Commercial Aircraft Projects

Managing the Development of Highly Complex Products

Hans-Henrich Altfeld

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317163831
• Edition: 1
• Topic: Technologie et ingénierie
• Subtopic: Transport et navigation

When it comes to very highly complex, commercially funded product-development projects it is not sufficient to apply standard project management techniques to manage and keep them under control. Instead, they need a project management approach which is perfectly adapted to their complex nature. This, however, may generate additional cost and a dilemma arises because in commercially-driven product developments there is the natural tendency to limit the management-related costs. The development of a new commercial aircraft is no exception. In fact, it can be regarded as an extreme example of this kind of project. This is why it is especially useful to analyse the project management capabilities and practices needed to manage them. Cost reductions can still be achieved by concentrating on the essential elements of some project management disciplines, to maintain their principal strengths, and combining them in a pragmatic way on the basis of an integrated architecture. This book goes beyond descriptions of management disciplines found elsewhere in its treatment of the architecture integration necessary to interlink product, process and resources data. Only with this connectedness can the interoperation of the management essentials yield maximum efficiency and effectiveness. Commercial Aircraft Projects: Managing the Development of Highly Complex Products proposes an integrated architecture and details, step-by-step, how it can be used for the management of commercial aircraft development projects. The findings can also be applied to other industrial sectors that produce complex hardware based on design inputs.

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PART I
Introducing Basics in Project Managing Aircraft Development

1
Why Commercial Aircraft Development is so Special

In order to justify a dedicated management approach for it, it is firstly necessary to explain why the development of a commercial airliner is distinctively different – if not unique – compared to most other product developments and what is actually meant by ‘commercial aircraft development’?

DEFINING COMMERCIAL AIRCRAFT DEVELOPMENT PROJECTS

Commercial aircraft development is about developing new aircraft designed for the purpose of people¹ or cargo transport operating in a primarily commercial environment whereby the development is commercially managed as well.

The question whether such development can generally be regarded as a project or rather a programme leads to more than just an argument about semantics: the precise perimeters must be defined, as this has many technical and managerial consequences.² For the purpose of this book the total scope of designing, developing, supporting, maintaining and so on of an aircraft is defined as a programme rather than a project. A programme then covers a huge variety of components and stretches across the whole life-cycle, covering many years as well as different phases such as Research, Development, Production, among other. Projects generated for the purpose of developing an aircraft stretch across the actual Development phase only and apply to major component assemblies like the wing or the hydraulics system as well as the integration of the entire aircraft. Thus, developing a commercial aircraft is a large project consisting of smaller projects or multi-projects, which each can still represent billions of dollars of business volume.

Developing such projects commercially means that they are financed commercially. This definition excludes, for example, military aircraft, which usually are entirely government-funded.³, ⁴ This is because governments want their indigenous industry to produce aircraft with superior technologies, the development of which industry cannot afford to finance commercially. This is especially the case for technologies that are significantly different compared to those embodied on existing products.

‘By almost any measure, the [B-2] bomber’s development was one of the largest, most technically complex, expensive and demanding programs in aerospace history…. Whatever resources were deemed necessary to meet national security goals, they were made available, despite the cost. “We kept a top-10 list of [B-2 concerns] on the briefing-room wall,” [B-2 chief project engineer Albert F.] Myers recalls. “We were seven years into the program before “cost” made that list.”⁵

But are commercial transport aircraft developed by Airbus, Boeing and other aircraft manufacturers really developed commercially or isn’t commercial aircraft development generally funded by governments, too?

The answer to this question lies at the heart of a fierce debate between Europe and the US, which lasted for about 20 years and – after some quiet years – recently erupted again.⁶ The US Government accused Europe of unfair subsidies for its commercial aircraft developments. In the sixties, where the skies were almost exclusively dominated by US commercial aircraft products, European Governments were willing to invest into an industry, which looked promising from a high-technology perspective with all its derived strategic benefits but where the entry into the market had to be enforced. This was done through the granting of reimbursable loans, repayable over a period of time with interest as well with royalties based on the number of aircraft sold. In the beginning, no one in the US took the European initiative to develop new commercial aircraft seriously, and therefore no one was worried about this funding approach. But with the breakthrough of the Airbus A320 and subsequent gaining of more and more market share, the US administration became alerted about this perceived direct support mechanism.

