Operations Analysis

Aircraft manufacturing Industry

• Sunayana
• Tanya
• Pavithra
• Krishna Vamsi
• Rithvik
 OPERATIONS STRATEGIES

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Introduction Strategies

AIRCRAFT
Industry characteristics MANUFACTURIN PESTLE Analysis
G

SWOT Analysis Other aspects

 INTRODUCTION

• Aviation has come a long way since its early days. It was 1st only a mode of
transport for the wealthy but now its purposes have increased and the demand for
air travel is expected it rise further.
• Aircraft designs have evolved since its early days with new technology such as
weight reductions increased efficiency however there are some rupture
technologies that contribute to the impressive fuel economy of aircraft.
• Aviation industry is highly driven by competition between aircraft manufacturers
i.e. both airbus and Boeing play a huge role in moving the aviation industry
forward.
• Aviation is one of the most unifying industries worldwide because it is what
brings the worlds together.
 Industry Characteristics
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• The aerospace industry is characterized by a relatively small number of large firms and
numerous international partnerships at every level and is considered as one of the largest
manufacturing industries in terms of monetary value, employment, and product output.

• There are numerous types of aircraft included in this industry such as airplane, helicopter etc
but the majority customers of this industry include commercial airlines, transport companies
and the military.

• Manufacturing and assembling of complete units of the aerospace industry mainly involves a
prime contractor and several tiers of contractor who sell components such as electric control
unit, wings etc to the prime contractor.

• The R&D cost and investment required by this industry is quite high and risky compared to
other industries. In addition, there are numerous other cost such as that of excessive
specifications, multiple design changes, storage of units etc.
 Process selection and Facility
Aircraft manufacturing follows layout
a Job
In term of facility layout, for aircraft
Shop process as the aircrafts are built in
manufacturing a Fixed position or
low volumes and are high in variety due to
location layout is highly suitable due to
customization or modification.
the job being bulky and heavy(Wiegand &
There is a continuous need in aircraft Stone, 2018).
manufacturing to reschedule work orders
The various components, heavy material,
to meet the customers demand and
and sub-assemblies that are association
specifications which makes Job shop the
with the project of manufacturing an
ideal process to be followed by the
aircraft remains stationary while the
industry.
process is completed by movement of
Even though there is an advantage of equipment, machine and workers.
handling wide variety of work in Job shop,
Even though this layout reduced the fixed
the disadvantage that arises in that the
cost, it increases the variable cost
process in slow, high in cost and there is a
incurred during manufacturing.
complied planning and scheduling
procedure that is followed.
 • Boeing's manufacturing in Renton, US, reconfigured its preexisting jigs
and tools to cover the increased production without disrupting the old
facility, which is now at max potential. Boeing eliminates the risk of
producing extra production capacity by keeping the firm's present
footprint.
• In addition, advanced production techniques are making their way into
HIGH the business. On the 777X, Boeing is also promoting robotic technology
by automation rivet and bucking chores. Robots do not replace labor, but

DEMAND they do reduce the number of people who must be needed in order to
construct aircraft at a faster pace.

MITIGATIO
• Companies are negotiating with their suppliers more strategically.
Boeing, for instance, is grouping orders of basic materials and
components to gain volume prices rather than having smaller suppliers

N compete for access to daily products like fasteners. In the meantime, GE

Aviation has launched eight joint ventures with vendors in the last two
years, securing access to crucial capability and innovation like fuel

STRATAGIE nozzles from Parker Aerospace, fueling system from Woodward, and
thermal interface coating on ceramic matrix composites from
Turbocoating.
S • As the expression goes, an aircraft is made up of 1 million components
flying in a tight formation. That defines the supply chain as well, and
thus far, the parts have been able to keep up with the increased
manufacturing rates. As a result, companies and their vendors are
rushing to expand production capability throughout the world,
complicated, and heavily restricted supply chains yet demand stays high
(Barnhart et al., 2012).
 • The aviation sector, like the rest of the world, is facing several issues in terms of
geopolitics. Most airlines operate on a worldwide scale, making them exposed to
external influences such as political unrest and economic fluctuations. Political
support and development in the economy are significant intrinsic elements
fueling long-term expansion in air traffic in the commercial aircraft industry.
LOW • In the aircraft manufacturing industry, there is a lack of effective cybersecurity
safeguards. The potential of cyber breaches is increasing as more airlines,

DEMAND OEMs, and MROs embrace big data technologies and condition monitoring.
Improper cybersecurity can also be quite expensive for the aviation business.

