Boeing Vs Airbus: A Comparison Of The Aircraft Giants

Boeing Overview

Question:

Discuss about the Operation Management: Boeing vs. Airbus.

Boeing

The Boeing is one of the largest multinational corporations that help in designing, manufacturing, and selling airplanes, rockets and satellites. The organization is also providing product services facility to its customers. The company is the largest producer of aircrafts globally. Based on the revenue collected in the year 2013, it is known as the world’s second largest defence contractor and one of the largest exporters in the country United States. Dow Jones Industrial Average is one of the components for the stock of Boeing.

The headquarters of Boeing is located in Chicago and the organization is led by the CEO Dennis Muilenburg and by the president. The five primary divisions of Boeings in which it is divided include: Boeing Capital, Boeing Shared Services Group and Boeing Commercial Airplanes. In the year 2015 the organization recorded sales of $96.11 billion and the company ranked 27^th on a well-known magazine “Fortune Magazine”.

Boeing 787 Dreamliner

“The Boeing 787 Dreamliner” is a long-range American jet airliner. The jet airliner is a long range and has wide size body. It provides seating facilities for “242 to 335” number travelers in a usual three seating configuration. It is one of the best fuel-efficient airliners and it is also known as pioneer airliner as it uses composite material as the primary material in order to construct the airframe. The 787 was implemented with the characteristic that it is more fuel-efficient than boring that was planned to change. “The 787 dreamliner” differentiates among the swept wingtips, electrical flight systems and noise-reducing chevrons. It shares different type of rating with the help of the larger Boeing 777. This is done in order to allow qualified pilots in order to operate both models.

Airbus

“Airbus is one of the sections of the international “Airbus Group SE” which manufactures civil aircraft. It is situated in France and Blagnac a “commune of Toulouse” . It provides facility of manufacture and production in “France, Spain, Germany, China, United Kingdom and the United States”. The organization provides employment to “73,958”.

The company started as a group Producers of Airbus Industry. In the year 1999 and 2000, a consolidation is made between the aerospace companies and European defence. The consolidation between the two allows implementation of Joint Stock Company in the year 2001. “Aeronautic Defence and Space Company and BAE Systems owned the company. After a extended sales process, BAE sold its shares to EADS on 13 October 2006.

Airbus provides employment to 73,000 people at different sixteen sites in countries like France, Spain, Germany,  and the United Kingdom.  Production of final assembly depends on Toulouse, Germany, France; Hamburg, Seville and Spain since the year 2009 as a joint between countries like Tianjin and China. Subsidiaries of Airbus in the countries United States, Japan and India are situated.

The organization manufactures and sells the first commercially feasible digital fly-by-wire airliner, the Airbus A320, and the world’s largest passenger airliner, the A380.” Airbus 380

The airbus “A380” is a jet airplane that is manufactured by one of the “European Union Manufacturer Airbus”. The Airbus A380 is the world’s largest passenger airliner. The airport has upgraded its facilities where the airbus operates. The facilities have been upgraded in order provide accommodation to the airbus. It was recently named as “Airbus A3XX”. The airbus was mainly designed for challenging the monopoly in the aircraft market. The first flight made by A30 was n 27 April in the year, 2005.

Boeing 787 Dreamliner

The upper deck of the A380 lengthens along the length of the fuselage. The width is very much comparable to the body of the aircraft. This provides 550 square meters of utilizable floor. The space is 40% much than the leading airliner. The Boeing 747-8 gives facility for seating which is more than 500 people in a three-class arrangement. The design range includes 8500 nautical miles. It serves as the longest nonstop scheduled flight.

On May 2016, the company received many firm orders. The organization delivered 190 aircrafts. The biggest customer of A30 was Emirates with 142 orders and 80 deliveries.

Operations Management of Boeing and Airbus; Failure of Boeing 787 Dreamliner

Boeing is one of the oldest aircraft manufacturing companies that is still providing a large number of aircrafts to airlines companies all over the world. Boeing mainly emphasizes on the customer satisfaction and comfort during the flight. After losing out majority of market share to Airbus, they brought in several changes in the overall aircraft designs (Bazargan et al. 2013). During this period, they did not back out from business or reduce costs of the aircrafts. Instead, they brought in the new changes. In addition to these, they also provided aircrafts to aerospace (spacecrafts), army and other defensive fields. Operations management of Boeing is divided in parts in order to reach goal specially for making their aircrafts. It is included on the major commercial aircraft for getting the right product mix, for implementing and formulating the right production system and market strategies  (Wu 2016).

