Business Logistics And Supply Chain Management Commerce Essay

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Logistics refers to the management of activities that flow within the process from the actual production/manufacture of the product till the consumption. This flow can refer to goods, resources, information and other resources. Logistics is defined as the planning, implementing and controlling the efficient flow and storage of raw materials, finished goods, and information from the point of origin to the point of consumption.


The term Logistics originated from the ancient Greek term logos. It derives from the military sense, where soldiers would need ammunition, lodgings and the supply of troops and other equipment. In military logistics, logistics officers manage how and when to move resources when needed. Logistics as a business concept evolved around the 1950s. This action was simply because of the complexity of supplying ones supplies and shipping them out (materials) through a globalized supply chain. This was analysed through specialists at that time whom were called 'Supply Chain Logisticians', there purpose was to have the right product, in the right quantity, at the right time, at the right place, with the right price, and in the right condition delivered to the right customer.

Logistics Today

Logistics basically relates to the activates performed in the supply chain from manufacturing transformation of the raw material to the finished product to the consumers. The use of logistics in companies is on the increase. Many companies use logistics as a strategic weapon to create rapid flows of raw material, rapid flows of information and rapid speed of delivery. To consumers speed and delivery are proving to an immense effect than product attributes. Many innovative methods are used to speed up these flows.

Technology has proved to have an immense effect on logistics. New production of technology and at affordable price has enabled companies to implement them in to their systems creating fast and efficient services. The rapid growing industry enables companies to prepare plans and schedules much faster and more frequently enabling sufficient time and in response to respond to volatile markets. The availability of e-commerce technology has made a substantial performance increase which has speeded up many flows.

The understanding of the need for excellent customer service using customer relationship management systems has created accurate information. The increase of the performance enables companies who use the CRM systems to produce, automate and organise many of the processes. Higher sales productivity to the use of personal customization benefits all businesses that use CRM systems.

What is Supply Chain

A supply chain is a network of manufacturers and service providers, together they are responsible for the transport of the products or services from the supplier to the consumers. Every organisation has a supply chain operations function whether it being an internet company or a retail based company.

Inbound and Outbound Logistics

Inbound and outbound logistics is a vital part of the supply chain. One a product is to be produced it must be shipped out to the consumer or destination. The process inside the organisation must find the most effective means to do this whilst satisfying the consumer or customer. Inbound processing covers the inbound delivery that succeeds the procurement process. It includes processing of the actual goods within the warehouse as well as subassembly movements into the factory or warehouse. Outbound processing covers the preparation of the products to be delivered from the warehouse to the destination. Within the warehouse, outbound processing covers the awareness and notification to the customers of the products being ready in the warehouse. Outbound processing then covers to basic loading and off-loading of the product and notifies the customers of any issues, and after delivery once obtained a proof of delivery by a business partner.

What is Supply Chain Management

Supply chain management id the management of business linked together in order to create the final product. A manufacturer would need parts for the product they are making, if they don't produce the part themselves then they would purchase it from a supplier, this straight away is a supply chain as from the production of the product to manufacturer needed parts from other supplier(s) to the final delivery to the customer. Some supply chains can be simple where others can be complex, depending on the final product and the size of the company. A software developing company would not have a complex supply chain than a electronic company because we don't know the size and the final products of the company. Microsoft would not have a complex supply chain than Panasonic. Although Panasonic manufactures televisions it's not assured they produce the components. Where as Microsoft employ software engineers, they wouldn't need the help from other software engineers to produce a piece of software. Panasonic would need the help of other suppliers, who supplies electronic parts as they would not have sufficient resources to create them themselves. Both companies then could have other processes within the supply chain to make them greater or not. Depending on all the processes within the supply chain the determination for the bigger supply chain could be calculated. Both companies would have a globalized supply chain.

To ensure an efficient run of the supply chain, generating a maximum customer base, companies focus on the three activities:




Strategic - this level is mainly focused by strategists who look at the company high level strategic decisions; these would be the size, location of the manufacturing sites, the products they will produce, their business partners and sales markets.

Tactical - tactical decisions are more concentrated on the benefits regarding cost. Purchasing strategies are developed, they evolve around logistics companies to develop cost effective shipping, and develop warehouse strategies to reduce cost for storing the products

Operational - decisions on this level are day to day decisions that affect the how the products travel along the supply chain. The decisions at this level involve making schedules for production, purchasing agreements and taking orders from customers.

