Department of Aerospace Engineering

OPERATIONS MANAGEMENT IN AEROSPACE

Module 1

Dr. Sharatkumar Variyar

Associate Professor, Department of Aerospace Engineering,
Dayananda Sagar University,
Hosur Main Road, Kudlu Gate
Bengaluru- 560 068.

Department of Aerospace Engineering, School of Engineering, Dayananda Sagar University

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 Course Introduction
* Syllabus, course outcomes.
* “Operations + Management + Aerospace”
* Context of the course
* Post COVID challenges in Aerospace Workforce
* Global conflicts
* Shifting geopolitics / supply chains
* Chandrayan – 3 success – Role of startups and Private players
* Sustainability challenges
* Changes in – Digital manufacturing, Industry 4.0, Cobots
* Defense sectors = Army+Airforce+Navy+ Space Force+ Cybersecurity +
Electromagnetic
* Change in Aerospace defense – “Dronification” – “Robotisation”
 SECTION ONE
Aerospace Industry Overview
 A&D

* This industry segment is called

- Aerospace and Defense
Market Porfolio
Terminology of the Airline Business

RPM / RPK – Revenue Passenger Mile / Kilometer

§ Way commercial air-traffic is measured
§ one passenger carried one mile/kilometer

§ For example, an airline which carried 250

passengers over 800 miles has its RPM as
200000
 Airline Terminologies cont’d
• Available Seat Mile (ASM):
Defines aircraft capacity
One seat carried one mile
Whether or not a passenger occupies that seat.

§ Hub & Spoke versus Point-to-Point transport

models
 Airline Terminologies cont’d

* Load Factor
* The percentage of RPMs to ASMs
* key measure of how efficiently the airline is utilizing its
capacity.
* Yield
* The amount of passenger revenue received for each RPM.
* Weighted average price, expressed in cents.
* Utilisation
* Number of hours per day, usually Block, that an airplane
operates.
 CLASS EXERCISE
Two Airlines A and B both operate in three flight sectors each. Their annual
statistics show the following trend

AVERAGE AIRCRAFT
PASSENGERS CUMULATIVE CAPACITY
PER FLIGHT MILES IN SEATS AIRLINE
SECTOR A1 101 20000 120 A
SECTOR B1 123 30000 180 B
SECTOR A2 190 50000 200 A
SECTOR B2 182 160000 200 B
SECTOR A3 240 120000 300 A
SECTOR B3 120 80000 132 B

Which Airline achieved a higher overall RPM considering all their sectors. A or B?
Which Sector logged the highest RPM?
Which Sector achieved the highest load factor?
 Airline Terminologies cont’d
* Two important measures are
* “Hours of Operation” and “Cycles of Operation”

* Revenue Hours and Block Hours:

* Block Hours are measured gate to gate (includes taxiing
time).
* “Block” refers to the placement and removal of a block under the
wheel at the gate.
* Aircraft maintenance is based on hours of operation
rather than miles flown.
* Revenue Hours are measured from take-off (wheels up) to
landing (wheels down).
 Airline Terminologies cont’d
A,B,C,D Checks
* Letters refer to the various levels of maintenance work that must
be done on every commercial airplane.
* “A” and “B” checks
* overnight at the airport / maintenance base
* every few days or weeks.
* “C” check is more extensive, performed about every fifteen
months, and takes the airplane out of service for several days.
* The “D” check is the most comprehensive of all, is done about
every six to eight years, and takes a month or more to complete.
* C and D timing depends largely on number of hours of operation
or the number of cycles
AOG - Aircraft on Ground - Indefinite - Till problem is eliminated
 Airline Terminologies cont’d
Cost Factors

• Capital Cost – the cost of buying the airplane

• Direct Operating Cost – the cost of using the airplane, including fuel and
maintenance

• Indirect Operating Cost – the annualized cost of utilizing the airplane in

delivering service

• Total Operating Cost – the sum of all costs involved in providing service
• Cost Per Seat Mile – the cost of moving a seat, full or not, per mile of route
served
Global Aerospace
Scenario
Tier1 Distribution
Tier Distribution
Program Evolution
Program Participants
 Case Study -A350 CFI

PROJECT:

This is the largest project ever subcontracted

by AIRBUS in engineering business

Involves 350,000 man hours

Contracted through Master Supplier
Agreement and a Dedicated Work
Package Agreement
Indian Aerospace
Scenario
Indian History
Domestic Air Transport
Airline Monitor – Resources on the
Web
Major regulatory & other agencies in Aerospace
INTERNATIONAL
* FAA – Federal Aviation Administration
* US DoT – US Department of Transportation
* EASA – European Aviation Safety Agency
* NTSB – National Transportation Safety Board
* SAE – Society of Automotive Engineers 70%

