Cross-Border Strategy Report: Boeing's Quality Management in China

This case study evaluates Boeing's quality maintenance efforts in the Chinese market, focusing on the quality management techniques employed by the organization to ensure safety. A thorough quality analysis is conducted using the Six Sigma framework, and key issues faced by jet makers in China, such as delays in deliveries and the emergence of domestic competitors like C919, are discussed. The report further explores growth opportunities for Boeing within the Chinese jet market, considering factors like increasing demand for air travel and the need for quality-assured aircraft. The analysis also touches upon Airbus's strategies in China, including joint ventures and quality certifications, providing a comparative perspective. Ultimately, the study aims to offer insights into the challenges and prospects of cross-border strategies in the aviation sector.

CROSS-BORDER STRATEGY REPORT

Executive summary
The current report tends to evaluate the efforts jet makers make towards quality maintenance in
the Chinese market. The report selects the company Boeing and evaluates the quality
management techniques used by the organisation to ensure proper safety. A thorough quality
analysis has been conducted by selecting a relevant framework. The issues faced by the brand in
the Chinese market have also been discussed and finally, the growth opportunities of the brand in
the Chinese jet market have been determined with a definite drawn conclusion.
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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Quality of analysis.....................................................................................................................6
2.1 Overview................................................................................................................................6
2.2 Framework.............................................................................................................................8
3.0 Key issues faced by Jet makers...............................................................................................11
4.0 Argument related quality and growth opportunities................................................................13
5.0 Conclusion...............................................................................................................................16
References:....................................................................................................................................17
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1.0 Introduction
A Quality Management System (QMS) is considered as an official method used in reviewing
products, service and operations of a business. In the opinion of Ross (2017), the method is
specifically used in business with an objective of identifying the areas needing quality
improvement. Quality has been termed as a vital constraint that distinguishes a business from its
rivals (Goetsch and Davis, 2014). The tools of quality management make sure alterations in the
methods and systems that ultimately lead to producing advanced eminence of product and
service lines. Quality management techniques, for example, Total Quality management has a
widespread objective of delivering superior quality products. Managing quality is necessary to
generate better eminence products that not only convene but also surpass customer satisfaction
index. In the consideration of Sallis (2014), it can be noted that business marketers can become
successful only after they focus on product superiority than quantity. The quality product helps a
brand to ensure of surviving a certain market uncertainty that could have been a threat for brands
if quality offerings were compromised.
Similarly, like all another sector, quality management is highly required in the aviation sector as
well. Siva et al. (2016) stated that jet aircraft need superior quality fuel for its engines to provide
the finest performance and a safe flight journey. Strict quality management, traceability and
presentation criterion shall be met using the fuel on jet engines. Moreover, the specifications
used to produce jets needs to be high quality approved by authorised centres to ensure safety
(Cabrerizo et al. 2015). The current report aims to evaluate the efforts jet makers make towards
quality maintenance in the Chinese market. The reports would select the company Boeing and
evaluate the quality management techniques used by the organisation to ensure proper safety. A
thorough quality analysis would be conducted by selecting a relevant framework. The issues
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faced by the brand in terms of quality management would also be discussed and finally, the
growth opportunities of the brand in the Chinese jet market would be determined.
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2.0 Quality of analysis
2.1 Overview
It has been identified that Airbus has formed a joint venture with China Aviation Industry
Corporation and established Airbus Beijing Engineering Centre (ABEC) to open a new lab of
nanocomposite materials with the collaboration of ‘National Centre for Nanoscience and
Technology of China’. Both the parties have signed a mutual agreement featured for engineering
aeronaut applications with polymer nanocomposites (Xu, 2018).