In reply, Europe claimed that the US was using unfair subsidy practices by applying technologies, methods, processes and tools to its commercial airliners, which were developed for and funded by the US Department of Defense, and under contracts from NASA. This was and is called indirect support. Examples for this are the Boeing 707, which was primarily developed as a tanker aircraft for the US Air Force, as well as the Boeing 747, which was largely based on Boeing’s proposition for a super military transport aircraft.⁷

‘An impressive list of technologies, design tools, management techniques, manufacturing processes and myriad lessons spawned by the B-2 [bomber] program are contributing to many commercial and military programs. … even Boeing’s 777 airliner have close ties to the B-2.’⁸

The discussions between Europe and the US resulted in various agreements, the most important one being the General Agreement on Tariffs and Trade (GATT) agreement on trade in large civil aircraft, which limited the application of both, direct and indirect support mechanisms.⁹ It was signed and took effect on July 17, 1992 and became widely known as the 1992 agreement. Under the terms of this Agreement, only one-third of the total development cost could since then be funded through reimbursable loans at rates at least equivalent to the cost of government borrowing, plus 1 per cent. Indirect support in excess of 3 per cent of the annual commercial turnover of the civil aircraft industry for large civil aircraft¹⁰ was also prohibited. As a result, development of modern commercial aircraft must be regarded as a predominantly commercial venture rather than a governmentally funded one, even if both Europe and the US continue to claim each other’s violation of the 1992 agreement, which incidentally was unilaterally abrogated by the US in 2004, leading to trade cases being put by both sides before the World Trade Organisation (WTO).¹¹

ABOUT THE REQUEST TO MINIMISE COST OF MANAGEMENT

Where governments are themselves customers of products, they have introduced – and are prepared to fund – Management disciplines like Project Management and Systems Engineering to ensure a high probability of achieving development objectives in terms of schedule, cost, quality and performance. In fact, the development of most of the Management disciplines mentioned in the Preface has been funded by the US Department of Defense as well as by NASA during the 1950s and 1960s. Since then, they have been contractually requested as Management disciplines to be applied for military aircraft or large space project developments by both, US and non-US governmental customers. This is because government administrations need to be able to tightly control budgets allocated to them through the annual parliamentary budgetary process.

As a result of governmental interests in meeting objectives, in particular cost objectives, the application of state-of-the-art Management disciplines has reached a level of sophistication with the involved contractor companies, which is unmatched by other industries – apart maybe from the nuclear industry. However, such disciplines do not come for free as they are usually quite resource intensive. About 10–15 per cent of total development cost is acceptable to governments to be absorbed by them.

For a commercial development of any product, this 10–15 per cent would come directly off the annual profit of the company. As in commercial development there is no contractual obligation of whatever kind to apply Project Management, Systems Engineering or any of the other Management disciplines, there is a natural tendency to limit the costs associated with them. This can also be observed with commercial aircraft developers. However, commercial aircraft are very complex products and their development is equally complex and challenging. This would require the highest level of Project Management sophistication. Yet it cannot be afforded. There is here a fundamental dilemma typical for all commercially funded projects of very high complexity.

Fortunately, there is a way out of this dilemma: by concentrating on the essential elements of such disciplines – to keep their principal strengths – and combining them in an intelligent and pragmatic way, cost reductions can be achieved. This is why the management of commercial aircraft must be performed on the basis of affordable essentials taken from state-of-the-art Management disciplines combined with a fully integrated approach.

Developing a commercial aircraft really is a mega-project due to the many complexities involved. In fact, there are hardly any other product developments with this level of commercial orientation and complexity. What are these complexities all about? In his book Taming Giant Projects, Grün defines complexity ‘by the number of activities and milestones, and the number of participants who need to be coordinated to achieve the project goals’.¹² In the case of commercial aircraft developments, complexity encompasses some important additional aspects as will be outlined below.

VOLUMETRIC COMPLEXITY

Aircraft for people transport are physically much larger than many other products, for example cars or computers. Significant numbers of people are therefore required to develop an aircraft. In today’s business environment thousands of people work together during the Development phase to deliver the aircraft to the first customer within time, budget and of the right quality. At Boeing, about 6,500 employees were tasked with the 777 development.¹³ At the peak of the development, around 6,000 people worked at Airbus to make its mega-liner A380 a reality. Another 34,000 are estimated to have been directly involved in the project at suppliers.¹⁴

In addition, although not directly linked, size is a good indicator for the number of individual parts. A car may consist of some 7,000 parts, whereas an airplane can consist of up to 6 million parts’.¹⁵ Boeing engineers working on the 777 described it as more than ‘4 million parts all moving in close formation’.¹⁶

‘I saw Boeing’s new jet as 75,000 drawings, 4.5 million parts, 136 miles of electrical wiring, 5 landing gear legs, 4 hydraulic systems, and 10 million labour hours.’¹⁷

Even if fasteners are not included in the counting of parts, there are many hundreds of thousands of individually-shaped pieces of different types of material on a modern commercial aircraft. Both the number of people and number of components involved represent volumetric complexity. Managing so many people coherently and so many parts logistically represents a major challenge on its own.

SYSTEMS’ COMPLEXITY

A system is generally defined as...