MITIGATIO • Minor errors and delay can set off a chain reaction, causing expenses and
timelines to run out of control from such a large wide range of suppliers. There's
also a chance that businesses will have disagreements with vendors or

N contractors over work specifications, supply quality, or consumer complaints.

• The A&D industry is seeing a decrease in demand. Demand growth puts more

STRATAGIE
pressure on OEMs as well as their vendors' productive capacity. The number of
possible vendors for crucial parts and components is limited. The danger of
disruptive event related to supplier breakdown is significantly higher for these

S kind of components.
• In the case of the aftermarket, an oversupply of some parts is affecting
conventional inflated prices because old aircraft retire, thus presenting a major
danger to the financial survival of some aircraft aftermarket suppliers.
• Workforce shortages in the aircraft industry are quite real, and they will
continue to be a burden for the market in the coming years.
 Operations strategies used in sector
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Operations strategy leads to efficient use of operating resources which results into competitive advantage and world
class status .
Air transportations is the safest means of transportation. So a better strategy enables for more and better services.
Organizations need to first identify where the gaps are or where they need more knowledge. Later to see how they
can fill those gaps. It can be in economics, environment safety and flight operations or ground handling and cargo.

Due to the halt, impact on the supply chain, and how significant it will be. If there is reduction in capacity the impact
will be immersive, at the same time, there will be some fundamental changes, as there will be relatively of number of
passengers. Live if you’ve got less passengers the unit cols would go up and the suppliers will be forces to charge in
some outlet, there’s a more fundamental opportunity here.
There is a significant impact in terms of aircraft economics and passenger comfort. When we talk about the long time
we can see that there is going to be a shift in model perhaps that type of aircraft which is economically variable starts
to flu passengers point to point which in turn , which brings a whole new industry into the aviation sector.

Waters 2006 developed an eight step process of developing an operations strategy including: an assessment of the
current strategy, defining the purpose, goals and objectives of operations, analyzing the operations environment,
analyzing the internal operations, listing of the alternative operations strategies, evaluate the alternatives and choose
the best, amend the chosen strategy and implement the chosen strategy.
 Example-
Strategies Applied By Boeing-
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1.Technological inventions had a significant influence on every aspect of business and
manufacturing.
2.Organizational innovations. The company has expanded its products and services,
starting from the development of aircraft and their mechanisms up to mail delivery and
maintenance amenities of the airports.
3.Contribution in research programs to be launched into public institutions like NASA
(National Aeronautics and Space Administration) and FAA (Federal Aviation Administration).
4.Environmental Strategy: Since the early 70s Boeing researched the chance to explore energy
in a more environmentally friendly.
 Quality Management