Companies who are expecting benefits from the supply chain process must require a level of technology. Large companies are investing heavily in Enterprise Resource Panning suites (ERP) such as Oracle and the most popular SAP.

EU as a Single Market

The Single market is the EU project of trade to create and mould Europe as a single economy. It is one of the significant symbols of integration within the Europe. The Single market consists of 27 members (2005). The Euro when introduced was to signify the link of all the countries within the Europe, although United Kingdom did not join due to the power of the pound it still is integrated within the single market. The agreement allows the movement of goods, services, people and capital among the EU.

How does it work?

A single market can define any area where people are free to trade, invest and seeking employment without any legal obligations or technical and physical barriers. The single market allows the economics of scales, discovering a wider commerce across Europe enabling faster growth by setting some rules to follow across Europe. A recent example of this was mobile phone tariff; a single tariff was introduced when abroad in the EU. A phone call would cost 37p, receiving a phone call would cost 17p, sending a text message would cost 10p; this was applied to all of Europe by the EU commission. The EU commission has authority of most economic areas where they are passed down to the government and their directives. Among the Countries in the world the EU has largest GDP of economy, both Gross domestic product (nominal) and Gross domestic product (purchase power parity). The European commission estimates that 2.5 million jobs had been created since 1993, an extra €800 billion in wealth and over 15 million people travel to another EU state to either work or retire.

Benefits of a single European market

There are many benefits for a single market in the EU, benefits concerning consumers, companies and the governments. These are:

Currency exchange cost would be eliminated

Increased trade and reduced cost to companies

Uncertainty cause by the exchange rates variation eliminated

Price transparency

Rivalry against the 'Big Two'

Prevent war

Single currency in a single market makes more sense

Currency exchange cost would be eliminated - Figures showed a company would spend roughly £1 million a year buying and selling foreign currency to do business in the EU. This cost would be eliminated as all the currencies would be the same.

Increased trade and reduced cost to companies - Many argue regarding the move states that the move could bring considerable economic growth and trade as well as reduction in costs to the companies venturing business as companies would not have to buy external currency having paying for foreign exchange rates. The EU represents a completion of a single market, trade could help compete with other large traders if the Far East and Northern America.

Uncertainty cause by the exchange rates variation eliminated - many companies would avoid when investing in other countries simply to do with the fact of currency fluctuation rate. This will be eliminated due to the currency being universal where the trade would take place in the EU.

Price transparency - Consumers often find it difficult to compare prices of goods, services and resources across the EU simply because of the effects of currency rate differences. This also discourages international trade among the EU companies.

Rivalry against the 'Big Two' - in the world today American dollar and Japanese YEN hold a strong currency. Both countries have a strong economy with greater inhabitants. A newly found union and new currency (Euro) would be an equal competitive rival to the 'Big Two'. Although the fact that the Euro is considerably strong today.

Prevent war - The single market is a political project, it's introduced for the European integration. A known fact is that countries that trade effectively together would not wage war against each other. This could also affect the currency.

Single currency in a single market makes more sense - Trade should be more effective and efficient with the Euro. Single currency used in a single market makes more sense and could prove beneficial to all.

Problems of a single European market

There are a few recognised problems that are the intention of maintaining by companies, companies are always aware of these. These are:

Instability of the system

Over estimation of trade benefits

Loss of sovereignty

Instability of the system - in the 1980s the UK refused to join the exchange rate mechanism. UK argued that it would be impossible to maintain exchange rate stability within the exchange rate mechanism, when the pound was a petro-currency and the UK inflation rate was above Germany. When the UK joined the exchange rate mechanism in the 1990s there had been stability for three years and looked as if the system had become robust. When the UK and Italy were forced out of it in 1992, the system showed to be much less robust than had been thought

Over estimation of trade benefits - a number of economists argued that the trade and costs advantage of the EMU had been over estimated. There is little to gain from the present system which had some stability built in to it.

Loss of sovereignty - it is argued that some central banks are undemocratic. Governments should control the banks as they are the ones elected by the people where as a bank would be controlled by a non elected body. There would be a considerable loss of sovereignty. Power could be transferred from other states like Paris to London; this would be highly disagreeable as national governments would lose the ability to control.

