Aerospace supply chain disruptions come in many shapes and sizes. Not only do companies need to deal with suppliers and customers across geographies but a high level of globalisation has increasing levels of associated risks.
From natural disasters like hurricanes or earthquakes to political upheaval or pandemics. With the supply chain spanning numerous countries and political jurisdictions, there is simply a huge number of things that could go wrong.
Supply chains are also incredibly complex ecosystems with various different tiers of suppliers. For example, original equipment manufacturers (OEMs) such as ourselves; maintenance, repair and overhaul (MRO) providers; and end customers, which can include airliners and armed forces.
Because of the potential for interruptive forces to influence the supply chain forward-thinking companies are looking toward adoption of digital technologies, vertical integration and localization for an edge.
Effective supply chain strategies not only help companies improve efficiency, control costs and mitigate risks, but also enable them to deliver value to the customers. In this article, we outline 6 aspects for developing and maintaining an adaptable supply chain strong enough to withstand many of the crises that the world might throw at it.
1. Adoption of innovative digital technologies
We have talked a fair bit about how the adoption of new technologies is changing the aerospace industry. Connected devices, simulations, 3D printing technology and even drones in warehouses all have their parts for optimising the entirety of the supply chain.
Digitally driven new operational models such as joint innovation centres and flexible production sites are further driving the evolution of the aerospace ecosystem.
2. Vertical integration
To gain more control over the supply chain leading aerospace and defence players adopt vertical integration. It allows them to both reduce operation costs by cutting out supplier margin and provides them with the agility to scale quickly in response to demand which can shift dramatically dependant on a number of external factors.
3. Risk-sharing partnerships
Leading companies engage in collaborative agreements through which development and production are executed by a risk-and-revenue-sharing arrangement between the OEMs and its suppliers. Such arrangements are not limited to production and manufacturing stages, but also include aftermarket activities.
4. Network security
Given that all parts of the A&D supply chain are vulnerable to cyber attacks, large A&D players should not only focus on building a robust cybersecurity framework for their own systems and networks but also ensure that their key suppliers are protected.
OSINT tools, for example, can be used to gain real-time data about emerging supply chain disruptions which allow companies to quickly establish preventative measures. On top of this, they enable companies to detect data breaches early through dark and deep web monitoring.
5. Building an alternative supplier network
By signing contracts with multiple suppliers companies can mitigate the risks that come with trusting a single supplier. It allows companies to quickly source materials or parts even if the preferred supplier is unable to fulfil the request. Multiple sourcing then significantly minimizes the risk of supply disruptions.
6. Operations planning
With a global supply chain companies need to be able to make decisions fast. Which means they need up to date, real-time data as well as predictive data with multiple layers of granularity that incorporates supply and demand.
In the case of crises somewhere along their supply chain, a company that has advanced operational planning will be able to pivot and adapt fast which will prove imperative when mitigating potential damages that might occur due to supply chain disruptions.
By spreading the risk across multiple suppliers they reduce dependency on a single supplier which allows companies to adapt quickly. Vertical integration gives them more control over the supply chain and can help cut costs, whilst adopting innovative technologies they can optimise the supply chain whilst simultaneously minimising threats.
The marrying of protective and preventative measures alongside extraneous planning, if managed well, creates a comprehensive system that is strong against many potential aerospace supply chain disruptions. That being said no system is perfect which is why companies must remain vigilant.
Here at JPAero we’ve been supplying aerospace fasteners to the aviation industry since 1958, and are members of the ADS SC21 Programme. To find out more about us or speak to a member of our expert team, get in touch today.
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