INDIAN
* CEMILAC- Centre for Military Airworthiness Certification
* DGCA- Directorate General of Civil Aviation
* DGAQA – Directorate General of Aeronautical Quality Assurance
 SECTION TWO
Operations Management Overview
 What Is Operations
Management?
Production is the creation of goods and
services
Operations management (OM)
is the set of activities that
creates value in the form of
goods and services by
transforming inputs into
outputs
Operations Management = OM

Organization

Finance Operations Marketing

The distinct –active- role of operations:

Inputs become Outputs after some Transformation
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High Level Overview of OM

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Organizing to Produce Goods
and Services

þ Essential functions:
þ Marketing – generates demand
þ Production/operations – creates
the product
þ Finance/accounting – tracks how
well the organization is doing,
pays bills, collects the money
 What Operations
Managers Do
Basic Management Functions

þ Planning
þ Organizing
þ Staffing
þ Controlling
 Responsibilities of Operations
Management
* Organising
* Planning
* Degree of standardization
* Capacity, utilization
* Location * Subcontracting
* Choosing products or services * Process selection
* Make or buy * Staffing
* Layout * Hiring/lay off
* Projects * Use of overtime
* Scheduling * Incentive plans
* Market share * Job assignments
* Plan for risk reduction, plan B? * Controlling
* Forecasting * Inventory
* Quality
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* Costs
 Scope of Operations Management
* Operations Management includes:
* Forecasting
* Capacity planning
* Scheduling
* Managing inventories
* Assuring quality
* Motivating employees
* Deciding where to locate facilities
* And more . . .

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The Critical Decisions in OM

þ Service and product design

þ What good or service should we
offer?
þ How should we design these products
and services?
þ Quality management
þ How do we define quality?
þ Who is responsible for quality?
 The Critical Decisions in OM
þ Process and capacity design
þ What process and what capacity will
these products require?
þ What equipment and technology is
necessary for these processes?
þ Location
þ Where should we put the facility?
þ On what criteria should we base the
location decision?
The Critical Decisions in OM
þ Layout design
þ How should we arrange the facility
and material flow?
þ How large must the facility be to meet
our plan?
þ Human resources and job design
þ How do we provide a reasonable
work environment?
þ How much can we expect our
employees to produce?
The Critical Decisions in OM

þ Supply-chain management
þ Should we make or buy this component?
þ Who are our suppliers and who can
integrate into our e-commerce program?
þ Inventory, material requirements planning,
and JIT
þ How much inventory of each item should
we have?
þ When do we re-order?
The Critical Decisions in OM

þ Intermediate and short–term scheduling

þ Are we better off keeping people on
the payroll during slowdowns?
þ Which jobs do we perform next?
þ Maintenance
þ Who is responsible for maintenance?
þ When do we do maintenance?
 CLASS ACTIVITIES

Use the concepts so far to discuss:

1. Starting a new Ice Cream Factory

2. Car garage – Inbound + In-Process + Out-Bound
3. New Private bus route from Bengaluru to Mangaluru
4. New Restaurant on Bengaluru-Mysore Highway
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Types of Manufacturing Based on
Volume and Variety of Products

High Job
Variety Shop
Batch
Mfg.
Low
Variety Repetitive
Manufacturing

Low High
Volume Volume

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 Why OM?

* Core of all business organizations

* Many areas interrelated with OM activities
* Management of operations is critical to create and
maintain competitive advantages

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Degree of Standardization is a key
consideration in OM

* Standardized output
* Take advantage of standardized methods, less skilled
workers, materials…
* Example: Iron, Wheat, most of commodities

* Customized output
* Each job is different
* Workers must be skilled
* Examples – Cooking, Artists

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Operations Strategy
Strategy Process

Customer Needs

Corporate Strategy

Operations Strategy

Decisions on Processes
and Infrastructure
 CLASS EXERCISE
Dell Versus Lenovo

* Discuss the COVID period surge in laptop demands

* How to apply the concepts of Operations Strategy
 Steps in Developing a Manufacturing
Strategy
• 1. Segment the market according to the product
group.
• 2. Identify product requirements, demand
patterns, and profit margins of each group.
• 3. Determine order qualifiers and winners for
each group.
• 4. Convert order winners into specific
performance requirements.
 Order Qualifiers and Winners

*Order qualifiers?
*They are the basic criteria that permit the firms products to be
considered as candidates for purchase by customers.

*Order winners?
*They are the criteria that differentiates the products and services
of one firm from another.
 Few High
Low Multiple Major Volume,
Volume, Products, Products, High
One of a Low Higher Standard-
Kind Volume Volume ization
I. Commercial Flexibility (High)
Job Printer Unit Cost (High)
Shop French Restaurant

II. Heavy
Batch Equipment
Coffee Shop
III.
Automobile
Assembly
Assembly
Line Burger King
IV.
Sugar
Continuous Refinery Flexibility (Low)
Flow Unit Cost (Low)
Tradeoffs of Performance Metrics

Cost

Flexibility Delivery

Quality
Thank you