Improving Supply Chain Visibility in the Aerospace Industry

July 20, 2023
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Flying a jet is complicated enough. But navigating aerospace supply chain management may be just as tricky. Confronting multifaceted challenges, from handling vast supplier networks to battling market volatility and rigorous regulations, is not for the faint-hearted, and the numbers add context as to why. 

Gartner reveals that 47% of aerospace and defense companies encounter supply chain disruptions, costing each an average of $184 million annually. The plot thickens with Aircraft on Ground (AOG) situations costing airlines up to $150,000 hourly, according to IAG Cargo Magazine. Dow Jones data further clouds the picture, noting material lead times often exceed a year. Challenges like unpredictable demand, transport disruptions, and supplier bankruptcy magnify complexity, amplifying Deloitte’s call for resilient supply chains. 

However, a transformative opportunity lies beneath the challenges of aerospace supply chain management: enhanced visibility. Visibility is a vital ingredient in bolstering operational efficiency and fine-tuning decision-making processes. This article will explain why by examining evolving trends, challenges, the technologies behind the scenes, and the significance of choosing a strong provider. 

As the Aerospace Industry Evolves, Customer Expectations Grow

The currents of evolving customer expectations sweep through the aerospace industry. As PwC confirms, aviation demand is “more inelastic” than it was 10-20 years ago. In other words, customers demand unmatched transparency, efficiency, and responsiveness from the aerospace supply chain, and anything less is unacceptable. 

Growing Customer Expectations and Demand for Transparency

Customer demands in the aerospace industry are scaling new heights. As highlighted by Deloitte, customers aren’t merely seeking cost-efficiency or speedy solutions; they also expect unparalleled transparency throughout the supply chain. From the procurement of parts to the completion of aircraft, the call for real-time updates and comprehensive visibility has never been more apparent.

Transparency takes on critical importance during AOG situations. Proactive issue detection and swift response aren’t just appreciable qualities; they’re customer expectations when unforeseen circumstances ground flights. By staying on top of such situations and providing transparency, companies can maintain trust and help improve customer satisfaction, as tricky as it is.

Impact of Limited Visibility on Operational Efficiency and Decision-making

Whether it’s inaccurate data, inability to track supplier performance, late updates, or incomplete information, limited visibility has detrimental effects on operational efficiency and decision-making in aerospace supply chain management.

Moreover, limited visibility in aerospace supply chains can yield grave consequences. For instance, if unexpected disruptions delay vital parts, it throws off aircraft production schedules. Misinformed decisions can further fuel these disturbances. Consequently, airlines might cancel flights or reduce schedules, damaging their profit, customer satisfaction, and reputation. These impacts are starkly quantifiable. In 2022, Airlines for America reported a 25+% annual rise in delay costs, with each block minute costing U.S. passenger airlines an alarming $101.18 per minute.

Risks Associated with Lack of Visibility in the Aerospace Supply Chain

Diminished visibility in aerospace supply chain management presents significant risks. KPMG Global warns of persistent supply chain disruptions due to factors ranging from geopolitical conflicts to climate events destabilizing aerospace supply chains. Concurrently, Deloitte’s 2023 outlook emphasizes supply chain disruptions as major challenges in building and managing resilience in aerospace and defense.

What risks follow from such disruptions and resulting lack of visibility? Firstly, limited visibility can cause delivery delays, denting customer satisfaction and revenue. It also ramps up costs during last-minute supplier searches, undermining competitiveness. Unseen defects due to reduced visibility result in costly product recalls, while regulatory violations pose compliance risks. Furthermore, low supply chain visibility can enable counterfeit or stolen parts to infiltrate, posing a severe safety risk to aircraft and other aerospace products.

Aerospace Professionals Turn to Technology to Enhance Visibility

As customer expectations mount in the aerospace industry, professionals increasingly turn to advanced technologies like real-time tracking, predictive analytics, and IoT. The main objective? Bolster supply chain visibility, improve transparency, and enhance responsiveness.

Collaborative Tools Are Key

Forging clear communication channels is central to successful supply chain management in the aerospace industry. Leveraging technology like real-time tracking and electronic data interchange allows diverse supplier networks to stay aligned and informed, enhance transparency, and nurture innovation.

It’s all about the bottom line, though, and digital collaboration in aerospace certainly can help with that. Accenture suggests that digital technologies could generate annual cost savings of $30 billion by 2030. By investing in open communication and data-sharing, companies can cut costs, enhance efficiency, and elevate customer satisfaction. Additionally, active insight-sharing fosters a cooperative, resilient network that transforms risk management and problem-solving into shared successes.

Actionable Analytics Lead to Actualized Results

Data is the new currency of the aerospace industry. Transformed into actionable insights via standardized sharing protocols, it enables predictive analytics to act as an early warning system. This proactive stance empowers companies to manage logistical delays, a perennial challenge in aerospace supply chains. Moreover, by utilizing this technology, companies can anticipate operational impacts, fine-tune labor schedules, and adapt inventory positioning.

