Logistics solutions for theglobal aerospace industryAerospace is a fascinating and many-faceted key international industry. As one of the world’s three biggest airfreight forwarders, Kuehne + Nagel depends on smoothly operating freight and passenger airlines all round the globe. At the same time the aerospace industry is an important customer for the logistics provider, on whose tailor-made service solutions more and more airlines and their suppliers rely.

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Over the past fifteen years Kuehne +Nagel has developed a range of specialservices to meet the specific needs ofinternational airlines. In this field too,the company has now achieved its goalof becoming one of the first choices ofan exacting clientele – a fact which ishighlighted by the receipt of a numberof awards such as the German LogisticsPrize 2005 for Kuehne + Nagel’s inno-vative, integrated logistics concept forthis industry. However, Kuehne + Nagelis not resting on its laurels but is con-tinuously developing this industry solu-tion, which is marketed under the slogan Supply the Sky, into comprehen-sive service concepts.

The aerospace industry, which besidescivil and defence aircraft and helicop-ter manufacturers, includes airlines andservice companies specialising in main-tenance, repair, overhaul, ground han-dling and inflight services, has growndynamically in the last few years but isstill challenged by a number of fast-moving change processes. Passengerservice level requirements are increas-ing and next generation aircraft arecoming onto the market, driving newmanufacturing technologies and logis-tics needs. The aircraft manufacturersare also optimising their value chainsthrough cost-effective relocation of pro-duction. In addition, environmental fac-tors must also be taken into considera-tion for production. As a result, theimportance of smoothly functioninglogistics is constantly increasing in thisindustry, too.

Kuehne + Nagel’s offering in aviationlogistics meets the needs of this dynam-ically developing industry with anextensive portfolio of specific services.These can be individually selected bythe customer, but are generally sup-plied as an integrated, complete solu-tion. In this connection Kuehne + Nageldivides its services into a number of dif-ferent segments.

All services connected with civil anddefence aircraft and helicopter produc-tion are grouped into the productionlogistics domain, focusing on the needsof big international airframe manufac-turers such as Airbus (see article onpage 17). From traditional warehouselogistics to comprehensive solutions forcomplete production processes, fromthe delivery of a single fastener to thehandling of complete aircraft sections,from order management to pre-produc-tion services such as sealant mixing,Kuehne + Nagel provides a diverserange of services to meet individualrequirements.

Kuehne + Nagel offers comprehensivesupplier management services bet -ween suppliers and airframe manufac-turers as well as between the latter andtheir customers. These cover the com-plete production chain from basicequipment to the meeting of cus-tomers’ individual wishes with regardto interior fitting.

Even after the completion and deliveryof an aircraft, there are many servicesthat need to be provided by a logisticscompany. Kuehne + Nagel’s inflightservices, which cover the supply of air-liners with inflight materials, haveenjoyed growing demand for a numberof years. The company cooperates verysuccessfully with LSG Sky Chefs, thecatering group of Lufthansa whose200 facilities in 51 countries annuallysupply around 405 million passengermeals to more than 300 airlines allover the world. Through the joint ven-ture Skylogistix, the two partners bringinnovation into the inflight servicesupply chain through their state-of-the-art systems, dedicated expertise andglobal presence. The result is a globalinflight logistics platform which helpsto minimise cost while at the sametime guaranteeing first-class servicequality.

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Supply the Sky: Logistics solutions for the

entire life cycle of an aircraft.

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In the spares & repairs logistics seg-ment, Kuehne + Nagel’s modern inven-tory management and tracking andtracing systems provide the airlines andtheir maintenance firms with completetransparency throughout the spareparts supply chain. This allows the effi-cient planning and management ofrepair cycles and inventory levels.

Despite the highest safety standards,modern fleets and regular mainte-nance, technical faults still occur whichcan ground an aircraft for days. In theevent of such a grounding, which canresult in high costs for the airline, rapidincident management is needed. Forsuch situations Kuehne + Nagel has ateam of experts ready who often get towork even before the defective aircraft

touches the ground. This service helpsairlines to focus on the repair of the air-craft (and transferring passengers toother flights if necessary), whileKuehne + Nagel takes responsibility forthe rapid ordering, worldwide transportand customs clearance of the requiredspare parts and tools.