European logistics and supply chain

Achieving the 1993 objective

The treaty made in 1957 establishing the EEC made it possible to abolish customs barriers within the member states and establish another customs tariff to be applied to goods from non EEC countries. In the 1970s, other trade barriers weighed down the complete achievement. National regulations, health and safety standards were obliged enable a free trade for people goods and capital. In 1985 the commission published a letter seeking to eliminate physical, technical and tax related barriers within seven years (within the community). This action was to stimulate the industrial and commercial market trying to achieve the economic scale of America's market.

The Market Today

Physical Barriers

Border controls within the EU on goods have been abolished, as well as customs patrol regarding people. Checks are in place by the police in order to combat drugs and any actions against the laws. For any person with a citizenship in the EU who want to reside in asylum or immigration has made it possible, this area falls under the police a swell as long as the person is within the EU border.

Technical Barriers

The products manufactured in other EU states must comply with the rules and regulations of the intended destination of the product (mutual recognition of National rules and regulations must be followed in order for the product to appear in the market). Any product manufactured legally must be allowed to be sold in the market. Qualifications are to be recognised in other states of the EU; this means that a diploma or a degree must be taken into consideration even though it is not originated from the state the person is applying for a job as long as it is obtained in the EU Country it should be recognised.

Tax Barriers

Tax barriers have been reduced through the consideration of national VAT rates. Any product that is to be sold again would need to comply with the tax rules and regulations in order for them to see the product in the market. This is to outline the tax is different in all of the EU states, so if any product is to be sold within them states their national tax (VAT for UK) must be applied once in states border.

Integration within Europe

Companies whose intent is to have a bigger customer base can achieve this by integrating supply chains with the EU. This integration can bring more suppliers offering cheaper supplies than current. As the demand for supplies rise more and more business venture in this area hence creating power for supplies which could lead to the reduction of demand. Each supplier would have alternative prices to beat each other, so if a company integrates supply chains then this could give them competitive advantage as they would receive the product cheaper and could sell it on cheaper. Companies would have larger trading grounds enabling them to achieve maximum output and turnover.

Various cost reduction strategies have been considered and are used; rationalizing of manufacturing into fewer plants have enabled companies to have a bigger output at lower costs. Logistics that are now enabled benefits all and the supply chain is organised as a European level rather than a national level. The integration enables companies to reduce holding cost. The principle of reducing costs applies to the purchase of raw materials from a wider cheaper base and transportation of goods. Many manufactures and retailer are now taking the opportunity provided from the removal of barriers to cross borders for the movement of goods. New companies are starting off with the Single market taking the opportunity to enhance at level which previously was not allowed. As this happens the EU market grows and the benefits can be tremendous, with a growing economy states within the EU could also have an impact of growth.

International Business Theory's

Theories in businesses have a major role, from the initiation of a new business to the potential liquidation theories and models are always observed and followed. Proven theories and models if not used could lead a company to failure. There are many theorist who have observed the business world before creating their theory's many companies of whom have used them have had greater impacts than others who haven't. As the integration continues (EU) many companies would refer to theories making sure they are heading in to the right directions, simply because the role has increased as they have benefited from a larger customer base, many more supplies, changes in their supply chain, change in their supply change management, and change in their logistics as well as products and services

Current Theory's & Models

From the various theories' out there that are successful the author wants to select a few that applies to the case study which later will be analysed against a chosen company. Theories that apply are:

Porter's Generic Competitive advantage model

Vernon's Life cycle model

Porter's Value Chain

PESTLE Analysis

Porter's Generic Competitive advantage model - a company's position within its industry determines whether the company's profitability is above average or below average. The fundamental of above average in the long run is considered sustainable competitive advantage. There are two basic type's competitive advantages a company can achieve; these are low cost or differentiation. The two basic types of competitive advantage combines with the activities for which a accompany wants to achieve, lead to the three Generic Strategies for achieving optimal performance in the industry, these are:

Cost Leadership



The Focus strategy has two variants; these are:

Cost Focus

Differentiation Focus

Cost leadership - a company sets out to become low cost producer in the industry, there are many sources for cost advantage which depend on the structure of the industry. These can include the pursuit of economies of scale, unique technology and access to raw materials as well as other factors. A low cost producer must discover, access and exploit all sources of cost advantage. If the company can gain cost leadership then they would perform above average in its industry but it must adhere prices according to the industry.

Differentiation - in differentiation a company aims to be unique in the industry and have certain dimensions that are valued by customers. It identifies certain attributes that customers in the industry perceive and those that are important to them; it then uniquely positions itself to achieve them needs in order to gain competitive advantage.

