July 11, 2022
Manufacturers, contractors, and suppliers in the aerospace and defense (A&D) industry face numerous challenges that can threaten the ability to remain competitive, productive, and profitable. Enterprises can become vulnerable to global competitors, lose long-term contracts, or become unable to meet customer expectations. Disruptions to the supply chain pose some of the greatest threats.
An uncertain market has led to unstable demand signals. In response, manufacturers focused on shoring up critical suppliers with additional support have often sought new suppliers—particularly domestic ones. New suppliers, however, need greater oversight, and they likely have a limited history of their performance and quality metrics.
The introduction of new suppliers may also increase a company’s risk when it comes to revenue-sharing partnerships for new technology development or building value chains for specific A&D platforms. To help reduce risk, A&D companies should enable each stage of the supply chain to respond more effectively to changes in any other part of the network. Accomplishing this requires greater transparency, better information flow, and stronger collaboration capabilities.
Finding a balance
Successfully striking a balance between efficiency and resiliency to reduce supply chain risk requires greater data visibility within the supply network. By connecting supply chain parties, collecting data, and using sensing signals in real time, companies can detect, coordinate, and resolve issues much more quickly.
This requires a platform for network connectivity and data visibility that integrates with other business systems to automate common business processes. This can help free supply chain experts for more complex tasks, such as scenario analysis and business continuity planning.
A big part of supply chain risk management is building resilience. And that applies not just to the individual companies, but the entire global network of suppliers and service providers that support A&D across the world. Organizations are investing in growing their capability to manufacture equipment and components within their own country. They may also want to increase their capacity to perform maintenance, repair, and overhaul for these critical assets.
Also, on the defense side of the business, the industry must address added concerns for global trade and export compliance. Using contract flow downs can help ensure companies use only approved suppliers. Enterprises with only a few trusted suppliers may face substantial risk. Efficiently managing these suppliers and partners and securely sharing data across this global network is very important to enterprises as they attempt to respond to changings market needs.
Companies must also be careful about dual-use technologies (environments where both commercial and defense work is performed). How to isolate and securely protect data applicable to defense contract is no easy task. Fortunately, modern enterprise resource planning and supply chain management solutions make this possible.
Learn more about supply chain resilience in this Infor ebook.
About the author:
By Edward Talerico is Infor's Sr. Director, Product Management for Aerospace and Defense