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Aerospace Firms are Reinventing Supply Chain Management

Aerospace Supply Chain ManagementThe success of an aerospace firm is often predicated on the performance of its suppliers. After all, how can a firm thrive and grow if its suppliers are not consistently meeting their requirements?

The aerospace industry has been on the cutting edge of disrupting traditional supply chain management. The focus is shifting from managing countless piece and part suppliers, to subsystems of fewer vendors with more capabilities.

Trends in Supplier Relationship Management

Many tier 1 and tier 2 firms are optimizing their supply chains with Vendor Managed Inventory (VMI), where the OEM has access to the aerospace firm’s inventory and is responsible for maintaining its levels. This fundamentally shifts the relationship from order giver/taker to a partnership.

Why? Because successful aerospace suppliers are well-positioned to identify process improvements. The VMI supply chain model leverages their expertise and unique perspective. These partnerships become incubators of future growth by revealing ways to streamline delivery, reduce costs, and improve quality.

Supply Chain Management Shift

You may be thinking this couldn’t possible work for your suppliers. While that may be the case for many of them, it could go a long way if you could identify even a few vendors that have the capabilities and capacity to thrive in a VMI partnership. But how do you which ones are up to the task? Rather than basing decisions on experience (and its inherent biases), supply chain managers are using software to objectively show why a specific vendor is up to the task.

A Convenient Supplier Scorecard

It is a herculean task to evaluate the countless component suppliers, consultants, developers, etc. Aerospace firms generally only have a handful of supply chain management teams. Many are choosing to streamline and improve their analysis with software tools that display scorecards of their suppliers’ key performance indicators in real-time. Whether your firm works with suppliers in a VMI model nor not, these headlight metrics mitigate supply chain risk by shining a light on potential issues on the horizon, before they become problems.

CAPSTONE Performance Visibility Suite keeps firms on the leading edge by allowing managers to assess how their suppliers are performing, all in one place. Its user-friendly dashboard displays a variety of ratings and historical performance. Just click on a vendor to view drill-down details such as responsiveness, risk, and contract information. Automatic email notifications can be generated to instantly notify the appropriate parties of pending assessments or approvals.

Looking Forward

Modern tools empower managers to make the right vendor decisions in a matter of minutes rather than days – without spending hours collecting data. With all the complexities of aerospace supply chains, simplification is a welcome change.

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In the next blog, we will cover the essentials of supplier performance management.

Topics: aerospace, supply chain management, reinvent