Focus - the strategy of focus represent the narrow scope within the industry. A segment is selected within the industry then it tailors its strategy to serving them the exclusion to others. In Cost Focus a company finds a cost advantage in its selected segment. In Differentiation Focus a company seeks differentiation within its target. The target should have buyers with different needs or a production and delivery system that best serves target but it must differ from other industries. Cost Focus finds differences in cost behaviour while Differentiation Focus finds the special needs of buyers.

Vernon's Life Cycle - a product has four stages which refer to the life cycle, these are:





Introduction - this is where the initiation begins, the new product introduced to the customers, these then at the same time are exported to other countries, so simply the product is widely shown to potentially all customers in the segment.

Growth - this stage refers to the copy of another similar product introduced earlier which is then introduced to the home country where the original product was made as well as other countries. The product would be an alternative or it would be with similar aspects but at a reduced cost. This stage is where the product actually grows with the customers.

Maturity - at this stage the product has reached its peak, from here it can either go up or down, if it goes down then it's classed as maturity, if it goes up then the product is still growing. Referring to this stage many clones have been introduced at an even lower cost.

Decline - from here the product declines in sales, customer s would choose alternatives. An example would be first generation Apple Nano's, as the company had adopted what consumers wanted and what's in the market they still represent the market, if newer generations of Nano's were not introduced then that would be it for the product it had reached maturity and would be in decline.

Porters Value chain - is a concept for business management but can be applied to various other segments. The value chain is a chain of activities for a company operating in an industry. The initial idea is that the product produced would go through all the activities in all the stages. Below is the concept of the value chain model. The model refers to the different segments in the business where the product would gain value at each stage

Figure 1 showing M. Porters Value Chain Model

Inbound logistics - refers to the receiving, storing, transportation.

Operations - refers to the actual operation of machining, packaging, assembly, maintenance testing, basically anything that has an input to create the final product.

Outbound logistics - refers to the product being developed till it's finished and to get it to the customers, these duties include warehousing, transportation and distribution.

Marketing and sales - refers to getting buyers to purchase the final product, advertising, pricing, selling and retail management.

Service - refers to the after sales service which can include installation, customer support, repair, supplement of spare parts.

Procurement - refers to obtain raw materials, spare parts, building, and machines.

Technology Development - refers to the development of technology to support the value chain such as research and development, design, automation of a process.

Human Resource Management -refers to the activities associated with recruiting, training, maintenance of payrolls.

Firm Infrastructure - refers to the general management, legal, finance accounting, quality management and public affairs

PESTLE analysis stands for Political, Economic, Social, Technological, Legal and Environmental. PESTLE analysis describes a framework for macro-environmental factors which is used in strategic management. PESTLE analysis is applied to various situations especially when there are a lot of fields to concentrate on, each factor of PESTLE analysis represents each domain in which a company could be paying special care to, this enable the company to get an accurate conclusion without the need for further analysis if the domain is correct. As each factor represents a different domain, clear understanding of the factors is essential. For example consumers and business to business companies tend to be more affected by the social trends while a global defence contractor is more likely to be affected by political factors. Companies who have borrowed capital heavily would need to focus on economical factors like interest rates. Each factor is differently applicable to each company.

Political - factors are when times are critical enough for the government to intervene. These could have anything to do with the economy. Areas that fall under this are tax policy, law, environmental law, trade restrictions and political stability.

Economic - factors include the economic growth, interest rates, exchange rates and inflation. These factors have major impacts on the businesses and how they operate along with decision makings. An example could be the exchange rates affect the business if they are exporting goods.

Social - factors cover to cultural aspect including health, population growth, safety, age distribution and career attributes. Trends in demand factor help company's develop by understanding needs of customers. Companies may also change strategies to imply with social trends. Apple products are currently a trend, although the technology is out there from various manufacturers and brand, consumers prefer to choose Apple products like the Apple Nano or an iTouch regardless of price.

Technological - factors include ecological and environmental aspects; these could be automation of processes, the technological change rate and the research and development. Technological shifts can cost a company a lot as well as increase quality and could sometimes lead to innovation (e.g. Rubik's Cube, Dyson).

Legal - factors include consumer laws, discrimination laws, health and safety law and employment law. These are to be considered to and followed in order for the company to stay in good shape, they can also affect how a company operates, costs, and possibly the demand.