The heavy aircraft engines present a spe-cial challenge for forwarding and logis-tics. Under the name engine logisticsKuehne + Nagel offers the manufactur-ers and maintenance firms a relativelynew package that provides an integrat-ed solution for this exacting task. Com-petence teams of specially trained pro-fessionals provide support and experthandling, as well as extensive knowl-edge and expertise. Via Kuehne +

Nagel’s global network, they deliver theintricate and time critical aero engineson time to any place in the world.

The Supply the Sky concept, which cov-ers virtually the whole life cycle of anaircraft, is a good example of the inte-grated approach with which Kuehne +Nagel analyses in depth the specificlogistics requirements and structuralcharacteristics of a whole branch ofindustry and incorporates its findingsinto an efficient industry solution thatundergoes constant further develop-ment. The company’s rapid climb in thefield of aviation logistics is impressivelydocumented by the growing number ofcustomers who decide to use the inte-grated services of Kuehne + Nagelacross the entire value chain.

© AIRBUS S.A.S. 2007

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Kuehne + Nagel has already served Air-bus for a number of years as the logisticsprovider at the aircraft manufacturer’splants at Hamburg and Bremen in Ger-many and Getafe in Spain. On the basisof this experience, following a compre-hensive tendering process in 2008, itwon the service contract for this cus-tomer’s entire production logistics. Sincethen Kuehne + Nagel has entered into astrategic partnership with Airbus, and asLead Logistics Provider (LLP) it is respon-sible for all production logistics at thelocations in Germany (Bremen, Hamburgand Stade), France (Toulouse, St. Eloi,Nantes and Saint Nazaire), Spain(Getafe, Illescas, Puerto Real, Cadiz andSeville) and the United Kingdom(Broughton). A further logistics locationis currently being established in China(Tianjin).

As part of a global cost optimisationprogramme, Airbus already decided in2007 to radically transform its logisticsmanagement, and in Kuehne + Nagel itfound an ideal partner for this ambi-tious project. The aim was and is to har-monise production logistics in all loca-tions and to amalgamate the manysmall warehouse facilities into sixregional logistics hubs. Processes, sys-tems and code numbers are being uni-

fied in accordance with the best prac-tice principle. For the past two years Air-bus and Kuehne + Nagel have workedclosely together on the implementationof this programme. The two companieshave each established central organisa-tion units in Toulouse to manage imple-mentation projects and day-to-day oper-ations across all locations.

As a strategic partner of Airbus, Kuehne +Nagel plays a significant role in thetransformation of the logistics manage-ment and is directly involved in the con-tinuous improvement of the processes.The company is playing a leading rolein the development and implementa-tion of the new logistics concept for theAirbus A350 XWB, which presents com-pletely new challenges to productionlogistics as a result of its innovativematerials and production processes.Under the direction of the central “Con-trol Tower” of Kuehne + Nagel inToulouse, a team of specialists is nowworking jointly with local experts tocreate a tailor-made supply concept foreach location. These concepts arealigned to the special requirements ofthe A350 XWB production, and adaptthe largely standardised processes andequipment to the specific needs of eachlocation.

On the basis of the strategic partner-ship created by the LLP contract, since2008 the volume of business has under-gone a big expansion as a result oforganic growth (additional services atexisting locations) and new productionplants and work packages. The Stadelocation and many new direct produc-tion supply functions in the Hamburgfactory were added in 2010. Since July2010, Kuehne + Nagel has also beenresponsible for all Airbus Military pro-duction logistics at locations in Spain,Portugal and Australia.

Kuehne + Nagel sees further substan-tial growth potentials in the expansionof the service spectrum at existing Air-bus locations and in customer-specificadded-value activities. The extension ofthe successful LLP concept to otherEADS companies is a part of the medi-um-term strategy of the Airbus parentcompany. For Kuehne + Nagel the exist-ing contract with this important cus-tomer not only generates growth oppor-tunities within Airbus and EADS, but isa milestone project which promotes thefurther development of the aviationlogistics business field and other indus-try-specific logistics solutions.

Worldwide production logistics for AirbusIn 2010 Airbus built around 500 aircraft in its factories in Hamburg, Toulouse and Tianjin – more than ever before in the history of this leading aircraft manufacturer. Kuehne + Nagel handles the delivery of production suppliesto the component and final assembly plants, and since July 2010 has also been responsible for the production logistics of Airbus Military.

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