Both the parties have agreed to conduct the Research and Trade activities on toughening the
nano composites, electrically conductive and self-healing materials. The objective behind the
effort has been to discover the implementation of the nanocomposite technology as a state-of-art
in the jet making or producing sector of China. As per the records of 5th July 2018, it has been
identified that the parties have decided the research to be mutually carried out by the engineers of
ABEC and a set of finest and specialized Chinese universities and academies, involving Sun Yat-
Sen University, NCNST, HK University of Science and Technology, Tsinghua University and
Hong Kong Polytechnic University (Xu, 2018). The collaboration has also been supported by the
teams of the Chinese Academy of Science, resources of the Chinese Academy of Engineering
and Fan Shoushan, and also by Du Shanyi, who are handed over with the responsibilities of
project consultants. Airbus in China further committed to setting up its ‘Airbus Scholarship’
events in the NCNST to sustain the growth of the upcoming potential talents in the nanoscience
segment.
Moreover, it has been identified that the Chinese Airlines and the Jet Making companies were
awarded the certification of AS 9110and have become the service supplier of Airbus certified
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maintenance (China-airlines.com, 2018). The quality maintenance and assurance abilities of
China Airlines and Jet manufacturing segment have been persistent in winning international
appreciations and recognition. Furthermore, in January 2017, Airbus had signed an MOU
regarding safeguarding and quality assurance with Chinees Airlines in Taiwan has been strongly
appreciated with the AS9110 Certification award by the French Standardization Association
(AFNOR) with the witness of Taoyuan Mayor Cheng Wen-tsan. It has been determined that
AS9110certification is a quality assurance method based standard identified by the global aircraft
maintenance sector. AS9110 certification overlays the methods for the Chinese Airlines and Jet
producers to turn out to be certified aircraft maintenance service supplier of Airbus by the end of
2017 (China-airlines.com, 2018). The rising insist for aircraft safeguarding from Airbus patrons
in the Asia-Pacific province shall definitely lead to create and enhance new business
opportunities with the passage of time.
As per the statement of August Tsai, the Vice Chairman of AFNOR it can be understood that
both the Boeing and Airbus are considered as the top two jet makers in China as well as in the
global context (China-airlines.com, 2018). They are also regarded as the sanguine and the most
prospective brands for the future aviation sector. As the figure of latest airlines and fresh aircraft
deliverances in Asia-Pacific province prolong to attain new-fangled heights, Taiwan’s innermost
site in Asia-Pacific, internationally finest jet producing and preservation supervision abilities, as
well as absolute the supply chain of aerospace have turned up to be an attractive associate for
outsized overseas brands. The distinctive past records and range of the Chinese Airlines in the
Asia-Pacific jet sector, as well as the protection of its stern and strongly considers AS9110
worldwide jet supervision administration certification point out that fact that China jet markers
are presently possessed a supervision and quality assurance potential of world-class standards. In
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other words, it can be stated that the China Airlines and jet markets are on the verge of playing in
the immense leagues of the intercontinental aerospace and jet market.
2.2 Framework
Furthermore, the quality management of Airbus would be further evaluated with the Six Sigma
framework.
Define
It has been assessed that in the year 2011, Airbus Defense and Space had initiated a crossing to
implement effective lean management methods and an uninterrupted development viewpoint. To
sustain the alteration, the corporation has managed to frame a format that tends to endorse the
change supervision and cultural transformation (Flores, 2018). This plan designed by the chosen
brand also involved the formation of suitable “Lean days”, “Lean Network” and appropriate
electronic policy for the purpose of lean education. To initiate and incorporate the changes and
development in the realistic platform, 13 unremitting development projects had been launched in
the year 2014, which enabled the brand to save 3 million Euros.
Measure
The Airbus Group has also established a cutting-edge technology to improve the quality and
stability of the features installed within the jets. This enabled the brand to become a global
(including China) pioneer in space, aeronautics and other defence allied service lines (Akpolat,
2017). With the combination of its successful European pasts and Asia Pacific present, the brand
has managed to outreach its diversity talent, innovative technological drives, internationalisation
and integration. The incorporation of better technology and innovation within the system has
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definitely helped Airbus to measure the potential of its quality range and deem the extent to
which it can ensure safety.
Analyse
Airbus Jets and Helicopters are considered to be the world's foremost producers of the defence
segment (Gee, 2018). The brand had in very short time period got engaged in an international
arrangement to serve potential customers in a better manner that includes the restoring heritage
operating methods with the state-of-the-art of digital abilities (Bourget, 2018). As an element of
the digital conversion, Airbus Jet and Helicopters were purposely seeking for an influential
factory preparation and shop floor key that could enable the brand to limit its time to produce
and make and thereby, increase the degree of operational efficiency.
