Aerospace supply chain confidence

James Vjestica Date published: Jul 30, 21

The aerospace supply chain has experienced significant operational challenges in response to the reduced economy of the COVID-19 world.

Ordinarily, the aerospace supply chain is undoubtedly one of the most intricate and multi-layered, in terms of its tiers and number of parts. With this complexity comes a mutual duty of care between customers and suppliers to ensure that products and services are “right first time” and certified as fit for use.

The impact of the pandemic on the aerospace supply chain

The COVID-19 pandemic has caused manufacturing disruption and a slump in demand, which has contributed towards a reduced supply in aircraft parts. As a result, the aerospace sector has seen a scaling down of deliveries.

For example, global deliveries in 2020 totalled 723 aircraft: 42% behind 2019, 55.3% behind 2018, and the second consecutive year that deliveries have declined. Wide-bodies experienced an especially difficult year, with a 54% decline in deliveries compared to the previous year, while single-aisle aircraft deliveries saw a decline of 35% from 2019.

These struggling orders and deliveries coupled with cancellations have seen the backlog of orders for aircraft fall by 6.6% to 13,038 aircraft. This still represents several years of work for the industry and almost £190 billion to the UK if all orders are fulfilled. Over the long term, aircraft suppliers will continue to experience cash-flow shortages and production challenges which will be felt throughout the supply chain.

Technology and transparency

However, supply chains can be boosted and enhanced with the use of technology. Whilst everyone likes to speak about “the future”, “Industry 4.0”, and how robotics and artificial intelligence will make everyone’s jobs easier, the truth is that for the most part, the majority of companies are nowhere near this sort of technological breakthrough. Many are still relying on databases, spreadsheets, pen and paper. This is a quick win for a lot of companies and typically a phased approach into automation.

Transparency is of utmost importance in the aerospace supply chain, and various processes and standards exist in order to boost this two-way dialogue and compliance between customers and suppliers. Standards such as AS9145, A9102, and APQP are providing a robust backbone to ensuring that standards do not slip from tier to tier or supplier to supplier. The process of reporting non-conformances and workflows from customer to supplier is also continuing to gain momentum. These points were emphasised during Ideagen’s recent attendance at the IAQG summit event.

Technology is a part of everyday life for most of us, whether we like it or not – this trend also extends into the workplace. This could be anything from aerospace manufacturers on the shop floor moving towards automated processes to create First Article Inspection Reports (FAIRs) or senior managers reviewing Business Intelligence dashboards to improve aerospace supply chain management. Overall, there are major cost savings to be had at all levels by software automation.

There is an opportunity for aerospace and defence companies to actively review and calculate the COPQ (Cost of Poor Quality) arising from internal processes, material losses, and supply chain unreliability. These external failure costs are sometimes reliant on supplied goods being sub-par or damaged in transit. This is a relative “blind spot” for aerospace companies and profit and re-work is sometimes weighted above efficiency gains and savings.

Plan for an improved aerospace supply chain

Commercially, there is little doubt that the aerospace supply chain has suffered alongside the aviation sector. The current market highlights the importance of adapting your supply chain in response to consistent changes in demand.

For this to be a realistic goal, it is paramount that you have complete visibility of your organisation’s supply chain to make key decisions from the outset. The importance of a QMS is therefore essential in identifying key issues to enable for productive, long-term planning of the aerospace supply chain.

Aerospace industry recovery: step-by-step

Our 3-step guide to aerospace recovery aims to provide clear, concise and timely guidance to boost the confidence of decision makers as the industry bounces back from the pandemic.