In a world of constant distractions and disruptions, it’s easy to overlook the fundamentals. In this Supply Chain Byte, Lisa Anderson explains why success still depends on getting the basics right—safety, quality, service, production, purchasing, planning and the use of ERP and related systems. Before adding complexity, make sure the foundation of your supply chain is strong.
A little over a year ago, Boeing was all over the news due to their quality issues. People were concerned about parts of airplanes falling out of the sky, and so quality issues led directly to safety issues with potentially dire consequences. Thus, the FAA restricted narrowbody output until Boeing resolved its issues. Read more about this situation in our article about the aerospace supply chain and impacts of Boeing. Fast-forward a year later, and Boeing has largely turned around the situation. They are on track to ship the most aircraft this year since 2018. Additionally, many countries have ramped up purchases significantly. At the time, we said that Airbus had a huge opportunity to leverage Boeing’s issues and grow volume.
Quality issues are now negatively impacting Airbus. Airbus recently announced a 15% reduction in their delivery goals with significant issues with the A220 delays. 22% of A220s are grounded with 27% due to recall safety issues. They are mainly struggling due to delays with engines. A key engine supplier, Pratt & Whitney, is using a new power plant that is fuel-efficient, quiet, and with reduced emissions; however, there was a recall which has become a significant bottleneck. We are only as strong as your weakest link in your supply chain, and so it illustrates the importance of focusing on your basics.
Supply chain fundamentals are cornerstone to success. As Boeing and Airbus have proven, quality will directly impact revenue, profitability, and your public relations. Especially as more and more long-term employees are retiring, you must review your basics. Review your safety, quality, production, planning, operations, use of ERP, inventory accuracy, etc. Build on a foundation of strength and then upgrade your supply chain processes such as SIOP (Sales Inventory Operations Planning) and leverage artificial intelligence and advanced technologies.
If you are interested in reading more on this topic:
Maximizing Performance and Margins with SIOP