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Outsourcing is a global phenomenon enjoying huge percentage increases year-on-year. For many companies the major considerations are economic ones - reducing costs and increasing margins - so the relationships with suppliers often do not progress much beyond squeezing more cost reductions and demanding increasingly tight performance targets. So it is refreshing to find an organisation that takes a very different approach to outsourcing, and considers the relationship with suppliers to be key to its success.
The organisation is Airbus UK, which designs and manufactures wings for all Airbus aircraft; and particularly its Filton base near Bristol.
Here wing trailing edges and other components are manufactured, advanced manufacturing processes produce complete wing ribs from huge billets of aluminium, and other components are machined from titanium and stainless steel.
When, in 2004, Airbus UK took the decision to outsource Filton's lubrication management to Castrol, innovation and technical expertise were considered to be as important as cost savings.
Besides providing professional management in an area that is not a key strength for the business, Castrol is also providing technical support and innovation on both current operations and future projects, and releasing Airbus resources to devote more time to core competencies.
Castrol provides a wide range of services at Filton, from total management of all metalworking fluids and lubricants in the site's Integrated Machining Facility (IMF), to vibrations analysis, filtration management and parts washer management.
It also encompasses water treatment and maintenance contracts for specialised support equipment in areas such as rig assembly, IMF, manufacturing assembly, test facilities and the tool room.
Airbus recognized that managing and coordinating the four main service contracts would tie up considerable internal resources and still not provide the level of skills and experience needed to deliver best practice in each discipline.
The outsourcing contract, which is site wide and includes the management of an extended supplier base, is an extension to a partnership that has existed since Castrol's appointment in 2001 to manage metalworking fluids in the IMF.
The company subsequently recommended a number of improvements that had a positive impact on environmental, efficiency and cost reduction aspects of the IMF operation.
For example, the change to a Castrol cutting fluid not only reduced the volume of coolant used and downtime for machine cleaning, it also helped Airbus avoid a substantial additional cost for roof ventilation to extract coolant mist, which had been a problem with the previous supplier's metalworking fluid.
Daily checks are part of the total fluid management (TFM) discipline, and to support this vital service, Castrol has installed an on-site laboratory to monitor coolant concentrations, check pH levels, bacteria, fungus, biocides, insolubles, etc Commenting on the advantages of managing a number of different supply contracts through a single lubrication partner, Airbus UK's technical services manager at Filton, Nigel Kirkland says: 'Not only do we benefit from Castrol's global lubrication experience; we also gain similar benefits from the other suppliers that Castrol manages.
It means we get the 'best of all worlds'.' Two significant projects that are currently being evaluated have demonstrated the value of outsourcing during the contract's first year.
The first aims to maintain the integrity of components as they move between the various manufacturing processes, and the second is to validate a fully synthetic cutting fluid for the IMF.
In the first, large components such as wing ribs and a wide variety of smaller detailed parts are protected during processing and storage either by a non-reusable material that has to be removed and scrapped at each stage, or by preservatives that need to be applied and removed.
Most components are wrapped and unwrapped and dipped and cleaned several times during their journey round the site, and whilst protection is essential, the existing methods are both costly and wasteful.
Following a proposal by Castrol, a Joint Project Team is now evaluating an advanced re-usable anti-corrosion system that will help to reduce scrap and rework.
It also eliminates the cost of purchasing and disposing of consumables in addition to the time taken to apply and remove them.
Explained Castrol contract manager Tim Griffith: 'After washing and crack detection, components that have incurred substantial process costs are vulnerable to corrosion from atmospheric conditions.
The new system has the potential to achieve substantial cost and environmental savings at Filton, and perhaps farther afield.' He went on to explain that the second project to validate a fully synthetic cutting fluid recommended by Castrol, also has the potential to reduce cost and deliver environmental benefits for Airbus.
But first, like all products used in the aerospace industry, it needs to undergo a strict testing regime in order to obtain authorisation.
Currently, Castrol is working with Airbus UK and the University of the West of England, which has the facility to validate the synthetic technology.
The Airbus approach to outsourcing acknowledges that certain activities, for example machine maintenance, are critical to manufacturing and the company therefore needs to retain that knowledge in-house rather than relying on third parties.
However, tasks such as the day-to-day management of lubricants, which Airbus could do but chooses not to, are trusted to carefully selected partners that can bring value into the business.
For example, the company is pushing the boundaries of materials technology with many of the components it manufactures, so it is essential that Castrol is equally advanced in its area of expertise.
Castrol was chosen to coordinate lubrication services because it has expertise and technology that does not exist within Airbus.
Castrol's global best practice in lubrication and fluid management is therefore able to help take highly technical processes into the future.
The relationship is adding real value to manufacturing and releasing highly skilled Airbus people to bring greater benefit to the business.
The partnership between Airbus and Castrol demonstrates that outsourcing can be extremely successful, provided companies choose partners that bring innovation and technology with them to reduce cost.
The key is in seeing new opportunities and working together to imbed them into the business.
It is certainly not about doing the same job for less.
Mentioning money for the first time, Nigel Kirkland says that accountability across all the disciplines managed by Castrol has had a major impact on cost savings.
Griffith echoes this view, adding that Castrol's targets for monetary and environmental savings, and improvements to existing and new processes, are reflected in its contracts with all the other companies in the supply chain.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| 02J05 bearing | 7.06 | 13.97 | 2.38 |
| 01N06 bearing | 4.87 | 10.98 | 1.58 |