Airbus Case Study

Airbus is one of the world's leading aircraft manufacturers. It has a successful 40 years of serving customers by providing aircraft, not just for commercial purpose but for the military. Innovation and technology has made it possible for airbus to lead further with newer enhanced technologies leading to innovation built in to flights not only for comfort abut for safety as well.

Airbus initially started in the 1970; it currently holds eighteen aircrafts from which 6 have been ceased. Airbus employs around 57,000 people (Airbus, 2010) at sixteen different sites in four European Union Countries which are; United Kingdom, Germany, France and Spain. Airbuses main competitor is Boeing, boring and airbus have been in competition since the early 1990's, this competition has led to great discovery; different aircrafts are built by the two manufactures. Whilst one tries to beat the other one with a bigger plane and more comforting to the other comes back in to the game with another better plane. (Airbus, 2010)

Airbuses biggest project was the airbus A380; initially Boeing had a similar idea but was scrapped due to insufficient resources. The A380 is the biggest commercial airline manufactured, although other planes have been made to the similar size they were for cargo and not for passengers. The A380 has various shops as well as casino, double deck throughout the plane, duty free shops, restaurants, beds for first class and business (depending on airline Economy as well) class. The initial idea of creating an airliner the size never imagined began around 1990; in 1993 Boeing cancelled a similar project. From the 1990's the technologies that were going to take place needed to be identified and created if it weren't available, airbus designated four teams to do this, to develop the technology. The design phase begun in 2000, this was where the idea started rolling; in 2002 the aircraft was in manufacturing. Due to delays in manufacturing the maiden flight could not be scheduled for the initial date in 2004, so airbus announced a new date which was in 2005. Whilst in manufacture John Leahy, (Airbus, 2010) the chief operating officer started getting clients for the biggest airliner. He had successfully fixed eleven clients to order 138, A380 but due to delays majority of the airliners pulled out leaving airbus to see their shares plummeting. Airliners that waited for the delivery were Singapore Airlines, and Qantas. Although airliners pulled out then recently they had purchased the A380. The components and parts for the airbus came from various palaces in the EU. (Airbus, 2010)

The four engines were built by Rolls Royce in Wales in the United Kingdom, the cockpit and components for the fuselage were manufactured in France, the Spanish were responsible for the stabilizers, the wings were also manufactured in the United Kingdom. The fuselage, electronic components and assembly of the wings, and cabin systems were done by Germany. The final assembly of the Airbus A380 was in Toulouse, France. Already airbus has a wider supply chain, from various parts in the EU.

Porter's Generic Competitive advantage model

Based on the research conducted and the literature reviewed, Airbus seems to be differentiation. This solely is to do with competition. Both airline manufactures Airbus and Boeing have great competition, where one tries to beat other. This competition has given them both the competitive advantage, the only opportunity left is to see who builds it first.

Initially both manufactures had research on the idea, in 1993 Boeing pulled out due to the lack of resources but Airbus still carried on. If Boeing were to build a plane like the A380 then this would be fair competition. Airbus seems to be differentiated, the airlines manufactured have always been bigger and more powerful, not that the airplane needs to be.

Vernon's Life Cycle Model

The life cycle applies to the majority of items produced by a manufacturer. Airlines tend to have a bigger or a longer life cycle due to the complexity and the knowledge and technology not being available to everyone. Airbus has eighteen aircrafts in their portfolio, from them eighteen 4 have been ceased and stopped being manufactured. The reason for this is all for airlines were built in the 1980's and one in the 1990's. The actual reason could be anything from the parts being expensive, limited or maybe no customers to purchase.

Manufacturing could also be expensive. Currently the a380 is on the growth, as no one else is providing an airline to the sheer capacity and size it won't get affected. When a newer airline comes out with the same or bigger capacity then possibly it could lead the A380 into maturity and then possibly decline stage. The issue with airlines is that they have a bigger life to begin with, from the full portfolio of all manufactures airlines are not built every year or so, it takes roughly 5-10 years including planning minimum, so the life intends to be longer. As an imitation of an airline is not easy to copy the growth would not hit maturity till 10 years minimum of it being manufactured.