Artificial Intelligence (AI) can also help predict future conditions based on past patterns, enabling aerospace companies to optimize route planning and manage real-time changes, including weather considerations. This enhancement refines contingency planning and drastically accelerates response times to disruptions, a cornerstone of effective crisis management.

Cloud-Based Platforms Ensure Instant Access to Visibility

The aerospace industry is witnessing a transformative shift as cloud-based platforms redefine data handling. When these platforms synergize with the Internet of Things (IoT), they capture real-time data from many sources. This practice equips stakeholders with instant visibility into the heartbeat of their operations, spanning orders, shipments, and inventory. Additionally, such transparency fosters swift responses to potential disruptions, fortifying their decision-making arsenal.

However, the merits of cloud-based platforms go further. Instant access to visibility gives companies the foresight to anticipate and mitigate potential disruptions while significantly enhancing cost efficiency and agility. Furthermore, a cloud-based platform’s secure data storage and sharing mechanisms align with the stringent regulatory standards of the aerospace industry. 

Building Aerospace Supply Chain Visibility with the Right Visibility Provider

Partnering with the proper visibility provider is pivotal in improving aerospace supply chain visibility. Such providers bring innovative solutions and expert insights to tackle the industry’s complex challenges and drive transformative change.

Enhanced Operational Efficiency and Reduced Lead Times

A potent visibility provider, versed in real-time data provision and supply chain insights, can help improve operational efficiency and lead times in the intricate web of aerospace supply chain management.

With an adept partner, companies unlock valuable data – tracking parts and materials, order statuses, shipment progress, and potential snags. It’s like a control tower, using data to streamline operations, solve bottlenecks, prioritize shipments, and make astute decisions.

Yet, the benefits continue beyond operational efficiency. Visibility providers equip aerospace firms with critical insights into supplier performance, serving as an early warning system for delays. These insights can lead to significantly reduced lead times, laying the groundwork for numerous benefits ranging from profitability, improved customer satisfaction, reduced risks, and increased agility.

Improved Decision-Making and Supply Chain Optimization

Visibility provider partnerships can dramatically enhance decision-making in aerospace supply chain management. They harness real-time data, translating it into actionable insights that align with business goals and streamline operations.

For instance, visibility aids in smart inventory adjustments, boosting efficiency and minimizing costs. Real-time updates on materials can also empower production planning and risk management strategies, safeguarding against sudden disruptions. Furthermore, these partnerships spur supply chain optimization, allowing aerospace firms to optimize transportation routes, reduce emissions, and increase productivity via data-driven facility adjustments. 

Increased Customer Satisfaction and Loyalty

Choosing the right partner for aerospace supply chain solutions is a powerful catalyst for boosting customer satisfaction and loyalty. Such partnerships minimize uncertainty and risk, with real-time visibility and transparency aiding in everything from live order updates to timely deliveries.

Improved communication is another benefit. Visibility providers enable quick issue resolution and foster stronger bonds between suppliers and customers. Meanwhile, transparency provides a clear view of supply chain processes, enlightening customers and helping companies pinpoint areas for improvement.

A capable visibility partner can further raise the bar of customer service. By acting as a single point of contact for order tracking, they simplify information access and fast-track resolution, driving customer satisfaction and loyalty.

Mitigation of Risks and Better Crisis Management Capabilities

Aerospace supply chains face risks like natural disasters, geopolitical tensions, economic downturns, and cyberattacks. However, the right partner in aerospace supply chain management can be instrumental in mitigating these risks and enhancing crisis management capabilities.

Partnering with a proficient visibility provider offers businesses the invaluable advantage of real-time supply updates, setting up an early warning system for possible hitches. This foresight paves the way for strategic responses, such as tapping into alternative suppliers or ramping up inventory. Moreover, when a crisis unfolds, the bird’s-eye view these partners offer becomes instrumental in prioritizing orders, effectively warding off delays of critical parts, and cultivating agility and collaboration.

Final Thoughts: Transform Your Aerospace Supply Chain Visibility

The complexity of the aerospace industry demands superior supply chain visibility—a cornerstone for operational efficiency, informed decision-making, and customer satisfaction. In this era of soaring and unforgiving customer expectations, leveraging technology like real-time tracking and actionable analytics is no longer optional but essential. Yet, navigating these complexities need not be a solo endeavor. 

As a leading visibility provider and partner, Carrier 911 seamlessly transforms supply chain management by elevating efficiency, fine-tuning decision-making, and amplifying customer satisfaction. Their comprehensive services, featuring 24/7 visibility, precision forecasting, expert-guided solutions, emergency freight solutions, and meticulous tracking, are built for tackling any aerospace or emergency freight challenges that come around.  

So don’t allow aerospace supply chain issues to stifle your growth. There’s no excuse for it in 2023. Reach out to Carrier 911 today and embark on a path toward a more transparent, efficient, and resilient supply chain. 

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