Control
Antony (2017) determined that Airbus jets are highly intricate machines that necessitate
correctness production and by a complex group of intellectual property holders and suppliers.
With the incorporation of “Build to Operate” system, the brand offers Jets and Helicopters
followed with effective digital continuity through its production process ranging from operation
to lean shop floor execution, which positively impacts on its bottom line. The brand maintains
the excellence of cutting and optimizing its lead time and develops the operational competence
that is considered to the most important process for Airbus to gain competitive advantage with its
orders for steadily rising latest machines (Anbari, 2018).
Improve
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The “Build to Operate” segment resolution knowledge is specially modified for the defense and
aerospace sector and influences the Apriso manufacturing portfolio of the DELMIA. With the
framework “Build to Operate,” Airbus Jet and Helicopters were enabled to control, monitor and
authenticate every single aspect of production operations with the support the digital accuracy—
arraying from certain replicable methods and manufacturing progressions, to the course of
deliverables all the way through its supply chain (Bourget, 2018). It has been assessed that the
Airbus Jets could easily virtually execute, plan, model and share the finest suitable methods,
practices and product lines all through the engineering, design, production and deliverance of
obtainable and latest jets (Westgard and Westgard, 2017). With the procedure recreation and
corroboration in practical mechanized surroundings, the business is capable of defining and
incorporating the lean production carry outs to progress program presentation.
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3.0 Key issues faced by Jet makers
Information released in 2018 indicates the fact that Airbus had wanted to sell a near about 200
more jets in the Chinese market. However, the Chinese airlines had to take deliveries from
several airlines it had orders initially (Greig, 2018). It had been identified that across the Airbus's
industrial units in both the Germany and France, more than a dozen of A321neos and A320neo
had been prepared as distant back as previous spring, had been in storage space waiting for the
final signs offs or signals from the Chinese Civil Aviation Administration. More than half-dozen
of A350s neo for Chinese carriers were found waiting in the Toulouse, chief headquarters in
southern France.
It can be stated that the Chinese jet sector is not only the suppliers of its foreign jet makers. Its
airlines are considered amongst the finest and largest buyers of Airbus jets (Reuters, 2018).
However, the recent study highlighted the fact that in the recent time, China is putting to
establish its own passenger jets, which has been flying its marrow body planes with the name of
C919. This has been a real threat for the international jet markers like Airbus, Boeing, etc. These
brands expect a considerable size of business from the Chinese market due to its emerging
degree of demand.
Further information gathered from the Economist indicates the fact over the upcoming 20 years
both the American and the European aerospace and jet making giants had estimated China to
develop into their major single market owing to emerging demand for its new and quality
assured aircraft by the Chinese airlines who excessive interested to convene the increasing the
desire of both upper middle and lower middle class for flight travel through jet. Both Boeing and
Airbus forecasted that China would require at least 6,810 jets worth the amount of $1trn over the
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specific tenure (The Economist, 2018). The region owning ‘Commercial Aircraft Corporation of
China’ (COMAC) has been found keen to provide few of those jets. This has created an
explicitly tricky situation for both the Airbus and Boeing in which their primary and most
potential customer is making severe effort to become their biggest competitor.
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4.0 Argument related quality and growth opportunities
In the current context, Lijesen and Behrens (2017) placed its opinion that the Chinese aerospace
and jet making ambitions had not been just a subject of nationwide delight. The nation is
excessively enthusiastic to shift its production value chain methods. Making of its own military
jets has been identified as one thing, however, having the expertise on multifaceted
manufacturing systems to manufacture comparatively huge figures of passenger aircraft that
needs to meet the tremendously far above the ground superiority and dependability values, which
is the sole demand of the intercontinental airlines (Guo and Li, 2017). The superior diversion
would be if China tends to manage this production of its own jets, the lessons would be
implemented across rest of its sectors, which would be relatively challenging for the overseas
business relying heavily on the Chinese customers.
