Airbus balance scorecard-ppt


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Airbus balance scorecard-ppt

  1. 1. Airbus S.A.S. (Société par Actions Simplifiée) Pilot : Naikal Appasaheb (G0701340H) Co-Pilot : Lim Siew Chen (G0701339E) Air Steward : Wallace Zheng Yu (G0701307F) Chia Sok Mui (G0701327B) Ho Mei Yee (G0701333A) VIP : Mr Kan Siew Ning Passenger List : K6226 class
  2. 2. AgendaAgenda Aviation History o Aviation History o Industry Overview Aircraft Maker Industry o Overview o Key Players o Porter’s Five Forces o Industry Trends & Outlooks Dinner Break (Class Exercise) Airbus S.A.S o Overview o Business Strategy and KM Strategy o Strategy Map and Balance Scorecard Questions & Answers
  3. 3. Aviation HistoryAviation History Activity : Video watching 1 Time : 3min 45secs
  4. 4. Aviation Industry Overview
  5. 5. Knowledge Transfer Between Players
  6. 6. Along with the European Aviation Safety Agency (EASA), the Federal Aviation Administration (FAA) is one of the two main agencies worldwide responsible for the certification of new aircraft. Air Type Certificate, is awarded by aviation regulating bodies to aerospace manufacturers after it has been established that the particular design of a civil aircraft, engine, or propeller has fulfilled the regulating bodies' current prevailing airworthiness requirements for the safe conduct of flights under all normally conceivable conditions (military types are usually exempted). Aircraft produced under a type certified design are issued a Standard Airworthiness Certificate.[1] Airworthiness certificate is an FAA document which grants authorization to operate an aircraft in flight. [2] Sample : Air Type Certificate Airworthiness Certificate Source: [1] [2] Adobe Acrobat 7.0 Document Government Regulator: FAA & EASAGovernment Regulator: FAA & EASA Adobe Acrobat 7.0 Document
  7. 7. Aircraft Maker IndustryAircraft Maker Industry
  8. 8. Key PlayersKey Players Airbus and Boeing are the only players in the commercial aviation industry for 100 or more seats capacity Source:
  9. 9. Airbus vs Boeing Airbus Boeing Entity An EADS Subsidiary Public Founded 1970 (Airbus Industrie) 2001 (Airbus S.A.S.) 1916 (Seattle, WA) Headquarter Toulouse, France Chicago, Il, USA Key People Thomas Enders, CEO W. James McNerney, Jr. CEO Industry Aerospace Aerospace & Defense Products Commercial airliners Commercial airliners Revenue €23.5 billion (2005) $61.5 billion (FY 2006) Employees 55,000-57,000 153,000 (2006) Slogan Setting the standards Forever New Frontiers Source:
  10. 10. Airbus vs. Boeing Products Source:
  11. 11. Very Large Commercial AircraftVery Large Commercial Aircraft Source: A380 747-8 Speed 0.85 mach. 0.855 mach. Range 10,521 mi 10,254 mi Wingspan 261 ft 224 ft Max takeoff weight 1,235,000 lb 970,000 lb Capacity 525-853 450 Cost US$319 million US$300 million Taxiway Wider Normal Operation cost Cheaper Higher
  12. 12. Key CustomersKey Customers 8 more to come Source:
  13. 13. Competitive PositioningCompetitive Positioning Source: Airbus 2005 annual Report
  14. 14. PorterPorter’’s Five Forcess Five Forces AnalysisAnalysis
  15. 15. Five-Forces Analysis Supplier Power • High technology • Various supplier needed for specialized in different parts and components • Supplier dependency on company is low. Buyer Power • Fewer manufacturer choices • Costly to switch to another aircraft producer - maintenance, retraining cost. • Low bargaining power of buyers Threat of Substitute • Buyer propensity to substitute low due to nearly no alternative • Price & performance of substitute not attractive Industry Rivalry • Equally balanced competitors • Low Differentiation Low Low High Low HighThreat of Entry • High switching costs • High capital requirement • High economies of scale • High Retaliation •Government policy and restriction
  16. 16. Industry TrendsIndustry Trends && OutlooksOutlooks
  17. 17. Industry TrendsIndustry Trends Source : Airbus Air traffic demand will double in next 15 years. Airport capacity will not.
