Call for tenders: the Airbus method applied to brokerage

Rodolphe Strauss
January 12, 2023

In the world of brokerage, tender management requires a careful methodology to identify the best solutions, control costs and avoid endless decision-making cycles. True to its desire to provide you with as much information as possible for your activity, Spotlight is committed to the search for the champions of the Major Calls for Tenders in History. On the agenda today: The Airbus case

First of all, why Airbus? Because the aeronautics leader has simply built itself on the basis of calls for tenders. With no less than 80% of its business entrusted to external suppliers, the pan-European leader has successfully implemented its "Make-or-Buy" strategy to focus on its core business and unlock new growth drivers.

Let's take a concrete example: the A321XLR. Operating its inaugural flight on 15 June, this revolutionary aircraft required the collaboration of no less than 8 production sites spread across 4 European countries. To carry out the project, Airbus was fortunately able to rely on no fewer than 12,000 external suppliers responding to calls for tenders ranging from €1,000 to hundreds of millions of euros.

In order to understand how it works and to obtain best practices in the brokerage world, we interviewed a head of the Airbus group.

Hiring technical project managers

While internally developing its own "home-made" technical solutions was enough a few years ago to solve most of the problems encountered (sometimes light years away from its core business), times have changed. 

Because the probability that a specific need has already been addressed by a company that devotes all its human and financial resources to it is high, the current market trend is to hyper-specialise. As a result, corporates have naturally opened up to new solutions, some of them, such as Open Banking services, acting as outright aggregators.

However, although for most companies the search for an external solution has recently become commonplace for Airbus, this has been the norm for 50 years. 

As true "technological pathfinders", the project managers of the European aircraft manufacturer have a responsibility to monitor closely and to know the latest innovations available on the market in order to provide the company with state-of-the-art, open and compatible solutions.

Keeping up-to-date with the latest insurance innovations can be time-consuming and difficult during busy weeks. Spotlight recommends, however, 2 newsletters with particularly comprehensive market views: Eficiens (for the French market) and Insurtech Insights (for international markets).

However, knowledge is no longer enough! What is required now is active involvement. Like many entrepreneurs, today's project managers must be able to support informed technical discussions with business line experts.

At Airbus, the project managers are real consultants able to help specify needs, sourcing the best solutions (including from the most innovative start-ups), and their integration into sometimes complex organisational processes.

This is reflected in the brokerage sector by hiring profiles with hybrid expertise; or even by a "Business Area Managers" division as set up by Pascal Wronksi (CIO of Verspieren) during his visit to Saint-Maclou.

As cross-disciplinary coordinators, the project managers adopt a cross-divisional approach in order to list the requirements of each stakeholder, to compare them and to carry out the right arbitration.

The quality of communication plays a key role in ensuring that the project's stakeholders are driven by the same sense of building together, whether internal or external to the company. This holistic approach, implemented according to best practice, brings enormous value to the company.

Establishing target scales to improve efficiency

If the right procedures are not put in place, the deadlines of a call for tenders can quickly overrun and its result may deviate from the interest of the end customer due to economic reasons or political considerations.

In order to never lose sight of the target and do not deviate from the customer's expectations, setting up an unbiased assessment system is essential.

At Airbus, any employee can request a purchase process from standard documents, customised by product or service. The evaluation criteria are then set beforehand and definitively by all stakeholders.

This scale is then communicated to the candidates. In order to avoid skewing the functional analysis, the commercial recommendation of the purchasing department only occurs after the technical verdict intended to validate the suitability of the proposed solution and customer needs. 

As in the world of brokerage, calls for tenders sometimes have several selection rounds to adjust as closely as possible to requirements and fine-tune economic conditions.

This methodical approach therefore not only guarantees the objectivity of the selection process, but also saves valuable time during the decision-making cycle. Any political misfortune or long debates are minimised by the application of the scale. It is thus possible to reconcile the prospects of the many people around the negotiating table more effectively!

Taking advantage of absolute transparency

At Airbus, all questions concerning a call for tenders are asked anonymously via an extranet accessible to all candidates. Each participant in the call for tenders therefore sees the same answers.

Some communication sessions may be requested in exceptional cases, but the objective remains to ensure fair treatment and feed all stakeholders with as much information as possible to increase the chances of success.

The deadlines for submitting responses are precise and all tenders must be submitted using the same tool to ensure that the timings are respected by all.

Centralising all information in a transparent manner thus ensures perfect fairness between participants and better handles questions and answers in order to enrich the project on an ongoing basis.

For a long-time reserved for industrial models, hyper-specialisation and outsourcing have now also become the norm in services. Whilst each call for tenders is unique, we hope that this feedback gathered from Airbus will have generated thoughts to enrich your future projects.

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