Supply chain pain points in the Aerospace and Defense industry

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7 barriers to aerospace and defense supply chain success As air travel demand soars, aircraft equipment manufacturers continue to innovate in areas like jet engine fuel efficiency, navigation technology and materials science. These improvements, especially around fuel efficiency, are driving demand for newer aircraft models, and speeding up the replacement of previous generations as a result. For supply chains in the aerospace and defense industry, keeping pace with original equipment manufacturers (OEMs) who are dramatically increasing production rates for components, systems and services, is a major challenge. As the flying public continues to demand lower airfares, a ripple effect is running through the entire supply chain, from OEMs to tier one suppliers and lower, as everyone struggles with the ongoing challenge of competitive pricing. The global defense industry is also facing new challenges, including how to grow profitably in the face of a potential market decline and how to cut costs to maintain acceptable financial performance. These organizations are cutting costs to maintain their margins in this declining revenue environment. Successful defense companies have anticipated defense budget cuts, already reducing staff, cutting overhead costs and getting leaner. They’re accelerating process automation instead of hiring more staff, resulting in higher operating earnings per employee. Digital product development and computer-aided design have changed the game further by creating significant efficiencies in the product development process. Lean manufacturing and six sigma initiatives have significantly cut waste and inefficiency in the production process. It’s expected these initiatives and programs will take off further as companies continue to work on managing margins and profitability. Aerospace and defense supply chain pain points Multiple ERPs Various point-based solutions, multiple enterprise resource planning systems (ERPs) and legacy systems located around the globe mean disparate, disconnected data. That results in poor end-to-end supply chain visibility, latency in critical […]