  18. 18. Industry TrendsIndustry Trends -- Aircraft DeliveryAircraft Delivery Sources : Wikipedia and Airbus
  19. 19. Source: Industry OutlookIndustry Outlook • North America and Europe are also expected to remain significant. • Traffic within China is now expected to add more RPKs than any other flow in the next 20 years, with the domestic and intra- European flow next in order of importance using this measure. 2nd highest growth Highest Growth
  20. 20. Industry OutlookIndustry Outlook
  21. 21. Dinner Break!Dinner Break! (Class Exercise)(Class Exercise)
  22. 22. Class Exercise : Who are these Airbus customers? Lufthansa Air France Qantas Em irates
  23. 23. Airbus S.A.SAirbus S.A.S ((SociSociééttéé par actionspar actions simplifisimplifiééee ))
  24. 24. Toulouse subsidiaries Airbus of North America Airbus China Airbus Japan Airbus Worldwide Presence History of Airbus o Airbus established in Dec 1970 o Place : Toulouse, France o Employees : 57,000 o Shareholders : * EADS (80%) * BAE Systems (20%) Training Centers o Toulouse (France) o Miami, Florida (USA) o Hamburg (Germany) o Beijing (PRC) Main Subsidaries o Airbus North America o Airbus China o Airbus Japan
  25. 25. Mission & ValuesMission & Values Mission : create the best and safest aircraftMission : create the best and safest aircraft Airbus' mission is to meet the needs of airlines and operators by producing the most modern and comprehensive aircraft family on the market, complemented by the highest standard of product support. ValuesValues Airbus fosters values of excellence and innovation among its culturally- diverse employees and considers its customers, contractors and suppliers to be partners working in the interests of safety, quality and performance. Source:
  26. 26. Airbus ResultsAirbus Results Source: Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Aircraft orders 556 476 520 375 300 284 370 1111 824 1458 Value of orders 39 30.5 41.3 44.7 24.3 24.3 34.4 95.9 75.1 181.1 (US$ billion) Cumulative orders 3203 3633 4125 4399 4632 4886 5252 6307 7097 8555 Aircraft deliveries 229 294 311 325 303 305 320 378 434 453 Turnover US$ 13.3 US$ 16.7 US$ 17.2 Euro 20.5 Euro 19.5 Euro 19.3 Euro 20.2 Euro 22.2 Euro 26.0 N/A (billion) Cumulative deliveries 1894 2188 2499 2824 3127 3432 3752 4130 4564 5017 Order backlog 1309 1445 1626 1575 1505 1454 1500 2177 2533 3538 Number of customers 160 169 173 180 191 186 204 225 271 287 Number of operators 158 178 188 188 188 210 232 249 250 286 Aircraft orders = 62% ^ Value of orders = 78% ^
  27. 27. Sources : Airbus AIRBUS FLEET STRUCTURE
  28. 28. Airbus Business StructureAirbus Business Structure Source:
  29. 29. Airbus SWOT AnalysisAirbus SWOT Analysis Source:
  30. 30. Airbus Cost StructureAirbus Cost Structure Source: EADS
  31. 31. Business StrategyBusiness Strategy Supply • Airbus announced it would axe more than 80% of its supply base. • It would reduces the company’s supplier rolls from the current 3000 to just 500, to reduce material costs by ₤1 billion (US$1.9 billion; S$2.8 billion) over the next three years. • Supplier consolidation will also cut administrative costs by an additional ₤235 million (US$446.5 million; S$665.3 million) Support Strategy • Rather than becoming a standalone business unit, building an integrated customer support can help make Airbus airplanes more attractive. • To create a network of MRO (maintenance, repair, and overhaul) providers - Airbus "e- solutions" for maintenance.
