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Challenges and Solutions in Aerospace Supply Chain Management

Updated: Sep 19, 2023

In the last decade, aerospace supply chain management has seen a shift from a traditional linear model to a more integrated, collaborative approach. This is largely due to the increased complexity of the supply chain and an increased need for efficiency in the industry.

Moreover, as the aerospace industry continues to grow, so does the complexity of its supply chain. Supply chains have become more complicated in recent years due to the increase in globalisation and outsourcing. As such, organisations are challenged with managing these complex supply chains and ensuring that they meet their customers' needs.

Aerospace supply chain management is a complex process that involves many stakeholders across different industries (e.g., aviation, defence, space). This makes it even more difficult for companies to manage their supply chains effectively.

Here are some challenges organisations face when implementing aerospace supply chain management strategies:

1) Supply Chain Complexity

Aerospace supply chains have high complexity compared to other industries because they deal with so many different processes and locations around the world. This makes it hard for managers to understand everything about their company's operations and make informed decisions about how best to manage these processes.

2) Procurement Processes

Procurement processes are a significant challenge in aerospace supply chain management. This is because of the high degree of customisation required and the manufacturing process that is also highly complex. It involves various stages, including design and development, procurement of components and materials, production, testing and certification.

3) Logistics Management Systems

The challenges in logistics management systems are the inability to ensure traceability and accountability for parts and materials used during production, a lack of coordination among various stakeholders involved in the delivery process hence leading to delays and an increase in costs.

4) Lack of transparency

Particularly in data sharing between members of the supply chain may result in delayed decision-making and inefficient use of resources at various stages of the production process, thus increasing costs significantly for both manufacturers and customers alike.

Key Functions of Aerospace Supply Chain Management

Aerospace supply chain management has evolved into a highly-integrated process that involves managing inventory across multiple locations and specialities. The key functions include:

Inventory Management - Inventory management is an essential function in any business because it involves keeping track of how much stock is available and how much money it's costing to keep track of it all. In aerospace, inventory management can be especially challenging because there are so many products involved — from engines and components to aircraft parts and tools — which means there can be a lot of different vendors involved in supplying them.

Supply Chain Management - This involves managing all aspects of the supply chain including raw materials, parts suppliers, outsourced production processes and logistics providers. It also includes managing relationships between suppliers and customers in order to achieve efficient inventory control, minimise costs and improve productivity levels across the supply chain.

Quality Management - This involves ensuring that all processes within aerospace companies comply with industry standards for quality assurance (such as ISO9001:2015 or AS9100D). It also involves ensuring that products meet customer requirements for quality assurance at every stage of production from design through delivery.

Product Development - This involves developing specifications for different aspects of a product such as engineering standards, materials specifications and quality control procedures. These specifications form the basis for all further activities within the supply chain.

Supplier Selection - Once the specifications are finalised, suppliers need to be selected based on their ability to meet these requirements as well as their ability to deliver on time given their current workloads and capacity constraints. This process can be complex since it involves multiple suppliers who may be located in different countries with varying labour costs and different regulatory frameworks which may affect how they operate their businesses.

Aerospace Supply Chain Management Solution

Supply chain management is the process of bringing together people, information and resources to deliver a product or service. It involves the coordination of planning, procurement, production, engineering, quality control and logistics in order to meet customer demand at a competitive price while meeting regulatory requirements such as safety and security.

Here are some of the ways you can enhance your aerospace supply chain management:

Use an ERP system. An Enterprise Resource Planning (ERP) system helps in tracking inventory levels and stock movements and also ensures that there is no wastage or overproduction of goods. Therefore, using an ERP system will help you reduce costs and improve efficiency at every stage of your supply chain management process.

Implement lean manufacturing techniques. Lean manufacturing techniques involve eliminating anything that doesn't add value to your product while ensuring that only those processes that add value remain in place. This process not only helps to improve productivity but also reduces wastage and costs associated with unnecessary activities within your business operations.

Use cloud-based technologies to manage your supply chain. Cloud-based technologies allow you to access real-time data from anywhere and at any time. This means you can gain insights into how your supply chain is performing at any given time. You can also use cloud-based technology to communicate with other companies in the aerospace supply chain and share information as needed.

Use big data analytics to make intelligent decisions about your inventory levels and product mix based on current demand and forecasts for future demand. This will allow you to avoid overstocking or under-stocking inventory, which both lead to excessive costs and waste.

Incorporate automation into your processes wherever possible so that manual tasks are simplified and don’t need as much attention from employees who would otherwise be performing other important functions within their jobs (such as order filling).

Designing and implementing effective communication protocols for all involved parties. Communication is the key to managing a complex supply chain. To address this issue, companies should develop effective communication protocols for all involved parties. This will enable them to share vital information in real-time and eliminate bottlenecks that may arise during the production process.

Synchronising activities between all members of the supply chain. The process of synchronising activities involves developing a clear picture of how products move from one stage to another, from supplier to manufacturer and through to delivery to customers and identifying potential bottlenecks and areas where there could be problems with delays or disruptions.

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