Aviation authorities like ICAO require aircraft manufacturers to take adequate

steps in order to ensure quality and safety. Some of these include establishing a
quality management system (QMS), appointing a quality manager, operate a
quality assurance programme to verify that all steps in the production process
meet the required standards.
• The QSM includes measurement, analysis and constant improvement processes.
These include auditing, inspections, tests, preventive and corrective actions.
The industry highly relies on ethical businesses and diligent managers as there is
no room for negligence.
• Conducting quality audits are not just for regulatory requirements, but also to
ensure passenger safety.
QMS and SMS ( Safety management system):
• QMS focuses on conformity and SMS focuses on hazards.
• Both of these impact the quality and must be assessed for maximum safety.
 SWOT Analysis
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STRENGTH
• Manufacturing clusters have thrives in Gujarat and
Chennai due to India’s geographic location
providing India with a strategic advantage of
linking Africa, South Asia and Australia.
• Many institutions are set up that focus on expertise
in engineering and design skills.
• Airbus and Boeing have establishes their R&D
facilities in Bengaluru and Hyderabad respectively.
OPPORTUNITY
• Growing commercial aviation market in Asia has
attracted leading global manufactures to India, giving
local suppliers an opportunity to gain knowledge in
this sector.
• Foreign companies outsource work to India due to
the skills that the people posses in the fields of
engineering and product which increase job
opportunities (Chandra et al., 2016).
WEAKNESS
• There is an absence of original Equipment
Manufactures (OEMs) in Indian Aerospace Industry.
• Most aircraft manufacturing companies including
HAL lacks the ability to compete beyond the nation
boundaries.
• Due to restrictive policies regime the entrance of
foreign players to Indian manufacturing space takes a
long time, affecting modernization of the industry
THREAT
• Geo-political factor can affect the free flow of passengers
traffic and cargo between the countries as market
perceive new entrants as uncertain.
• Foreign companies in the name of off shoring might
perform only those processes in India that can be
harmful for the environment.
• The probability that the huge investment made in
various stages of aircraft manufacturing end up in profit
through success in less mainly due to inefficient R&D.
.
 PESTLE Analysis
• Political Analysis:
9/11 attacks impacted airline demand so badly that the passenger demand remained low even after 2
years of attack and due to this, aircraft manufacturing companies had received less orders and they had to
survive through this untimely crisis for a long time.
Several aircraft manufacturing companies accuse each other that the companies receive funds unfairly
from their respective governments which is biased attention.
• Economic Analysis:
Increase in Fuel Prices in the last few years had made several aircraft manufacturing companies to
terminate or delay in the processing of orders worth $US 100 Billion.
The 2008 economic recession caused due to sub-primes affected aircraft manufacturing sector in several
ways. Many aircraft manufacturing companies like Boeing laid off their workforce.
• Social and Environmental Analysis:
The propensity to travel show a direct impact on aircraft manufacturing. The propensity to travel refers to
the relationship between public’s desire to travel and the GDP. In 2015, this was 25% and by 2035, it is
estimated to rise to 75%.
Due to several commitments and agreements had been made to curb climate change, aircraft
manufacturing companies should implement environmental regulations to ensure that they are
manufacturing by following all environment standards.
• Technological Analysis:
Advanced technology is the key driving factor of this industry. Industry wise, this helps
the companies to use technology as a differentiating factors which gives them a
competitive edge as well technology will help the industry to reduce its cost of
manufacturing, thereby making their output ensuring efficiency and quality. Boeing
manufactured 50% of its’ 787 Dreamliner with the help of composite materials. They
announced their new engine made by collaboration of General Electric and Rolls Royce
will improve fuel efficiency by 20% compared to Boeing 767.
• Legal Analysis:
IATA introduced new emission regulations to ensure environmental protection and
efficiency in fuel usage. This regulation made aircraft manufacturing companies to re-
engineer their engine design. If the companies are not abiding to it, they need to pay huge
amounts as fine.
In the legal environment, the major challenge of industry is that companies should ensure
that their operations are consistent with the health, safety and employment laws of that
country.
 COVID-19 IMPACT

Project analysis
• It's described slide
as the biggest crisis 11history.
in aviation
• With borders closed to limit the spread of the coronavirus, airlines are forced to ground their fleets,
costing them billions in lost revenue every month.
• Some airlines are hoping to resume flights and restore links as countries begin to ease their
lockdowns.
• But many places, such as the UK, are making it mandatory for travelers to spend two weeks in
quarantine when they land.
• British Airways, EasyJet and Ryanair are challenging the government ruling in court.
• The International Air Transport Association says 2020 will be the worst year on record, with airlines
set to lose 84 billion dollars.
 • Boeing
• Boeing has said it needs access to public and private financing, including loan
guarantees, to bridge the gap between now and March 2020. Airlines, airports,
suppliers, and manufacturers will be able to bridge to recovery using this
method. A large portion of any financial assistance provided to Boeing will be
utilized to pay suppliers, which will help preserve the supply chain's health.
• Work-spaces, communal areas, and high-touch surfaces will be cleaned more
Response of thoroughly as Boeing continues to produce the planes, according to Boeing
officials. Until further notice, all workers who could work from home are being

Aerospace directed to do so.

