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Transforming Aerospace Supply Chain Management

By Bernard Milian
A paper airplane glides through the air with its shadow cast on a blue background, forming the silhouette of a conventional airplane.

An airplane is complex. There are tens of thousands of parts in the bill of materials for an airliner. To supply these parts, there’s a whole network of tier 1 suppliers, tier 2 suppliers, and n suppliers.

The supplier base is made up of large multinationals, as well as a network of SMEs and mid-sized companies with very specific skills – it’s a network of technology companies and engineering firms. It’s a good thing it’s like that – technological competence and quality are key – we saw at Boeing the deleterious effect of a financial drift to the detriment of engineers…

A part is missing and the chain breaks down.

The key is to ensure that everything runs smoothly, and that robust management principles and information systems are deployed to guarantee flawless execution.

For those of us who have access to the reality of this supplier network, the reality is often disconcerting. Whether we’re talking about large corporations or small and medium-sized businesses, we find ERP systems from another age and flow management principles that are poorly defined. Where are the decoupling points? How are queues controlled? What are the bottlenecks? How are they scheduled? How is load/capacity projected in the S&OP?

It’s often a fuzzy area. The reality is that we calculate requirements in the ERP or elsewhere (in Excel). We try to synchronize dates for intermediate steps in the routing. And we have part hunters fighting to meet the aircraft program (OK, we don’t call them part hunters, they’ve become noble flow pilots or other account managers… but they spend most of their time hunting!)

The most commonly used tool for all this, of course, is Excel.

We extract data from the ERP and manipulate it in Excel to decide what to do, we schedule the workshop in Excel, we prepare the S&OP in Excel, and so on.

Think about it the next time you fly: most of this plane was built in Excel! 

On an aero-industrial site, the contrast between the sophistication of the production resources (we’re dealing with cutting-edge technology) and the under-investment in flow management resources is striking.

Demand Driven tactics have proven their effectiveness with a number of players in this industry, but their adoption remains slow – probably due to the fact that aircraft manufacturers have not yet pushed their supplier networks hard enough to structure and equip themselves… Which is tantamount to accepting that their supply chain actually runs on Excel!

And yet war rooms, task forces, and recovery plans initiated by aircraft manufacturers are commonplace. Isn’t much more energy spent on this subject – dealing with crises and emergencies – than on making the supply chain agile and resilient – avoiding those crises and emergencies?

The tactics derived from the Theory of Constraints incorporated into Intuiflow are particularly well suited to securing this industry:

-Management of capacity constraints to increase throughput and meet ramp-up requirements,

-Queue management in complex manufacturing processes, to ensure that real priorities are taken into account,

-Efficient use of decoupling points to stabilize flows and shorten lead times,

-Load/capacity management and forecasting requirements, with a structured S&OP linked to reality in the field,

-Continuous visibility across the entire chain.

We explored this topic in the article Demand Driven for the Aerospace Industry – Demand Driven Technologies

Implementing these tactics and tools on an industrial site today takes 6 months to a year, and is not a considerable investment – at a time when growth and security are key issues, isn’t it time to let go of Excel as the engine of the aero supply chain?…

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