ITA Europe 2015 Keynote Speaker - c.ymcdn.comc.ymcdn.com/sites/ Europe 2015 Keynote Speaker Airbus Procurement Olivier CAUQUIL Head of Material & Parts Procurement Chairman of the

ITA Europe 2015 Keynote Speaker

Airbus Procurement Olivier CAUQUIL

Head of Material & Parts Procurement

Chairman of the AIRBUS GROUP Material Board

© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Way forward

Aerospace Market

Titanium Market Outlook

Performance

Airbus Material & Parts Strategy

May 2015 Airbus - Procurement


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

Data to end April 2015

11,688 Orders

6,544 Deliveries

313 Operators

A320

- Superior comfort, lowest

cost and highest reliability

A320neo - 20% lower fuel

burn



The most modern, efficient & comprehensive range of widebody aircraft available today

1,502 Orders

1,183 In service

102 Operators

A330

- The world’s most

popular mid-size

aircraft

A330neo - 14% lower

fuel burn, more seats,

more range




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




A380 – a solution to increased demand for air transport

310+ Orders

150+ Deliveries Customers

18

A380

- Most profitable, most

comfortable way to transport

more people

A take-off or landing every

4 minutes




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

1st flight of A320neo

Launch of the A330neo

1st A350 XWB delivered on time to Qatar Airways on 22nd December


Continuous Growth of Production Volume

with New Aircrafts involving more and more Titanium


Airbus Performance Backlog up to 30th April 2015 – Commercial Aircraft

The high volume of order backlog ensures long-term sourcing demand.

Approx 6,400 @ end of March

9 to 10 years at full production !

1,350

3,794

174

778

158

6,399 Total order backlog 145

Sources: Airbus Orders & Deliveries

(to end April 2015)



Titanium Market Outlook



ILLUSTRATIVE Material & Parts Procurement Characteristics

A very diverse footprint

Glo

balizati

on

global

regional

local

Supply base consolidation low medium high

Standard Parts

Chemicals

Composites

Forgings

&

Castings

Titanium

Aluminium

Metallic Detail Parts Size indicates Volume

: With

Titanium impact



AIRBUS Metallic commodity

Every working day, Airbus products manufacturing requires

around 30 tons of Titanium (2014 consumption)

Titanium, Forgings & Castings

Supplier

locations

UNITED KINGDOM FRANCE GERMANY

UNITED STATES

RUSSIA KAZAKHSTAN

New aircraft models require more Titanium:

The input weight of Titanium is 18 times higher on

A350 XWB than on A330

2013 2020

Forgings

Casting

Titanium

Spend evolution 2013 => 2020(*)

Forging: +50%

Casting: +10%

Titanium: +180%

All incremental development (NEO’s) to support

optimisation of Aircraft performance involves

new Pylon, where Titanium is key

Composite is a new major player in Aircraft

manufacturing, Titanium demand is linked

Titanium is key for Airbus


JAPAN CHINA AUSTRIA

(*)estimation


Airbus

Material & Parts Strategy



Material and Parts Strategy is articulated around 5 Strategic Objectives

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

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

Competitiveness



Optimize Buy to Fly Ration to improve Total Cost of Ownership

We need to engineer Cost out of the Supply chain.

All proposals will be considered

Enlarge scope of work only when bringing real benefits

Reduce Non Value Added

at the interfaces

Billet

Plates

Casting

Machining Nesting

Forging


Reduce scrap and optimize scrap value when it can not be avoided


Buy to fly evolution

Impact on Buy to

Fly reduction

Maturity

Extrusions

Smart Welding

ALM

Nesting

Increase maturity of Buy to Fly optimization techniques.

Create more opportunities.

Forming

Step 1

Step 2

Step 3


Innovative 3D-printing

technology is beginning to

shape the future of aircraft

component manufacturing.



We are reaching record high production volumes,

we need to de-risk our supply chain.

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 developing Regional / Continental supply chains,

which will serve the needs of both Airbus and our Suppliers’

Propose an efficient and

consistent global footprint

Meet market access requirements

Develop local for local supply chain

Develop Best Cost Sourcing approach

Pre-requisite : $ spend (natural hedging)

Billet

Plates Forging

Casting Machining Assembly

Standard

Parts Special

Processes




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?

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




Develop synergies within Airbus

Group and Extended Enterprise

Less than 20% of the Airbus Group Material demand is directly ordered by Airbus

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


Airbus

20% Airbus BUs + Enabled suppliers

80%


Way Forward



Titanium strategy Way forward

Airbus Confidential

4.480

5.845

Stable and robust supply

Deliver on

commitments

Boost

competitiveness

Investigate all opportunities to

improve the Total Cost of

Ownership of flying parts

Prepare the

future

Innovation and new technologies

Technological trade-offs

To push the most competitive

solutions forward

Supplier development



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.


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ITA Europe 2015 Keynote Speaker - c.ymcdn.comc.ymcdn.com/sites/ Europe 2015 Keynote Speaker Airbus Procurement Olivier CAUQUIL Head of Material & Parts Procurement Chairman of the