What the Analysts Are Saying About…A&D Supply Chains

BillDuBois

What the Supply Chain Analysts Are Saying About A and D

Are you looking for some reading material to pass the time on your next flight? Even if you’re not you should check out Supply Chain Insights, Supply Chain Metrics That Matter. For the past several years, Supply Chain Insights has been delivering this research series.  What caught my eye is that for each report, they do a deep dive on a specific industry and use a mix of financial data, survey research results and interactions with their clients to help get a better understanding of various industries’ supply chains.

I spread my Supply Chain wings at an Aerospace company and since Aerospace and Defense is a key vertical market for Kinaxis, the recent Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report was downloaded on my laptop to read on my next flight. The research benchmarks A&D companies against other industries and looks at the top five A&D companies over the last decade. Although it didn’t give any suggestions on what to do when you find yourself in row 32, you know the one next to the washroom, it did discuss the challenges the industry is facing as well as offering up solid recommendations for areas of improvement.

From a challenges perspective, here are the highlights covered in this report.

The obvious challenge is the complexity in the A&D industry. The report uses the Boeing 747-8 International as an example. It has about 6 million components which are manufactured in 30 countries by 550 unique suppliers. Think about those design, sourcing and delivery challenges. I always thought getting through security these days was complex.

With such a heavy reliance on first, second, third, fourth and fifth tier suppliers and in some cases having only one or two suppliers for specific components, it’s easy to see how delays and budget overages can happen. A supply chain based so heavily on external sources is susceptible to more risk than catching a flight on time out of Newark. As Supply Chain Insights mentions, this is having a significant impact on the company’s bottom line.

Interestingly, to help address the issue of ensuring materials are available when needed; the research indicates that A&D companies have “developed some of the most advanced sourcing techniques and practices.” Companies like Lockheed Martin, are looking at new strategies for materials (raw or otherwise) that are harder to source, especially in the cases where increased Supply Chain volatility have thrown a wrench in their “Just In Time” approach. The challenge is balancing reduced material delays with rising inventory levels and longer Days of Inventory.

To help address these challenges, Supply Chain Insights makes a few recommendations that I think are spot on. Suppliers, in particular of materials that are sole sourced, play such a large and important role in the A&D supply chain, it’s vital that there be a focus on supplier collaboration and communication at every level.  A big part of this is increasing visibility into the supply chains to ensure they can anticipate and plan for potential disruptions. Focusing in these areas will help reduce supply chain risk, and make A&D companies better prepared to deal with inevitable disruptions when they do occur.

Thanks to Metrics That Matter, not only did I get some valuable A&D insights but it took my mind off of sitting in row 32 on a delayed flight out of Newark. The report covers a lot more ground than what I’ve discussed here, so feel free to download a full copy of Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report here. (No registration required.)

BillDuBois

Bill DuBois has enjoyed over 20 years with Kinaxis in a number of roles including his current position as Director of Product and Marketing Content. Prior to his move to Marketing, Bill was a Senior Business Consultant providing pre-sales support to the Kinaxis Sales Team. This included developing and delivering “stand-out” product demonstrations, delivering ROI analysis and conducting pilot projects for prospective customers. Prior to joining Kinaxis, Bill gained 12 years of manufacturing, supply chain and lean experience while with Boeing of Canada. Bill is APICS CPIM certified. And as a qualified APICS instructor, Bill has developed and delivered APICS courses in material planning, master scheduling, capacity management and just-in-time. Bill has also developed and delivered Lean education and training packages for all levels of personnel. Bill studied Electronics Technology at Algonquin College in Ottawa, Ontario, Canada. Bill is also the host of our home-grown Stevie Award Winning Late Late Supply Chain Show. The Late Late Supply Chain Show videos can be found on the Just for Laughs section of the Supply Chain Expert Community. With top-ten list in hand, Bill keys up his late show antics appealing to a broad base of supply chain professionals — those who can laugh at the chaos of their daily lives. Bill has won the plaudits of critics — all one of them – and has proven himself in the ratings — first in Late Late Supply Chain shows! And Bill won’t stop until “this order has been filled.” Check him out for yourself!

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