The aerospace and defense supply chain has undoubtedly transformed itself more than any other industry over the past few years.
- Where prime contractors used to manufacture 80% of deliverables, today 80% is outsourced.
- The industry has moved aggressively into foreign markets.
- The number of direct suppliers has decreased radically; reliance on a smaller group of strategic suppliers significantly increases risk.
- Costs and responsibilities have shifted to subsystem integrators and other suppliers; and offset requirements are increasing – not shrinking – global and regional supply bases.
- Customers have shifted cost-plus contracts toward fixed-price contracts, which carry higher risk, as the contractor absorbs cost overruns.
- Customers are also demanding more innovation, more flexibility, a faster time to market, managed risk, lower costs, and higher quality.
These trends are pushing aerospace and defense companies to drive new relationships and values across the supply chain while keeping staff at consistent levels. Since 1998 staff levels have only grown 2%, while supplier staff levels have grown 26.2%.
These new supplier partnerships dictate tighter oversight on supply chain risk. Where primes purchased materials directly, price and inventory fluctuation may now be two or three tiers down the supply chain. Potential interruptions can now be buried deep within the supply chain. By moving into emerging economies to drive down costs, geopolitical risks have increased substantially.
Ineffective oversight of supply chain risks has caused cost overruns, production delays, quality failures, and program cancellations. Working in isolation, both the primes and suppliers are blind to many emerging supply chain problems.
Further, since aerospace and defense deals directly with many agencies (all branches of the military, NASA, Homeland Security, EADS, FAA), the industry and its supply chain is highly regulated. Tight systems and processes have been required to deal with the ever-increasing regulations, oversights, and audits.
HICX understands the pressures faced by the aerospace and defense industry. Our products are designed to handle not just the typical supply-base management needs, but also the increasingly complex demands of global, complex, and regulated supply chains.
Whether providing deeper visibility into second- and lower-tier suppliers, collecting quantitative and qualitative performance metrics throughout the supply chain, or managing Certificates of Conformance (CofC) at the point of delivery, HICX strives to meet the current and future supplier management needs of any given industry – and welcomes the opportunity to explain how.