Information gathered from the similar source reflects the fact in the time period of just two years
the Chinese jet market had enabled to construct a stable factory and few steady offices with more
than 50,000 workforces in Shanghai market. After which it had hit the commotion (The
Economist, 2018). The initial aircraft, which is considered as the regional jet was called the
ARJ21, which only managed to enter into the service with Chengdu Airlines in June 2008, which
was relatively eight years following the schedule (The Economist, 2018). And its superior C919
jet that was designed to contend in a straight line with the well-liked Airbus A320 and Boeing
737 family of the small haul models were presently three years following the schedule. Although
the first mock-up was revealed at a glitzy party in Shanghai last November, only a scale model
appeared at Zhuhai. The jet is at the present doubtful to penetrate into the service until 2019 or
2020.
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As per the reports of CNBC, the C919 had managed to secure at least a total of 570 orders from
the Air China and quite a lot of additional Chinese authenticated carriers as well as with the
handful of overseas airlines (Daniels, 2018). The Chinese beforehand claimed of having the
intention of selling additional 2,000 jets or aircraft over the period of two decades after the jet
penetrated into the specified service. This specifically imposes a heavy threat towards the Airbus'
successful production and operation in the Chinese market. The brand is still enabled to run a
steady operation in the market due to its lacking and the shortcoming faced by its own jet
manufactured jet crafts (Hickman and Silva, 2018). Consequently, the Chinse sector is explicitly
expert in the majority of its operations and it very well copes with the areas it lacks behind.
Hence, there can be a high probability for the Chinese jet makers to find every solution of its jet
manufacturing problems and resolve the existing lines and enter into service with high accuracy
(Chow and Tsui, 2017). This would definitely change the mind of Chinese passengers and trigger
them to prefer domestic service over the international ones, no matter how famous it can be.
Therefore, the single market operation for Airbus in China would definitely get into slaughter
(Hyman and McGowan, 2017).
In the year 2017, Airbus had built a completion factor in China with the purpose of mitigating
the rolling demand in the highest rising aviation market across the world. The opening of the
plan came at a point whilst growing traveler statistics were boosting the business. Moreover, it
can be determined through Reuter’s report that China has forecasted to expend more than $1trn
on its aero planes over the period of subsequently two decades (Scarpinelli, 2018). With the
particular estimates development in mind, Airbus has been enhancing its passengers’ footprints
in the Chinese market has the hopes to roll constructive estimations into its commercial orders.
Until the present, Airbus’ existence in the market of China has been restricted to its ultimate
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meeting line in concern to the A320 jets, which has been operating herein since the year 2008 in
Tianjin, in the northern territory of the country (Scarpinelli, 2018). The recent plant of the brand
that is located in the territory of Tianjin, would relatively emphasize on the firm’s A330 model,
which has been considered as a lucrative wide-body jet. However, the demand for the particular
jet has slowed down in the current years along with a growing inclination for other responsive
jets in China. Now, Airbus has forecasted that the demand for airlines’ and large jet planes could
reach a near about sum of 60 to 100 over the period upcoming five years down the line. In this
context, it may be worth to note that the demand of airbus and different airlines primarily may
depend upon the changing tastes and preferences of customers. In the backdrop of changing
landscape of consumers’ demand with surplus money in their hand, the in-flight services have
expanded largely. Moreover, the growth opportunities may lie in the business travel and cargo as
well in terms of bulk transportation for corporate purposes.
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5.0 Conclusion
The previous discussion and analysis as performed in the preceding sections of the paper clearly
exhibits the fact that the researcher has extensively gathered the data relating to the jet makers in
China. The report finally derives the concluding statement stating the rationale that like other
emerging and successful sector, China is also on the verge of establishing its own set
manufacturing service to own the market single and domestically. However, the foreign jet
makers like Airbus rely heavily on the Chinese market. Therefore, despite providing high-quality
assurance service Airbus' operation in China is found frail. Finally, it may be concluded that the
pure competition will significantly contribute towards the growth and development of the airbus
industry not only in China but all over the world.
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