  32. 32. Business StrategyBusiness Strategy Innovation • Align strategic vision and innovation goals with implementation of throughout the organization, focusing on collaboration both vertically and horizontally. • Managing boundaries enables collaboration across organizations, establishing structures and processes regarding governance, operations and technology. • Finally, an ongoing commitment is required to orchestrate and systematize collaboration for innovation throughout the organization and its extended enterprise over time. Customer • Establish stable relationships with all customers, from the biggest to the smallest, from major airlines to regional airlines and start-ups
  33. 33. AirbusAirbus KM StrategyKM Strategy 5 Strategies Codification Focus Personalization Focus Competitive Re-use Business emphasises commonality in fleet design. Provide high quality, reliable, and fast implementation by reusing codified knowledge. Customisation Business emphasises highly customised service offerings. Provide creative and rigorous solutions by focusing on centres of excellence. Economic Reuse economics Customize Spares Logistics: Airbus is taking responsibility to deliver spares & kits directly to the customer, generating additional revenues. Expert economics Charge high fees for highly customised solutions to unique problems. Knowledge Management People-to-documents Migration of technical documents from paper to digital support. Provide innovative e-portal solutions for customers and suppliers. Promote knowledge reuse through EBOK. Person-to-person Form CoPs across functions boundaries to bring together experts with different interests. Marketing and Story-telling success stories Form “College of Experts” network. Strong collaboration with institutes, partners and universities. Information Technology Repositories Invest heavily in IT to provide e-solutions (AIRMAN, AIRNET, AIRTEC, LPC etc) to customers and suppliers. Networks Invest moderately in IT to facilitate conversations and the exchange of tacit knowledge Human Resources Re-users Hire people suited to reusing knowledge and implementing solutions. Provide best possible training to employees. Reward people for using and contributing to document databases Inventors Hire talented and creative people. Regular performance reviews and personal development planning. Introduce “Awards of Excellence” for individual and team success.
  34. 34. AirbusAirbus KM SharingKM Sharing - Bounce recovery – Reject Landing - Preventing Tailstrike at landing - Crosswind Landings Landing Techniques - Flying Stabilized approach - Aircraft Energy Management during Approaches Approach Techniques - Decent and approach Profile ManagementDescent Management - Revisiting the ‘STOP’ or ‘GO’ Decision - Preventing Tailstrike at Takeoff - Understanding the takeoff speeds - Response to Stall Warning aviation at Takeoff Takeoff and Departure Operations - Enhancing Terrain Awareness - Birdstrike Threat Awareness - Wake Turbulence Awareness / Avoidance - Volcanic Ash Awareness Operation Environment - Human Factor Aspects in Incident / Accidents - CRM Aspects in Incident/Accidents - Managing Interruptions and Distractions - Effective Pilot / Controller Communications - Enhancing Situation awareness - Error management - Visual Illusion awareness Human Performance - Operating Philosophy - Optimum Use of Automation - Operation Golden Rules - Standard Calls - Normal Checklists - Conducting Effective Briefings Standard Operating Procedure - FSF ALAR Task Force Recommendation - From Non-precision to Precision-like Approaches Industry safety initiatives - Forward - Introducing the Briefing Notes Concept - Glossary of Terms and Abbreviations - Use of Hyperlinks How-to-use briefing notesFlight Operations DocumentsDocument GroupCategory
  35. 35. AirbusAirbus KM SharingKM Sharing - Ground Support Equipment and ToolsBest Practices - Human Performance and Limitations - Error Management Human PerformanceMaintenance - Effective Briefings for Cabin Operations - Cabin Smoke Awareness - Management In-flight Fires - Planned Ground evacuation - Unplanned Ground evacuation - Cabin decompression Awareness - Turbulence threat awareness Cabin OperationsCabin Operations
  36. 36. KM Metrics @ AirbusKM Metrics @ Airbus Number of documents published Number of unique users Number of answers users provided Number of frequently-asked questions documents created Knowledge Management Reduction of errors in issue resolution Define commonality of folder structures and adherence to that commonality Increase in reuse and efficiency of knowledge Increase in accuracy of information captured Usability and retrieval of information Economics/Reuse KM MetricsKM Strategy
  37. 37. Community ofCommunity of Practice@AirbusPractice@Airbus Book of Knowledge Knowledge repository for engineers that helps to share best practices and lessons learned. • Leverage the sharing of tacit knowledge across organizational boundaries, • Reuse experience (Preservation of knowledge) • Reduce learning curve for new engineers Source: Enabling Communities of Practice at EADS Airbus
  38. 38. Airbus Strategy MapAirbus Strategy Map andand Balance Score CardBalance Score Card
  39. 39. Strategy Map
  40. 40. Strategy Map (cont.)
  41. 41. Strategy Map (cont.)
  42. 42. Strategy Map (cont.)
  43. 43. Strategy Map (cont.)
