EADS is continually leveraging groundbreaking technologies to develop products that provide its customers with competitive advantage. Yet the ambitious nature of EADS’ new programmes brings operational challenges, both within EADS and at its sourcing partners. These may concern product development or the associated manufacturing processes.

In 2005, the CEOs made improvement a key element of their long-term strategy. They have initiated a Group-level examination of how operational processes can be improved to ensure that maximum control over programmes is delivered on quality, on specification, on cost and on time, and how best practice can be better shared within the Group.

In view of the increasing role of innovation in accelerating new product development and internationalisation in fostering future growth, operational improvement is more essential than ever. As a technology leader in aerospace and defence with industrial partners across the globe, EADS’ need for world-class operational processes will be vital.

EADS’ long-term improvement initiative will focus on execution of the key operational processes that flow across engineering, manufacturing and procurement. In particular, it will concentrate on new product introduction and the supply chain. It will build on programmes already started, pooling resources across the Group, giving people the skills they need to make real improvements, and implementing best-of-breed processes and information technology tools.

When enhancing the processes behind introducing new products, EADS is looking to master solutions adopted by other technologically advanced industries. Cultural change is a priority. The challenge is becoming greater as EADS is ever-more dependent on key suppliers for product development. As EADS increasingly becomes the architect and integrator, so it must develop a spirit of true partnership with suppliers.

In the supply chain, EADS can adapt cutting-edge processes and supporting information technology solutions. In order to achieve world-class supply chain performance, it will be necessary to utilise state-of-the-art IT tools that complement those already being used in the Business Units.

Early-stage initiatives, like enhanced Customer Reviews or the Black Belt programme for building internal experts in the field, were well received by the Business Units during 2005, and there is strong demand for operational support.

Airbus has already carried out a similar improvement drive as part of its Route 06 initiative. Although primarily aimed at driving down cost, Route 06 is creating a much leaner and more efficient organisation, as indicated by a striking reduction in lead times. Between 2003 and 2005, the lead time between a buyer of a single-aisle aircraft stating its required specification, in terms of engines and cabins, and delivery, was reduced from nine to seven months. The experience of Route 06 can be used to make similar improvements in other parts of the Group.

In 2004, the Defence & Security Systems Division started a comprehensive ‘Programme and Risk Management’ (PRM) initiative, aimed at enhancing these critical skills and associated processes on a sustained basis throughout the Division. This programme will also be considered for Group-wide application.