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/\",\"name\":\"Airbus: Digitization on the fly - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/airbus.jpg\",\"datePublished\":\"2017-11-15T23:03:31+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/airbus.jpg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/airbus.jpg\",\"width\":1196,\"height\":898},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/airbus-digitization-on-the-fly\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Airbus: Digitization on the fly\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Airbus: Digitization on the fly - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/","og_locale":"en_US","og_type":"article","og_title":"Airbus: Digitization on the fly - Technology and Operations Management","og_description":"Airbus needs to achieve one of its steepest production increases since World War II to keep abreast with surging demand. Its answer: revolutionize the industry through digitization.","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/","og_site_name":"Technology and Operations Management","og_image":[{"width":1196,"height":898,"url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/airbus.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/","name":"Airbus: Digitization on the fly - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/airbus.jpg","datePublished":"2017-11-15T23:03:31+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/airbus.jpg","contentUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/airbus.jpg","width":1196,"height":898},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbus-digitization-on-the-fly\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"Airbus: Digitization on the fly"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/24370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/9846"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=24370"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/24370\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media\/24377"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=24370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=24370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}