Operation Management of Airbus

Operation Management of Airbus is quite different from Boeing. Before starting business, Airbus conducted rigorous research to effectively incorporate latest scientific and engineering techniques within the aircraft models and adding emphasize to customer demands as well as business needs. They built their aircraft models with a customer friendly design, high efficiency engines, low production cost and finally high cost efficiency ratio. Moreover, they built aircrafts with maximum capacity of passengers among the other contemporary aircrafts (Ashwini et al. 2013). Their main target was enhancing business by keeping or improving quality of services. Following this policy, they gained much popularity in the 90s and eventually surpassed Boeing in terms of business and market share. Most of the major airlines all over the world opted Airbus over Boeing due to cost efficiency, better service and high passenger capacity. Airbus’s operations management and marketing policy was an immediate success.

Difference in OM Aspects of Boeing and Airbus

There are many differences between Boeing and Airbus with respect to the operations management aspect. Boeing emphasized on immediate customer satisfaction while Airbus emphasized on long term upgrades (De Neufville et al. 2013). Boeing upgraded the internal designs and restructured the overall aircrafts while failed to make technical upgrades of the aircrafts. As a result, the cost efficiency reduced harshly and customers started preferring other companies like Airbus, Lockheed Martin, etc (Bazargan 2016). On the other hand, Airbus focused on three aspects: Satisfy present customers, added future planning, upgrade the whole aircraft system, both internal and technical, and provide the best cost efficient aircraft with maximum passenger capacity. Due to the massive differences, Airbus easily got much ahead of Boeing in Aircraft business.

Airbus Overview

Failure of Boeing 787 Dreamliner

Boeing, after losing majority of its market share to its main competitor Airbus, took some steps in order to gain back the market share and compete with Airbus. Boeing had the option of reducing the costs of the planes in order to satisfy the existing customers. Instead, they focused on the bringing a complete revamp in their models. For this, they changed the basic design of the model emphasizing more on the passenger satisfaction and comfort (Hill and Hill 2012). They also started using other materials for building the body of the aircrafts. However, the problem lies in the fact they focused on their existing customers only and had no particular future vision. Moreover, use of composite materials increased efficiency and costs of running the aircrafts but caused many other technical problems and glitches that threatened to stop the services of the aircrafts (Anderson et al. 2015). This is precisely the reason, Boeing 787 Dreamliner Project failed to achieve the expected goal.

Boeing’s operations plan have a large number of flaws that must be addressed immediately in order to revive their business and gain back the market share they once used to enjoy. Their main issues related to operations plan are as follows:

Poor Future Planning – Boeing only emphasizes on the current satisfaction of the customers. They revamped the whole interiors and the basic design of the aircrafts for enhancing passenger experience (Christopher 2016). But these changes only solved the issues temporarily; they failed to bring changes as long term solutions.

Futile Technical Upgrades – Boeing brought upgrades to satisfy customers. However, their technical upgrades were futile. In the process of lowering production costs, they used ineffective materials that further reduced cost efficiency of the aircrafts (Ashford et al. 2013). For instance, the battery they used got overheated during flight and stopped working in some cases, leading to many serious and fatal accidents. The bodies of the aircrafts were also not strong enough to survive a major crash.

Useless Marketing Policy – Boeing’s marketing policy more or less got vague in the last few decades. Although they provide crafts to major fronts like aerospace, military, their business has decreased considerably over time (Francis 2016). On the other hand, Airbus surpassed them and managed to gain a huge share on the aircraft market.

These are the main operational factors for which Boeing suffered a major setback in the aircraft market. These factors must be addressed in order to gain back the market share once enjoyed by the company.

In 2003, Boeing concentrated on making extra accommodation for its customers (aircrafts) and their voyagers by working up an inventive plane: the 787 Dreamliner. Regardless, Boeing’s worth construction framework for the pioneers was to develop their travel skill by redesigning the plane and by offering important redesigns in solace (Schofield 2016). Case in point, concerning different bearers, more than half of the fundamental formation of the 787 transportation (numbering the fuselage and wing) would be implemented by the use of composite materials. Right when segregated from the standard material (aluminium) utilized as a touch of plane gathering, the composite material considers stretched out stickiness and weight to be kept up in the voyager lodge, offering liberal change to the flying establishment (Kleinaltenkamp et al. 2014). Correspondingly, the lightweight composite materials attract the Dreamliner to make entire course of move flights. Along these lines, the Dreamliner grants aircrafts to offer direct/non-stop flights between any pair of urban ranges immediately, which is favoured by most broad wayfarers. Secondly, Boeing’s worth formation process for its key brief clients (the flying machines) and its end clients (the explorers) was to promote flight functioning adequacy by giving gigantic plane extents to sensible size planes while flying at generally the equal rate (Mach 0.85) (Liu et al. 2012). This profit would allow planes to offer calm non-stop flights to and from powerfully and littler urban zones. Likewise, a farthest point some spot around 210 and 330 explorers and a level of up to “8,500” marine miles, the 787 Dreamliner has  proposed to use 20% a smaller amount of fuel for unclear duty than today’s reasonably measured planes. The cost per-seat is dependent on to be 10 percent lesser than what is charged by the other transporter. In addition, not at all like the standard aluminium, fuselages, which tend to exhaust and rust the 787’s fuselages, depend upon composite materials, which is the reduction planes’ sponsorship and substitution costs.

