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An Industrial perspective on Through-Life-Costing November 2008 Estimating and Managing Through-Life-Costs Presented by: David GORE

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Presentation on theme: "An Industrial perspective on Through-Life-Costing November 2008 Estimating and Managing Through-Life-Costs Presented by: David GORE"— Presentation transcript:

1 An Industrial perspective on Through-Life-Costing November 2008 Estimating and Managing Through-Life-Costs Presented by: David GORE

2 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 2 Welcome to the world of Airbus a few facts

3 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 3 Passengers at heart. Airlines in mind. Airbus achievements by the end of 2007 included An annual turnover of 32.1 billion A gross market share (units) of 51 % Delivering 453 aircraft and selling 1,341 in 2007 Surpassing 8,000 aircraft ordered by 286 customers Supporting 5,000 aircraft in service with 287 operators Regularly achieving over 50% of large civil aircraft orders and deliveries Welcome to the world of Airbus Data to end Dec 2007

4 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 4 Evolution of the Airbus family a world of innovation 9,175 orders 300 customers 5,366 delivered to date 453 delivered in 2007 Evolution of the Airbus family Data to end Sept 2008

5 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 5 European Roots with global outreach a world of cultural diversity 1 global company 3 customer support centres 4 training centres 5 spares centres 9 engineering design centres 16 manufacturing sites 20 languages 24 hour customer support (365 days a year) 50 flight simulators more than 88 nationalities 160 offices 298 customers 290 resident customer support managers 296 operators More than 5,000 aircraft delivered 56,000 employees

6 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 6 Though Life Costs Through life costs If we cant afford it dont build it? David Gore Airbus UK, 2008 When we mean to build, we first survey the plot, then we draw the model; and when we see the figure of the house, then we must rate the cost of the erection; which if we find outweighs ability, what do we then but draw the model in fewer offices, or at least desist to build at all? William Shakespeare Henry IV, Part 2,1.iii, 1598

7 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 7

8 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 8 Through Life Cycle Costs, Why are they important ? Environmental Impacts Reductions in greenhouse gas emissions to prevent global warming Reductions in Noise output Airport congestion Through life costs Diminishing world resources Fuel & commodity prices will only go up Recycling & or disposal will become more important Understanding the drivers for these is key To enable Airbus to meet these challenges. To enable Airbus to maintain its position. Possibility that authorities will legislate to achieve these, probably through increased taxation. Mitigating the Risk and realising the opportunities associated with these will become increasingly important.

9 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 9 Because our Customers are asking for it easyJet has become the first airline to outline the environmental requirements that must be met by the next generation of short- haul super-clean aircraft; and unveiled its design of what such an aircraft could look like for operation by Dubbed the easyJet ecoJet, the aircraft would need to be 25% quieter and would emit 50% less CO2 and 75% less NOx than todays newest aircraft (the 737 and A320 families of aircraft). Rear-Mounted open rotor engines for short haul flying due to their efficiency A lower design cruise speed to reduce drag and a shorter design range to reduce weight Noise reductions to come from a gearbox between the engine and the open rotor blades Airframe to be made of advanced materials such as carbon fibre Key features include: Through life costs

10 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 10 What does this mean ? Evolution or Revolution: The history of Aircraft design has arguably been one of conservative evolution, however the problems addressed previously require a revolution. Through life costs The problem Airbus and other design professionals face is not so much a lack of ideas; ideas are historically what designers have been best at providing. The task facing designers today is in dealing with limited resources in such a way that the optimum design is chosen.

11 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 11 Understanding the Challenges Market Requirements High productivity Low cost of operation Superior reliability / maintainability Comfort / health driven cabin design Low cost of acquisition Environmental Pressures Low noise Reduced emissions Low manufacturing impact Integration in the System Airport congestion Good airport compatibility Through life costs

12 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 12 What do we need to do. We need to develop high levels of competence in the area of cost control and cost awareness, to enable our new design to meet these challenges, for example:- Through life costs Development costs and over runs effect Low cost of acquisition. There may be restrictions on travel as resources run out, we need to address this now with our future designs, however these must be cost neutral. We must be able to balance the benefits of a technology with respect to performance, against the cost to implement. We must be able to balance the benefits of a technology with respect to operating cost, against the cost to implement.

13 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 13 Addressing the challenge – current initiatives Airbus participating in the multi partner Integrated Wing project. This programme is of particular importance as it addresses the step changes called for by the The Aerospace Innovation and Growth Team (AeIGT) and the Advisory Council for Aeronautics in Europe (ACARE), set up to form partnerships between Government, Industry and Academia, under the heading of working together to ensure the competitiveness of the UK Aerospace Industry over the next twenty years. Airbus, Design to Cost Department collaborating with Queens University and QinetiQ: To create an integrated Life Cycle Costing model that will allow project partners to evaluate the impact of technologies being evaluated in the project. How: By creating a Knowledge Landscape that provides a Life Cycle cost modelling framework, where competing technologies can be evaluated. Resulting in the capability to trade off performance improvements against cost, and enable informed judgements to be made. Through life costs

14 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 14

15 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 15 Balance of Investments (illustration) Active Health Monitoring The use of smart sensors to predict the occurrence of an incident and reduce: Unscheduled maintenance Increase utilisation What cost would this technology bear: To maintain manufactures and airlines Internal Rate of Return? Without penalising the customer.

16 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 16 Active Health Monitoring (Set Baseline) Steps 1 & 2 Set the Manufacturers profit & notional ticket price to return predetermined Internal Rates of Return for Manufacturer & Airline.

17 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 17 Active Health Monitoring (Set Technology) The user may now specify and Apply a targeted improvement in reliability. It should be noted that as expected the number of missions has increased. However due to the cost increase to implement the Airlines IRR has reduced

18 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 18 Active Health Monitoring (Find Cost) Step 3 The model is now used to find the cost increase that this technology will bear to recover the Airlines IRR

19 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 19 Future Initiatives & Conclusions Airbus is leading the MDOW research and technology programme in collaboration with 15 leading British industrial and research companies to develop low-cost manufacturing methods that will enable high-volume wing manufacture for next generation aircraft. Future design processes will help reduce airline operating costs, airframe weight and maintenance. The programme will build upon, develop and enhance current knowledge both in the materials and especially in enabling rapid and cost-effective manufacturing whilst maintaining their excellent weight performance and the eco-efficiency benefits these bring to the Through Life Cycle Model. The Multi Disciplinary Optimised Wing (MDOW) Through life costs

20 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 20 and finally to bring the presentation to a close a short video that I hope you will find of interest: and finally finally what was the weight of the wing on the crane ? 24.6 t

21 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 21 Thank you for your attention

22 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. Page 22 © AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS S.A.S.. 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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