Airbus Procurement Olivier CAUQUIL Head of Material & Parts Procurement Chairman of the AIRBUS GROUP Material Board ITA Europe 2015 Keynote Speaker
Aerospace Market Performance Titanium Market Outlook Airbus Material & Parts Strategy Way forward
Aerospace Market
Aircraft Market Overview Air Travel Overview The steady air traffic growth will increase the demand for new aircrafts Source: Global Market Forecast 2014-2033
Aircraft Market Overview Forecasted Demand for Passenger Aircraft The increased demand for aircrafts will require more sourcing opportunities Source: Global Market Forecast 2014-2033
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
The A320 Family is the world s best selling aircraft A320 - Superior comfort, lowest cost and highest reliability A320neo - 20% lower fuel burn 11,688 Orders 6,544 Deliveries 313 Operators Data to end April 2015
The most modern, efficient & comprehensive range of widebody aircraft available today A330 - The world s most popular mid-size aircraft A330neo - 14% lower fuel burn, more seats, more range 1,502 Orders 1,183 In service 102 Operators Data to end April 2015
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 Data to end April 2015
A380 a solution to increased demand for air transport A380 - Most profitable, most comfortable way to transport more people A take-off or landing every 4 minutes 310+ Orders 150+ Deliveries 18 Customers Data to end April 2015
Performance
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 1 st flight of A320neo Launch of the A330neo 1 st A350 XWB delivered on time to Qatar Airways on 22 nd December Continuous Growth of Production Volume with New Aircrafts involving more and more Titanium
Airbus Performance Backlog up to 30 th April 2015 Commercial Aircraft 1,350 3,794 174 145 6,399 Total order backlog 778 158 The high volume of order backlog ensures long-term sourcing demand. Approx 6,400 @ end of March 9 to 10 years at full production! Sources: Airbus Orders & Deliveries (to end April 2015)
Titanium Market Outlook
Globalization Airbus - Procurement Material & Parts Procurement Characteristics ILLUSTRATIVE global Composites Titanium Chemicals Aluminium Standard Parts regional Forgings & Castings Metallic Detail Parts Size indicates Volume : With local Titanium impact low medium high Supply base consolidation A very diverse footprint
AIRBUS Metallic commodity Titanium, Forgings & Castings Every working day, Airbus products manufacturing requires around 30 tons of Titanium (2014 consumption) Spend evolution 2013 => 2020(*) Forging: +50% Casting: +10% Titanium: +180% Forgings Casting Titanium New aircraft models require more Titanium: The input weight of Titanium is 18 times higher on A350 XWB than on A330 2013 2020 All incremental development (NEO s) to support optimisation of Aircraft performance involves new Pylon, where Titanium is key Supplier locations FRANCE GERMANY KAZAKHSTAN RUSSIA UNITED KINGDOM Composite is a new major player in Aircraft manufacturing, Titanium demand is linked Titanium is key for Airbus UNITED STATES JAPAN CHINA AUSTRIA (*)estimation
Airbus Material & Parts Strategy
Material and Parts Strategy is articulated around 5 Strategic Objectives Competitiveness 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 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
Optimize Buy to Fly Ration to improve Total Cost of Ownership Billet Plates Forging Casting Nesting Machining Reduce Non Value Added at the interfaces Reduce scrap and optimize scrap value when it can not be avoided Enlarge scope of work only when bringing real benefits We need to engineer Cost out of the Supply chain. All proposals will be considered
Buy to fly evolution Impact on Buy to Fly reduction Step 3 ALM Step 2 Smart Welding Step 1 Forming Extrusions Nesting Innovative 3D-printing technology is beginning to shape the future of aircraft component manufacturing. Maturity Increase maturity of Buy to Fly optimization techniques. Create more opportunities.
Material and Parts Strategy is articulated around 5 Strategic Objectives 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 We are reaching record high production volumes, we need to de-risk our supply chain.
Material and Parts Strategy is articulated around 5 Strategic Objectives Propose an efficient and consistent global footprint Billet Plates Forging Casting Machining Standard Parts Special Processes Assembly Meet market access requirements Develop local for local supply chain Develop Best Cost Sourcing approach Pre-requisite : $ spend (natural hedging) We are developing Regional / Continental supply chains, which will serve the needs of both Airbus and our Suppliers
Material and Parts Strategy is articulated around 5 Strategic Objectives 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 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?
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 Airbus 20% Airbus BUs + Enabled suppliers 80% 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
Way Forward
Titanium strategy Way forward Prepare the future Boost competitiveness Innovation and new technologies Technological trade-offs Deliver on commitments 5.845 Investigate all opportunities to improve the Total Cost of Ownership of flying parts To push the most competitive solutions forward Supplier development 4.480 Stable and robust supply Airbus Confidential
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?
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. Airbus - Procurement