Lean Complexity Through Tailored Business Streams

Abstract

Aircraft manufacturers are always facing a trade-off between value of variety and cost of complexity. They must balance their customers’ needs for aircrafts tailored to their precise needs, against the costs associated with the complexity of customization. Yet it is possible to gain both objectives.

Both complexity and costs can be reduced with a better understanding of customization. This does not mean eliminating individual features. Airlines always will need a high level of customization to remain competitive; product variations always will exist.

Instead, it means managing the choices of where and when to customize more effectively, and thus choosing which costs to regard as investments. The entire value chain—including suppliers, tier-x levels, and final assembly can be structured to allow for inherent variability. Parts, components, and process level can be segmented into three streams of activity: “basic and stable”, “variable but predictable”, and “random and emergent”. These business streams can be tailored to the different needs of each customer.

This type of segmentation avoids the “one size fits all” approach that many aircraft manufacturers find themselves adapting to. After adopting that approach, one recent commercial aircraft client, for example, showed up to 30 % operating costs reduction along the supply chain. By dividing the value chain into three parts, the manufacturer ends up with a far more coherent whole system.