  44. 44. BSC - THE FINANCIAL PERSPECTIVE No of gross orders No of backlog orders No of new customer orders vs fleet models Increase new business orders Achieve 20% more in total gross order by FY08 Achieve 10% more in total backlog order by FY08 Achieve 10% order from new customers per models Market and Technology leader % market share No of innovation products and services Total no of aircrafts delivery % of reduction in CO2 > 50% market share 2 or more major products/services/yr Achieve 15% increase for FY08 10% reduction in FY08 MEASUREMEASURESTRATEGIC GOAL % of order from various fleet models TARGET KPI TARGET KPI XX% A320 XX% A3XX XX% A380 INITIATIVESINITIATIVES Participate in air shows globally Tell/Publish success stories on various medias Provide innovative solutions to customers Introduce new aircraft model Provide financial solutions to leasing companies, corporate, budget and full service airlines and air-cargo companies Broaden Revenue Mix
  45. 45. BSC - THE CUSTOMER PERSPECTIVE Technical dispatch reliability rate Provide rapid response to customers Achieve more than 99% operating reliability for all fleets Leading-edge manufacturing Time to market No of defective products from suppliers Supplier Rating Production rate per aircraft model per month Reduce cycle time by 30% <10% defective rate per suppliers <10% of supplier rejection XX A320 XX A340 XX A380 MEASUREMEASURESTRATEGIC GOAL No of patents and innovations invented No of innovations adopted TARGET KPI TARGET KPI Increase 30% by FY08 10% improvement from FY07 INITIATIVESINITIATIVES Collaboration with institutions and universities Leveraging Information Systems and Experts for knowledge creation and reuse Increase employees collaboration around the world Improvement in manufacturing processes Effective supply chain management Develop new technology Improve collaboration with partners No of collaborations with partners Participate in at least 10 new initiatives in FY08
  46. 46. BSC - THE INTERNAL BUSINESS PERSPECTIVE Customer Satisfaction Rating Customer retention rate Increase customer satisfaction Improve customer rating by 10% by FY08 Increase no of repeated customer orders by 10% per year Cost & Time Reduction in Production & Maintenance Training cost for ground crews, pilots, etc(Airbus Cross Crew Qualification (CCQ)) Less than 2wks of training for pilot conversion and crew maintenance MEASUREMEASURE STRATEGIC GOAL Maintenance downtime TARGET KPI TARGET KPI Require less than 1hr per model INITIATIVESINITIATIVES Provide innovative solutions to customers Improvement in manufacturing processes Conduct Customer Satisfaction Surveys, Email and Mail Surveys Provide excellent after sales service Implement design commonality in all fleets Ensure compliant to EASA and FAA requirements Effective supply chain management Provide Safe & Quality fleets & Services No of test flight hours conducted No of on-time delivery Compliance to ISO14001 standards Reduce accident rate 10% more than regulatory requirement 99% on target Zero NCN per audit Reduce accident rate by 10% Increase customer confidence Increase new aircraft models Total no of choices available for customers 10% increment in amount of choices available
  47. 47. BSC - THE LEARNING AND GROWTH PERSPECTIVE Career development Staff attrition rate No. of employees promotion Not more than 20% in FY08 5% increase for capable employees MEASUREMEASURESTRATEGIC GOAL No of Master and PhD qualifications No of training hours per annual Employee skills assessment Percent of employee awards related to quality Employee satisfaction/organization climate surveys TARGET KPI TARGET KPI Achieve 20% from recruitment exercises Attain at least 48hrs of training per employee/year Cross training of core knowledge and technical skills 50% increase in number of awards related to quality by FY08 Achieve more than 80% by FY08 INITIATIVESINITIATIVES Hire Key Technical Employee. Improve employee work conditions. Provide excellent and extensive training courses for employees Provide language training and promote intercultural awareness Conduct regular reviews plus personal development planning with employees Celebrate and reward individual and team performance Tie incentives to quality Provide mentoring to new employees Form CoPs Develop, train, retrain current and new employees. Attract, develop and retain knowledge workers (Skill Development) No of intercultural activities conducted No. of woman graduate recruits. Achieve at least 1 activity per month At least 20% of total recruits Diversified Workforce Promote Knowledge Sharing No of ideas created and codified/published At least 2 new ideas from each employee
  48. 48. Remember : What Get Measure Get Done!!!
  49. 49. Airbus Innovative Customer Services - AIRTAC Activity : Video watching 3 Time : 4mins 7sec Demonstration of KM practice
  50. 50. Thank youThank you for your attentionfor your attention