A plane supply chain is complex....

Filed in archive General on December 28, 2008

Aerospace and Defense industry has been in the news particularly because of the Boeing's Dreamliner project delays. The once claimed innovative approach for plane design (collaboration with suppliers) which was supposed to deliver the products faster to the market is now struggling with the complexity of the supplier relationship.

But that's not fully the problem of Boeing's executives: The reality is that this industry has one of the most complex supply chains in the world...

As an example, let's take the example of Joint Strike Fighter (JSF) which is going to be produced by Lockheed Martin.
Some of the interesting facts and figures (taken from Supply Chain Brain) which might put some light on Lockheed's supply chain include the following ones:

- Large portions of the JSF are being outsourced to manufacturing partners around the world, with Lockheed performing final assembly.

- Many of those entities have little or no direct contact with one another, let alone the ability to convey forecasting or demand data on a real-time basis. Yet the JSF production line, when fully up and running, has to turn out planes at the rate of one per day. Current plans call for a total of 2,593 aircraft for the armed forces of the U.S. and United Kingdom.

- A sophisticated aircraft like the JSF requires a wide variety of raw materials, many of which are presently in short supply. Aluminum, titanium and certain composite materials, to name a few, are in high demand and often require long lead times for ordering.

- Geopolitical issues also have an impact on availability. (A large portion of the world's titanium, for example, comes out of Russia. And the current lead time for titanium forgings from approved sources is 26 weeks.)

In such situations, it is not a surprise to get cut in the SCM traps!