Saturday, September 20, 2014

Outsourcing, a better way to go

Airbus orders and deliveries ( 31 August 2014)
                               
A300/A310
Single aisle
A330/A340/A350
A380
Total
Total orders
816
10934
2469
318
14537
Total deliveries
816
6201
1489
139
8645
Aircraft in operation
392
5973
1443
139
7947










From the summary table, we have a thorough view of aircraft orders and deliveries of Airbus in August 2014. With such large demand on aircraft of worldwide airlines, how does Airbus sourcing to the manufacturing, assembly line and delivery process to optimize the resources and gain more profits?

Airbus has made wise choice to move closer to customers, which greatly reduces transportation cost. With the increasing demand in aviation market, China has become a major region for Airbus, which has developed service office, assembly line and delivering center for two decades. In fact, it’s important to take customers’ preference into consideration so that manufactures can satisfy the regional needs more effectively.

After manufacturing, it goes to the assembly line. I once had a chance to visit the aircraft assembly line in Tianjin China. It resembles the assembly line in Hamburg Germany with same advanced technology and materials. Aircrafts are tested soon after the successful assembly. The whole process is operated locally without the manipulation of headquarters in Europe. It proves the efficiency and convenience of outsourcing.

Airbus outsourced service such as human resources, finance and procurement to better operate the company in China. For instance, human resources department provides visa processing and working permit service. All the works are outsourced to some specialized human resources companies located in Beijing. These companies are professional in different concentrations and fluent in the procedure and process. Airbus increases the value of the organization by focusing on the specialized companies and therefore reduces the cost of employee and daily maintenance. This strategy is generally adopted in the industry as a good way of outsourcing.

Compared to the outsourcing of Airbus, Boeing has also developed its strategy in outsourcing in China. With both the advanced technology and materials and service, what actions should they take to stand out in the boosting aviation market?

Reference:
The table is originated from Airbus http://www.airbus.com/company/americas/

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