In Search of Speed, Stability and Security in Aerospace and Defense Supply Chains

Staying competitive is often the No. 1 concern for today’s aerospace and defense (A&D) manufacturers.

Key components to these efforts include successfully triangulating cost, schedule, security, scope and reliability constraints, all in order to improve supplier orchestration and time to market.

But where to start? Many A&D manufacturers agree that the first step in managing these many constraints is getting suppliers involved early in projects.

Studies measuring the impact of early supplier collaboration have shown that an active role in project planning, compliance and quality management leads to reduced product errors and lower sourcing costs (Bandyopadhyay, 2005) (Humbert, 2009).

Making Collaboration Pay

Beyond the immediate project, collaboration can also become a catalyst for process and product innovation.

In the automotive industry, the Toyota Production System teams work to make collaboration more powerful than price. Through well-orchestrated collaboration, the teams have seen reductions in error rates so significant, the time it takes to produce a new model has dropped significantly (Dyer, Nobeoka, 2000).

While security concerns will often drive A&D manufacturers to turn inward to solve product costing, quality, process and cultural challenges, the highest-performing manufacturers are developing secured collaboration links to their suppliers — which leads to greater knowledge transfer and more clarity of project requirements.

Using secure cloud-based applications and supporting platforms to integrate with suppliers, A&D manufacturers are gaining many competitive advantages:

• Better orchestration of complex, multiyear projects that involve a global supply chain. The Boeing 787 program was run using a collaborative project management framework that included an extensive design management and Engineering Change Notice (ECN) system. The graphic below shows the global origins of each major supplier.
• More effective demand and risk management through the use of predictive analytics to anticipate market fluctuations and plan accordingly. The demand variations for large commercial aircraft have been among the most volatile of any large-scale project in this industry, as the following graphic illustrates. Using cloud-based applications and a supporting platform, commercial aerospace manufacturers can more effectively respond to these wide fluctuations. (Source: 2012 Global Aerospace and Defense Industry Outlook: A Tale of Two Industries)
• More effective project management, new product development and project launch performance based on tighter collaboration throughout the supply chain. Using analytics, supply chain management, supplier quality — including Corrective Action/Preventative Action (CA/PA), Non-Conformance/Corrective Action (NC/CA) and supplier audits – is trimming weeks and, in some cases, months off of project schedules. Cloud-based applications for each of these areas give manufacturers real-time access to vital data that can be used to navigate the many constraints they face daily.

Bottom line: Improving time to market, reducing the cost of quality and exceeding continually higher expectations starts when A&D manufacturers look to collaboration enabled on cloud-based platforms to make constraints manageable. Transforming cost, schedule, security, scope and reliability constraints into competitive advantages starts when A&D manufacturers increase their ability to turn data into intelligence. 

References:

Bandyopadhyay, J. K. (2005). A model framework for developing industry specific quality standards for effective quality assurance in global supply chains in the new millennium. International Journal of Management, 22(2), 294-299.

Cressionnie, L. L. (2011). Hand in hand. Quality Progress, 44(7), 62-64.

Dyer, J. H., & Nobeoka, K. (2000). Creating and managing a high-performance knowledge-sharing network: The Toyota case. Strategic Management Journal, 21(3), 345-367.

Humbert, E. R. (2009). The impact upon key performance measures in applying lean enterprise initiatives by defense contractors. (Order No. 3381836, University of Phoenix). ProQuest Dissertations and Theses, 148-n/a.

Kim, S. (2008). Performance-based logistics: Incentive contracting in the aftermarket. (Order No. 3328601, University of Pennsylvania). ProQuest Dissertations and Theses, 205-n/a.

Kim, S., Cohen, M. A., & Netessine, S. (2007). Performance contracting in after-sales service supply chains. Management Science, 53(12), 1843-1858.

Lee-Mortimer, A. (1993). A dynamic collaboration. The TQM Magazine, 5(1), 31.

Penny-Anne Cullen, & Hickman, R. (2001). Contracting and economic alliances in the aerospace sector: Do formal contact arrangements support or impede efficient supply chain relationships? Technovation, 21(8), 525-533.

Usman, A., & Kidd, C. (2013). Critical success factors for configuration management implementation. Industrial Management + Data Systems, 113(2), 250-264.