Airbus A380

Other than deals, share markets reacted strongly at the time when Boeing dispatched its “redirection changing” “787 Dreamliner program” in the year 2003. Some spot around  the year 2003 and 2007, Boeing’s stock cost stretched out from around “$30” an offer to scarcely over $100 an offer (Evans 2015). In any case, Boeing reported a development of deferrals starting in late 2007 and the business part has responded oppositely. The negative business division reaction is really expected as reputation of Boeing’s era framework issues have wound up being coherently clear. Airbus shared a comparative destiny subsequent to reporting a development of deferrals for the vehicle of its A380 in mid 2006 (Sun et al. 2015). Notwithstanding monstrous capital speculation and association exertion, Boeing is right now confronting consistent yields (for two years) in its schedule for the woman flight and plane development to clients as of this creation. After many endeavours to recoup its “787’s composite fuselage supplier” back on track Boeing finally obtained “Vought’s South Carolina” office to a burden of $1 billion on July 8, 2009 (Freiherr 2015). This event affected us to look at the focal purposes behind Boeing’s inconveniences in dealing with its 787’s vehicle course of action.

The Boeing 787 Dreamliner Project should have the following targets of operations in the basic schedule. These are as follows:

Increased Outsourcing – By outsourcing around 70% of the time and movement sharpens under the 787 endeavor, Boeing can abbreviate the change time by using suppliers’ ability to make unmistakable parts. In like manner, Boeing may have the ability to decrease the advancement cost of the 787 by abusing seller’s inclination. With in like manner outsourcing, correspondence and coordination amongst Boeing and its suppliers will induce the opportunity to be essential for managing the advancement of the 787 change program (Hitt and Xu 2015). To support the management and collaboration among dealers and Boeing, Boeing formally comprehended an online tool called “Exostar” that is required to get store system unmistakable quality, update control and blend of vital business blueprints, and abatement change time and cost.

Reduction of Direct Supply Base – To decline progress time and cost for the Dreamliner, Boeing can reinforce pivotal association with different level 1 providers who will diagram and make complete segment of the plane and send them to Boeing (Bachman 2014). By lessening its smart providing base, Boeing can focus on a observable measure of its thought and assets on working with level 1 providers (pre-mix stages) to a certain extent than with foul material securing and early part subassembly. Regardless, unless the supplier relationship is coordinated unequivocally, lessening the supply base can manufacture supply perils as a result of the diminished wheeling and dealing power of the producer (Kotha and Srikanth 2013). The framework for hypothesis behind this change is to empower its key suppliers to make and go on unmistakable scopes in parallel to diminish the change time. Furthermore, by moving all the more party operations to its key accomplices engineered in different countries, there is a potential store assets being made cost moreover.

Operations Management of Boeing and Airbus

Reduction of Financial Risks – Under the 787 structure, Boeing faces another challenge of sharing contract under which no key sellers will get bit for the change cost until Boeing goes on its essential 787 to its clients (slated to be ANA bearers) (Williard et al. 2013). This assertion part term was proposed to offer inspirations to huge assistants to take an interest and deal with their change tries. Regardless of the way that this assertion obliges certain money related challenge for Boeing’s basic contractors if improvement due dates are missed, they are incentivized by allowed to guarantee their secured headway, which can then be supported to various affiliations later on (Howie 2015). Another blending power for the key accomplices to recollect that this portion of term that is licensing them to build up their wage (and potential inclinations) by implementing proper development so that the time taken by the complete space by the plane is less.

Increased manufacture Capacity without acquiring increased Costs – decentralize the get-together approach would lead Boeing to farm out frameworks that are non- critical. The objective is to decrease the capital theory for the 787-change courses (Kothari 2016). In like path, under the 787 period system, Boeing needs three days for gathering complete zones of the Dreamliner at its plant. In gratefulness to the 737 stock structure, this uncommon reducing in method reach would thusly hoard Boeing’s creation limit without watching extra hypotheses.

This current century’s developing patterns and practices in supply chain management in the business aircraft industry are guided by essential lean supply chain management rehearses that have been spreading all the more broadly inside the guard airplane business over the previous decade (Gudmundsson 2015). Amid this period, as a component of the more extensive diffusion of incline hones, the most striking changes crosswise over supplier systems regarding cost decrease has been through procedure upgrades, including the selection of procedure innovations. The latest case in the vast business aircraft inventory network demonstrate that procedure upgrades have a great deal more to contribute as far as both expense diminishment and lead time funds (Song et al. 2014). Inside Boeing itself, vital cost reserve funds have been accomplished through procedure enhancements, specific regarding get together operations. It is imperative to note that a large number of these procedure upgrades, which contrast regarding their extension and objectives, are utilized as a part of conjunction with each other, to determine the greatest correlative impacts.

