May 18, 2021

Airbus letter criticises suppliers over quality issues

Sourcing
supplier relationship management
supplychain
Procurement
2 min
Airbus has criticised its suppliers in a letter which ordered them to “demonstrate they are factory-fit for increased single-aisle jet output.”

 

Suppliers of the European aircraft manufacturer Airbus have come under pressure from the company after a letter was sent to them ordering them to “demonstrate they are factory-fit” for an increase in the output of single-aisle jets, and criticised them over “recent industrial quality problems”.

The letter, which was sent to suppliers in late March, called for “immediate action” to be taken in preparation for a high output of aircraft. While not giving any specific targets or instructions, the letter pointed to a slim margin of error as Airbus tries to reboot an industrial ecosystem badly affected by the pandemic. 

According to reports, Airbus last week told its suppliers to “be ready for the output of 53 A320neo family jets a month” by the end of next year. This is a 13-jet rise on Airbus’ current monthly output, and eight more than the 45-aircraft target the company is aiming for this year. 

Suppliers are required of Airbus to undertake specific actions, such as ensuring parts are ordered from sub-contractors on time, and they must implement “proper buffers” or inventory to anticipate future increases in output, Airbus says. 

Sources in the industry predict that this may lead to “fraught negotiations” as some suppliers are not willing to spend without payment guarantees from planemakers. As travel restrictions ease, it is expected that Airbus’ medium-haul jets such as the A320neo will take charge of recovering the air travel industry, particularly as regional travel reopens in China and the United States. 

 

Quality issues are still a problem

“We are still facing too many issues. Our first priority is to raise the bar on quality”. These were the words contained in Airbus’ letter to its suppliers, whom it has given “72 hours max” to report and contain any new quality defects as soon as they have been discovered. While there is no evidence to suggest that these issues are detrimental to airline safety analysts have said that they cause expensive delays to aircraft production.  

Airbus operates a supply chain with 8,000 direct suppliers and 18,000 indirect suppliers and claims that they must inform the company “whenever parts use components or material from a different source or are built at a different time”. This is known as the Transfer of Work change. 

Manufacturers are tasked with monitoring these changes at any given time. It is, however, difficult to ensure that the rising number of them happens “without any impact on quality and deliveries”, which has become an increasing concern for Airbus. 

As a result, the letter urged suppliers to act early, stating: “Over 2021-22, more than 680 Transfers of Work will be ongoing across the globe, illustrating the deepness of the crisis.”

 

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Jun 16, 2021

LogicSource: Elevating the Brand of Sourcing and Procurement

LogicSource
IndirectSpend
Strategicsourcing
Procurement
2 min
LogicSource, a Procurement Services and Technology provider, launches a Procurement Council which aims to “elevate the brand of sourcing and procurement"

LogicSource, a purpose-built Procurement Services and Technology provider focused exclusively on indirect, or not-for-resale, expenditures has announced the launch of the LogicSource Procurement Council which aims to “elevate the brand of sourcing and procurement”

LogicSource focuses on goods and services not-for-resale, which typically represent 20% of a company’s revenue and hold great opportunities for improved buying efficiencies. 

The LogicSource Procurement Council is an invite-only “Community of Practice” (CoP) for like-minded sourcing and procurement practitioners and leaders looking to discuss industry trends, technologies and market intelligence.

The member-led council will cover topics such as supplier diversity & inclusion, forging relationships between CPOs and CFOs, and leveraging new and innovative Procurement technologies. Current members consist of industry veterans from leading brands such as IBM, Nordstrom, Target, and 21st Century Fox. 

“The pace of change in the procurement industry is accelerating daily, and it’s becoming increasingly difficult for industry leaders to stay up to speed on the latest trends and technology,” said Sam Vail, managing partner of LogicSource’s OneMarket technology solution. 

“The LogicSource Procurement Council is an opportunity to bring together like-minded professionals to address critical procurement challenges and discuss important strategies to overcome barriers and elevate procurement’s critical role in business operations. It’s our mission to provide our members with the market intelligence, best practices and technologies they need to reduce costs, empower their procurement teams, and demonstrate their value to stakeholders”.

Membership benefits include:

  • leadership and networking events
  • ad-hoc sessions with LogicSource experts
  • a complimentary instance of LogicSource’s OneMarket Portfolio sourcing project management software
  • opportunities for career development 

 

Procurement professionals interested in joining the LogicSource Procurement Council can email John DeMattia ([email protected]) for more information.

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