Six million components make up a Boeing 747, give or take. Basic drones can have 100 parts; more specialized models can have thousands. Fully electric commercial air travel, such as air taxis, saw 347 entities conceptualizing and designing more than 700 electric vertical takeoff and landing (eVTOL) aircraft.
The aerospace industry’s continual, rapid change is mind-boggling – and something that aerospace supply chain managers are constantly working to stay ahead of.
But where the aerospace industry moves at the speed of innovation, its supply sometimes struggles to keep up. Forward-thinking manufacturers are realizing the importance of gaining a competitive advantage to support their bottom line. And they are digging into areas of improvement to support supply chain management in aerospace industry situations.
3 Factors Grounding Aerospace Supply Chains
According to research, the average American commercial aerospace company has 12,000+ tier 2 suppliers alone. A disruption – even a small one – can trigger a domino effect of unexpected costs, time delays, and scrambling for a backup plan.
With billions of dollars at play, manufacturers who deliver consistently and can shift quickly often realize the benefits of long-term contracts. Conversely, in a marketplace as hyper-competitive as the aerospace industry, when manufacturers can’t deliver on time, their customers suffer.
These are just some of the pressures aerospace manufacturers must deal with.
1. World Events
Everything from travel bans to political instability has affected the availability of critical components and raw materials. Rising with little to no notice are wars, travel bans, and global shutdowns affecting the ability to ship materials.
For example, Russia’s invasion of Ukraine cut off access to Russian titanium for Aerospace and Defense OEMs. Previously, Russian supplied about 50% of OEM’s needs. Events like this can appear with little warning and create unpredictable endpoints.
The aerospace industry is influenced by the Department of Defense (DOD), the Federal Aviation Administration (FAA), the National Aeronautics and Space Administration (NASA), and the Environmental Protection Agency (EPA).
While aerospace manufacturing facilities and products have long been regulated in terms of emissions standards, climate change and the need to reduce direct emissions is top of mind for industry regulators. Companies need to ensure that suppliers support their ability to satisfy regulations.
3. Shortages & Backlogs
From a shortage of skilled workers to a backlog of narrow-body aircraft orders, the aerospace supply chain remains unbalanced.
To keep costs down, aerospace tended to operate on a just-in-time model. But pandemic shortages across the globe threw supply chains into chaos. Now, as production ramps up again, thousands of planes are on backlog and parts manufacturers are working to keep up.
Unfortunately, hiring skilled labor remains slow. For example, Boeing is looking to fill 10,000 production jobs in 2023.
The New Normal: A Disruption Every 3-4 Years
Disruptions affect all areas of a supply chain: logistics, procurement, purchasing, and transportation. And a new disruption is always just around the corner. One study suggests a supply chain disruption lasting a month or longer is expected to occur every 3.7 years.
Even with this in mind, many aerospace manufacturing executives are heading into 2023 with renewed optimism. They’re looking at what is in their control rather than what’s outside of it. They’re working to make operations agile, flexible, and resilient. Their efforts include:
- Improving supply chain visibility wherever possible
- Automating manual processes and reducing duplicative efforts
- Focusing on maintaining key partner and customer relationships
Companies are also thinking about auditing their supply chain management hurdles with an eye to improvement. In a recent survey, CloudLogix asked our aerospace customers to rank their biggest supply chain challenges. The top five answers:
- Controlling inventory (61.5%)
- Increasing freight spend (46.2%)
- Too many tracking portals (42.3%)
- Outdated tracking methods (42.1%)
- No product delivery insight (34.6%)
The answer to helping address these issues is available for aerospace companies: CloudLogix.
CloudLogix: Supply Chain, Clear & Simple
Our supply chain software platform serves as a central hub connecting and streamlining your aerospace supply chain:
- Enhanced communication tools bridge gaps, eliminating mistakes.
- End-to-end shipment visibility between stakeholders drives transparency.
- Real-time data is always at your fingertips.
- Instantly access centralized and easy-to-generate reports.
Plus, CloudLogix integrates with existing ERP tools and systems to seamlessly manage data across your supply chain. CloudLogix brings value to every team working together across your aerospace supply chain. With CloudLogix supporting your company, your teams can realize tremendous value throughout the entire supply chain.
- See the status of non-delivered shipments at-a-glance
- Clearly measure freight spend and carrier performance to help negotiate terms
- Have full visibility to inbound shipping
- Anticipate supply chain shortages and disruptions
- Save money by comparing carrier rates through one system
- Monitor supplier performance and compliance
Supply Chain Management
- Centralize your data to keep everyone in the know
- Go to one – not multiple – systems to get the total picture
- Have end-to-end visibility over your entire supply chain
- Ensure personnel and suppliers are making the best decisions for the company
- Streamline and simplify enforcing compliance against company guidelines and policies
- Better manage cash flow related to supplier invoicing
- Increase accounting team efficiency for freight invoice processing
- Track freight status from one screen
- Spend less time and energy checking the accuracy of freight invoices
- Drive carrier satisfaction with fast payments
Supply Chain Management in Aerospace Industry: See CloudLogix in Action Today
Ready to be proactive rather than reactive? With responsive support, tiered pricing to meet a variety of budgets, and numerous integrations across ERP tools and systems, your path to simplified supply chain management in aerospace industry situations is within reach.