Porters Value chain

The operations of the company are very wide. To create an airline it all starts off in France then leads on to somewhere else, Germany normally is the next stage. Components are created from different places then imported to France, from there they go to places that will fix them or need them in order to carry their task out. For example the stabilizers are made in Spain then transported to Germany where they currently would be installing the fuselage, after they finish that they would then install the stabilizers while France is getting a delivery of the landing gear or the engine which are both manufactured in the UK. All final assemblies are made in France where they install all components exported from the different parts of the EU. Transportation of parts is done through various vehicles, cargo airlines is the most used (Airbus, 2010) to transport different part of the plane, then land and then the sea. As there are limited aircraft suppliers the marketing and sales strategies or to combat their leading competitor or really their only competitors. Each plane is unique in its own way; the only aspect that can be copied is the way it looks and the size. Forming strategies could only apply when relating it to the sales; this will be based on the characteristics as customers will not have a wide option of manufacturers who supply airplanes. Airbus is doing a lot for technology and development; they have various sites globally where engineers look new technologies, recently airbus opened a site in Bangalore, India, where they employ around 200 engineers for newer technological developments, for better safety and comfort. (Airbus, 2010)


As Airbus would have a huge hand in the economy based on the turnover, it would seem that if the company was declining or in trouble the government or the EU commission who would have political influence would step in to help them solely to do with keeping the economy healthy. The concept for creating the A380 was that more customers can board the flight keeping in mind the population growth. The strategy put forward when selling an A380 to Kingfisher was that "millions of commuters travel through trains everyday to work, imagine if they could board the flight at a cheaper prices similar to trains" (John Leahy 2005 Airbus), creating the airline was to offer a cheaper price to customers as the airline can board nearly the triple amount compared to kingfishers current A318's. The technology factors have heavily used when creating the components but when compiling all the components, it's all done manually due to the delicacy of the project. Strict legal procedures are to be followed; health and safety laws would be priority number one as millions of commuter would be using the plane.

Airbus's current Supply Chain

In 2008 Airbus has selected lead logistics and transport providers. Kuehne+Nagel are going to represent airbus as lead logistics and DHL will be their lead transport provider becoming tier 1. The step was considered for integration of Airbus to allow "harmonization and optimisation" (Airbus, 2008) of Airbus's logistics and transport relating to the EU. The integration would lead to substantial cost cutting savings in 10's millions of Euro. The new logistics concept brings together the warehouses operation in the EU states; Germany, France, Spain and the United Kingdom. These will be fully managed by Kuehne+Nagel.

DHL are to implement a full transportation management system to view the status of moving material from the manufacturing plants. This plan goes will with the single market. Airbus had implemented with the single market, all moves are considered to have a better integration and rationalizing plants for better tracking for transportation. "The optimization of our supply chain & logistics by defining one lead logistics provider and one lead transport provider is an essential step towards to increasing our efficiency and delivering on our Power8 targets", said Fabrice Bregier, Airbus Chief Operating Officer. "This new way of working will greatly contribute to securing our global competitiveness" (Airbus, 2008).

In 2005 Airbus had reduced their supply chain for spare parts. This was because the part supplier Mexmil, Company of Santa Ana had signed an agreement saying they will provide the full Airbus service spare parts and related products. This was the first time an Airbus supplier wanted full responsibility for the complete supply chain of the Airbus parts. As being innovative this step would have simplified the logistics process of supplying the spare parts to operator of the Airbus. As due to the now regulations, it was mentioned that thermal blankets had to adhere strictly to the regulations, for which now Mexmil will have to require.

In 2009 Airbus had successfully implemented RFID technology; they had received the "best RFID implementation" award. The technology exists in the catering department; the whole purpose was to ensure the awareness of the meals for each flight, so by tracking they know correctly what's where and where it should go. Cost effective catering logistics has become a competitive advantage, which could improve effectives of the entire process chain from the catering manufacturer to the passengers. This ensures accuracy as by labelling and monitoring goods that moved around airports will be monitored to prevent any loss. (Airbus 2009)

Future Supply chain

Airbus has teamed up with Qatar National entities for bio-fuels. In January 2010 Airbus had teamed up with Qatar Science and Technology Park and Qatar petroleum to develop produce and supply secondary generation's bio fuel for use in aviation. This step led to the Environmental factors for PESTLE analysis. The Airbus aircrafts would fly on bio-fuels would tremendously help the aviation industry as well as the environment globally. The project would be expanded in the future to allow further projects, technologies, investments and partnerships (Airbus 2010). Airbus believes in progression to the reports conducted and by forecasting that by 2030 over 30% of jets would use bio-fuels. Qatar Airways who have 150 Airbus aircrafts on order and in service will be the dedicated user for the bio-fuel project. (Airbus 2010)

Rules and Regulations