Boeing has divided it supply chain management activities into several subtasks and delegated each management part to different stakeholders. The duties of these stakeholders and the supply chain management activities are as follows:

Stakeholder	Duties within the supply chain management system
Procurement Agent	v  Development of supply chain strategies v  Execute  and Negotiate supplier contracts v  Collaborative relationships and performance of supplier is managed. v  Assessing capacity and capability of the supplier by  Identifying & mitigating supply chain risks
Procurement Analyst	v  Development,  and deployment of  supply chain metrics  v  Documentation support is provided to the supplier and contracting management v  Manage and Distribution of data that are related with supplier & Boeing
Supply Chain Analyst	v  Forecasting, managing and optimizing inventory  v  Schedule and older parts, products, services & data  v  Store,  receive ship and distribute inventory
Supply Chain Logistics	v  Global transportation and logistics infrastructure  of Boeing is managed  v  Manage and maintain collaborative relationships with authoritarian agencies, transportation, organizations and service providers
Supplier Quality	v  Conducting product observance assessments  supplier process and supplier process v  Educating and coaching internal organizations and suppliers on regulatory compliance, Quality system and company quality initiatives

Project Management (PERT/CPM Diagram, Gantt Chart)

Figure 1: CPM Diagram

(Source: Created by Author)

Figure 2: Gantt Chart

(Source: Created by Author)

Figure 3: WBS Chart

(Source: Created by Author)

Critical Analysis of Boeing and Airbus Tools

Boeing uses web based tool called Exostar for its business purposes. In this contraption, Boeing uses Managed Access Gateway (MAG) to securely relate its Supplier Portal to the Exostar trading associate gathering (de Millan et al. 2015). Suppliers that oblige access to the Boeing Portal are issued One-Time Password (OTP) tokens as a second component of customer confirmation, going before getting to the Boeing Portal and potentially other Exostar or untouchable applications.

Difference in OM Aspects of Boeing and Airbus

Airbus uses ADOC web instrument for its business and operations. Airbus’ e-game plans are proposed for flight operations building, pilots, prosperity executives and backing and planning work power because of innovative programming and specific instruments (Xiao and Luo 2015). The essential destinations are to provide the customers of Airbus abilities for enhancing their functions and for growing accessibility of task, while withdrawing costs and decreasing hypotheses.

ADOC gives a series of services that are related with software for ensuring cost-effective and consistent operations (Chaston 2013). For the operations of flight, these e-solutions includes the following tasks:

• Safety and new Safety Management System (SMS) requirements
• Fuel and flight efficiency
• Electronic Flight Bag (EFB)
• Digital management of documentation

ADOC is more efficient than Exostar as it provides more options for customer and client support as well as a variety of other features that cannot be found in Exostar. Hence, even in the use of web based tool, Airbus has been able to surpass Boeing by a large margin.

Role of IT in Boeing and Airbus

Technical development has been the driving variable for enhancing aircrafts’ operational benefit. Aircrafts have could diminish costs and redesign operations by utilizing pushed plane motor headway, IT courses of action, and reduced improvement (Grabianowski 2015). The advancement has enhanced availability and improved voyagers’ travel experience.

Fuel is a bearer’s greatest cost part. At this moment, it speaks to more than 30% of total working expenses. According to Boeing, advanced aircraft technology provides the following benefits:

• More efficient aircraft models
• More fuel efficiency in aircrafts
• Enhanced passenger experience during flights

Airbus has been similarly affected by IT systems. However, they have been able to utilize latest IT tools more effectively and spread their business worldwide (Avdzhieva et al. 2014). Hence, IT has played a major role in the development of Airbus Company.

Conclusion

From the report, it can be concluded that although Boeing is one of the best companies in Aircraft business, it has faced a large number of issues that have dealt a serious blow in the business of the company. Due to poor future planning and futile marketing policy, although Boeing saved themselves from immediate downfall, the problems continued to persist. On the other hand, Airbus made the right decisions regarding the marketing policies and operations management and hence, they were able to surpass Boeing in terms of business as well as services

The following recommendations can be provided for Boeing.

Future Planning – They should emphasize on future planning instead of only temporary fixes.

More Technical Upgrades – They should apply technical upgrades in addition to internal upgrades. Boeing must solve the problems of the aircraft bodies and batteries that have become serious problems in the last few years.

Risk Assessment – They should do a risk assessment test to determine possible risks in the application of upgrades.

Better Marketing Strategies – They should use better marketing strategies.

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