• Airbus
Manufacturing • Airbus declared that the company will consistently monitor the Covid-19
situation across the world also evaluating the impact on employees, customers,
Sector to Covid-19 suppliers and the business.

Pandemic • In February 2020, Tianjin Final Assembly line has been closed by the officials
also abided with the restrictions placed in China by enabling the staff to work
from home.
• Due to the containment measures taken forward by the France and Spanish
Government, Airbus closed their manufacturing units and halted their
production temporarily.
• Airbus announced that the company will work closely with clients to make sure
that the impact of these decisions on their regular operations is minimal.
Cont.

• Triumph Group
• Triumph group officially announced initiatives that they will implement to save USD 75 million by
decreasing overheads, travel and corporate events also by laying off indirect & temporary workers.
• Mitsubishi Aircorp
• To reduce the spread of Covid-19 pandemic, the company has decided to call off the press meet for SpaceJet
M90 Flight Test Vehicle 10.
• Textron Aviation
• Textron Aviation (which makes aeroplane brands Cessna and Beechcraft) would furlough 7,000 or more
workers in the U.S. from March 23 to May 29 due to worries about the spread of the coronavirus.
 CONCLUSION

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• We are in the middle of a crisis aviation industry has ever faced. We are at a gasp of new revolution in
aero space. There’s lots of new opportunities. The aero space industry has been truly innovative. In
terms of focusing on weight, propulsive innovation ,aerodynamics and configuration . Covid19 might
have been a set back but the aviation industry is still growing and is also coming up with new
strategies to over come and go along with the present situations and conditions.
• Air travel is moving towards a cleaner, faster and lighter future as it works to meet its net zero
emissions goals. By banking on renewables, such as Sustainable Aviation Fuel (SAF), to bounce back
from the pandemic, the industry is emerging stronger than ever before, ready to embrace a sustainable
future.
 References:
• Wiegand, D. W., & Stone, K. S. (2018). Aircraft Manufacturing Facility Design - the Austin. Retrieved September 30, 2021,
from https://theaustin.com/wp-content/uploads/2019/04/Aircraft-Manufacturing-Facility-Design_Final.pdf.
• Chandra, N. S., Raghavendra, N. V., & Shekar, G. L. (2016). Aerospace Industry of India: Analysis of strengths, weaknesses,
opportunities and threats. 2016 7th International Conference on Mechanical and Aerospace Engineering (ICMAE).
https://doi.org/10.1109/icmae.2016.7549594
• Barnhart, C., Fearing, D., Odoni, A., & Vaze, V. (2012). Demand and capacity management in air transportation. EURO
Journal on Transportation and Logistics, 1(1-2), 135–155. https://doi.org/10.1007/s13676-012-0006-9
• UKEssays. (November 2018). Civil aircraft manufacturing industry. Retrieved from
https://www.ukessays.com/essays/aviation/civil-aircraft-manufacturing-industry.php?vref=1
• Jennifer Brown, C. G. (n.d.). Aircraft A380.
• Sri Addepalli, G. P. (2018). Socio-economic and demographic factors that contribute to the growth of the civil aviation
industry, Procedia Manufacturing,. Procedia Manufacturing, 2-9
• “Quality Control in the Global Aerospace and Defense Manufacturing Industries.” InfinityQS, 2017,
www.infinityqs.com/industry/aerospace-defense.
• Freeman, Graham. “Quality in the Aerospace Industry.” Intelex Blog, Intelex Technologies ULC, 5 Nov. 2018,
blog.intelex.com/2018/08/10/quality-aerospace-industry/.