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Airbus cuts costs by learning from auto industry

 
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PostPosted: Sun Jan 28, 2007 6:52 am    Post subject: Airbus cuts costs by learning from auto industry Reply with quote

By David Pearson
Of DOW JONES NEWSWIRES
Last Update: 2:51 PM ET Jan 26, 2007
source

HAMBURG (MarketWatch) -- Commercial aircraft builders are increasingly turning to manufacturing techniques learned from the automobile industry in a bid to make production more efficient and flexible.

For over a year, Airbus has been operating a moving production line inspired by production methods used by car makers such as Japan's Toyota Motor Corp. (TM) to complete sections for its family of single-aisle short to medium-haul aircraft.

The advantages for Airbus and its parent company, European Aeronautic Defence & Space Co NV (5730.FR), which has been handicapped by production ramp-up problems with the Airbus A380 superjumbo, are clear.

"The system allows us to reduce production costs and optimize our workflow, and requires less inventory," Hans-Henrich Altfeld, head of Airbus A320 family fuselage production center, told a group of journalists.

Airbus's arch-rival, Boeing Co (BA), adopted a moving production line system in 2002 for final assembly of its 737 single-aisle model, and last month it started final assembly of the wide-body 777.

Airbus's production line, by contrast, is involved at an earlier stage in the aircraft manufacturing process. Empty fuselage shells are installed with critical flight systems, such as flight-control, and passenger systems, such as electrical and electronics systems, hydraulics, air conditioning and water. The finished sections are then moved to a final assembly line where the nose, wings and tail sections are installed.

Altfeld said the new production technique has reduced the time necessary to manufacture a fuselage section by 40% to around five days, thanks to a system where the sections move sideways through the plant on rails at a speed of one meter an hour.

Eckart Frankenberger, who oversees Airbus's new factory projects, including a facility that is making sections for the new A380 superjumbo that will go into service for the first time in October, said the cost reduction compared to previous manufacturing techniques is about 30%.

The moving production line, which Airbus calls "lean manufacturing," breaks with previous civil aviation industry practice whereby aircraft were built in "docks." That had drawbacks, as teams often would get in each other's way if coordination was lax, resulting in significant delays.

Quality has improved, and there's now less waste, Airbus officials said, and the company now has much greater flexibility to adjust production to its order book.

That's highly important for the European company. With a bulging order book for the A320 and its versions that are highly prized by low-cost airlines, Airbus has decided to increase output of its A318m, A319m, A320 and A321 models gradually to 36 a month by the end of 2008 from 30 at the end of last year. Over 2,000 orders have been booked in the last two years, and a further ramp-up to around 40 a month is possible if orders keep pouring in.

The single-aisle plant at Hamburg, which also makes sub-assemblies for the A380, is already working flat out. The paint shop is working with four daily shifts, and assembly operations with two or three shifts.

Final assembly of the A318, A319 and A321 is at Hamburg, but that of the original A320 - its production numbers equal those of its three offshoots combined - takes place at Airbus's other assembly facility at Toulouse, in south-west France.

In a bid to rationalize production, Airbus's senior management is reportedly mulling plans to shift final assembly of the A320 to Hamburg, leaving Toulouse with final assembly of wide-bodied aircraft such as the A330, A340 and A380. The production site for the new wide-bodied A350 XWB will be decided in the coming weeks.

Airbus officials say privately that shifting the A320's final assembly to Toulouse makes sense, although it would require building another production line and other new investments.

A potentially more contentious issue, however, is that Airbus partner governments are keen to preserve the delicate balance of work-sharing between Germany and France, and building the A350 in Toulouse would tilt the balance in France's favor.

By late 2008 or early 2009 - and that's a short time in an industry that has long lead times from a decision to launch a new aircraft project and first deliveries - Airbus will be actively considering a successor to the A320 family that has served it so well since deliveries started in 1988.
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